Friday, August 26, 2011

EOD Analysis for 26th August 2011 and Outlook for 29th August 2011

Nifty opened on a flat note with modest volumes as expected after such a painful expiry. Whilst the first session of the day was modest, the fall accelerated after European bourses opened and the carnage went all the way down to sub 4740 levels at one point of time. Today happened to be the 13th session after we breached the crucial level of 5092 on EOD basis. It also happened to be the 34th trading session after seeing the July 8th high of 5740. We have closed below the last major support line that was there i.e. 4783; Nifty is vulnerable to a panic bottom of 4675, the levels seen in Feb '10 but the volatility is expected to drop sharply and we may trade in a narrow range of 250-300 points for the next 5 to 8 trading sessions.

Nifty has melted 1000 points from July 8th till date and we are still fishing for the bottom; a retracement is due and we should be see some upside during September series.

The panic that seemed to be missing came in today and an accelerated fall came through below 4783; Complete chaos in the market and a deliberate attempt to create absolute fear. The adage is at work i.e. Buy Fear Sell Greed; current market conditions are not for the faint hearted [which I have been hinting for the last few sessions]. From Monday, one can expect the markets to get calmer on both sides and rationalize the time and price balance.

My leading barometer for Nifty i.e. Banknifty has seen sub-9k levels now. It is only a matter of time that it retraces some of the deep cuts it has taken. Capital preservation is the key and one should take positions accordingly. We work hard to earn our capital for trade and should not lose when trading. Profits are the goals but markets can continue to remain irrational until we get insolvent, once said a wise man.

Enjoy the weekend and don't worry too much. Yes unless 5092 taken out on EOD basis, markets will continue to remain weak. One can be assured that Nifty won't melt so easily, so soon but a fall is imminent.

1 comment:

Bishoyi b said...

Thanks nagraj for Your precious comment. Can i enter into stocks like l&t and bajaj Auto for september series.