Wednesday, September 21, 2011

EOD Analysis for 21st September 2011 and Outlook for 22nd September 2011

Nifty opened on a muted note yet again after a good performance yesterday. Banknifty continued to extend its gains by another 100 points and breach the 9900 levels in the morning. The OI in Nifty futures actually dropped further compared to yesterday and was reflecting 28 million or so both in the morning and mid-session. it seems like nobody wants to short so soon [as reflected in the premium on Nifty futures] but nobody wanted to take fresh long positions as well. VIX has been calmer at 26-27 levels this week so far.

Banknifty is just about 75-100 points away from completing the technical pullback and if the volume and momentum goes in favor of Banks tomorrow, then we may see Banknifty go all the way to 10100 also before heading south. For Nifty, the critical levels continue to be 5150-5177-5196-5225 [Max upside IMHO]

If the OI keeps dropping like it did today, then the upside cannot sustain for long. Banknifty and RIL played a major role in the pull-back from 4720; they will play a major role in the fall as well and I still maintain that the threat of retesting 4800 in September is very real. On the other hand a close in the 5177-5225 zone [matched with volume] can deliver another 144 points on the upside for Nifty.

Critical levels remain unchanged and keeping hedges on positions is very critical. Don't rush for shorts unless Banknifty decisively closes below 9750 and then 9600 [modified for 1st tranche and 2nd tranche from the last 2 days' recommendation.] Keep looking for Raghuji's blog for the wave counts and Harshalji's blog for some stock specific trade ideas.

On my shorting radar are Tata Motors and TCS - looking for TCS Oct 1100 PE at a price in the 15-18 region with Stop Loss at 12 and T1 = 25 and T2 = 35 [I never modify my order beyond 1 rupee just to get an Order Fill and earn money for my broker. If it comes through well and good otherwise it is not worth the trade. Hope this helps some of you to take your positions on other instruments also accordingly.]


animoitra2011 said...

Nagraj ji you said that max time for range bound movement is 22 sept.Has the down move started today ?Regds.

reachnagraj / theknight16 said...

Well we just finished 21st Today. My outlook as follows
Tomorrow morning session we should be able to complete the pending target towards 5170 levels and close below 5150 levels. That will signal that the down move has started.

However if we get a close above 5150 with volume and momentum, Nifty will try for 5348. In either case though, tomorrow should be the last dull day

Hence I have been insisting that all hedges must remain intact till the clear trend emerges.