Tuesday, September 20, 2011

EOD Analysis for 20th September 2011 and Outlook for 21st September 2011

Nifty opened on a mild note but immediately started showing strength within minutes of opening. The OI in Nifty futures were pretty much on the same lines as yesterday but most of the belted stocks yesterday saw a lot of short covering. Banknifty provided the much needed pullback towards 9800 levels but now it is showing some signs of topping out. The way volumes came in the last moment and significant moves in IT, Banks and some of the interest rate sensitives, Nifty may try for 5177-5196 tomorrow but the upside seems to be capped at 5225 as of now. The volumes need to increase by at least 10% and we need to see OI of at least 33 to 34 million in Nifty futures to see further upside. A close in the 5177-5225 region tomorrow may open Nifty to fill up the gap upto 5348 but then a cross-over of 5225-5250 should then bring in another couple of million OI to take this further. If this indeed comes through, then Banknifty may complete the full technical pull-back to 10,000-10,100 levels before they all head south.

Now weakness can only be confirmed with a close below 5092 on Nifty and close below 9600 on Banknifty [for the first set of shorts] Some of the top tier stocks have now risen more than 12% on EOD basis but one should not go blindly ahead with shorts in such counters. The markets are still not out of the woods. This entire pull-back is a part of a technical pullback and the threat of retesting 4800 is very real and very much on the cards. Raghuji will provide the updated counts for the same and Harshalji will provide the Support/Resistance levels on both Nifty and some stock specific examples. As usual, use your own discretion prior to taking uni-directional positions.

Hope you are enjoying profits and cutting losses with the help of our seniors' contributions.

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