Wednesday, September 14, 2011

EOD Analysis for 14th September 2011 and Outlook for 15th September 2011

Nifty opened on a muted note in the morning with OI in Nifty futures around 29 mill. However, as we approached the opening of Europe, Banknifty saw a good recovery with support from other top notch counters and the OI to the upside increased to 31 million bringing Nifty above 5k levels twice. At one point of time, Banknifty almost breached 9500 but there was a swift profit booking round of about 100 points in this counter but the pullback from 9390 levels implied some strength and finally saw a close at 9501 [adjusted close at 9472].

Unless Nifty closes above 5092, the bullish stance does not have too much to cheer. On the other hand, the 4900-4920 zone is holding out well for now and further weakness can be confirmed only after we close below 4880. Today's close is indicating that markets have quite a bit of steam left and Nifty may try for 5050-5092 levels once tomorrow.

As far as global cues are concerned, BoE came out with some doctored numbers on unemployment claims. France and Germany are talking behind the scenes and whilst the 2nd bailout of previous bailout may go through, 'orderly' fashion only implies that Greece is set to be the next Lehman of the Sovereign domain. What does 'orderly' imply? Simply put, sell-off Greek Banks and assets with as much market capitalization as possible. Will that happen in these troubled times - an emphatic no. The markets may go on steroids for a temporary phase but the banking sector in general is in for tough times. Due to internal problems of India, it would not be surprising to see some doctored numbers come out and Banknifty may make one valiant attempt to close over 9500-9550 and this will open the possibility of retesting 9750 levels once. However, this is just a temporary phenomenon and markets will fall eventually as the global cues are indeed weak.

For Nifty, a close above 5092 will open the possibility of retesting 5150-5177-5196 but safe to assume for now that upside is capped at 5225 levels. Taking hedged positions is very critical. The last 90 minutes today was a classic case of short-trapping. For tomorrow, one should wait for some clear signals before initiating shorts. The classical TA approach is showing an inverse H/S pattern with head at 4720; this lends credence to a possible bounce up before going down yet again. Please follow the updated counts on Raghuji's blog for clearer support and resistance levels. Markets still favoring 'Sell on Rise' and VIX is high even with so much short-covering.

1 comment:

nalin said...

Nagi following Greece bond yeilds....its just inhuman,pathatic....yeild on1 yr satnds @ 111% while dat on 2 yrs its around 74%....i just dont undrstand...watz left in d default now? Doesnt it mean its greece bonds are dead?