Monday, September 19, 2011

EOD Analysis for 19th September 2011 and Outlook for 20th September 2011

Nifty opened on a muted note today and there was a significant drop in OI of Nifty futures for a major part of the day. Banknifty gave up the critical level of 9700 and actually breached 9600 [but at the close of the ticker, it quoted 9580 which is a good sign]. The uncertainties revolving around Europe are actually keeping a question mark for our indices. There seems to  be no major direction coming through but in stock specific actions, one could see a pretty good belting on counters like Tata Steel, Infosys, Banks etc. Despite such a range bound session, VIX actually spooked up slightly and went to 30 levels today before closing at 29.6

Dow's close today also may determine a certain degree of trends today and so will reactions on SMI, FTSE and DAX. All have a counter-trend bounce pending and if that come through, Nifty may finish off the pending target of 5150 or so before heading back. Critical levels remain unchanged

For Upside: 5092-5125-5150-5177-5196-5225 [A close above 5225 can propel Nifty to fill up the DOWN gap all the way to 5348 - probability is about 1% {my guesstimate}]

For Downside: 5032-4980-4940-4911 [Last hope where we should be able to see bounce backs at least for this week]

Weakness will be confirmed with Banknifty closing below 9500 and Nifty closing below 4880 and this will open Nifty for a retest of 4800-4720 levels but such low targets may not come through this week IMHO. Taking hedged positions is very critical and one should now avoid going for September options as the burn rate of premiums is very high. It is prudent to buy OTM Put/Call options [not exceeding 30% of trading margins] of October series and adhering to strict stop losses and trailing the winning legs]


animoitra2011 said...

Some web sites reported that tomorrow may be Greek default day.If it happens then what will be the implications on nifty ?Regds.

reachnagraj / theknight16 said...

If FIIs decide to hit the sell button on panic, we may end up retesting 4940 levels first and the fall will be led by banks.

However, we should take it one at a time and keep hedges on all positions intact.