Wednesday, September 28, 2011

EOD Analysis for 28th September 2011 and Outlook for 29th September 2011

A false alarm at open at 5k levels [couldn't last even for 2 minutes] and Nifty futures with OI at over 35 million. The divergence for downside was clearly indicated in the first few minutes of trade when Banknifty went to the negative territory but Nifty was hovering around the surface. Dow futures were trading below the lows of yesterday and hence it was very evident that a fall is imminent. The high OI in Nifty futures indicated 2 major points - desperate roll-over of shorts from current series and/or chopping off of positions of low margin players. Roll-overs were evident from the fact that the Oct series futures started trading at a discount [and only yesterday it was commanding a 25 point premium overall]

All news and drama regarding Europe and US are simply noises and nothing more. All are destined to fall and are currently going through relief rallies. The pending target of 5600 on SMI [given in Global Market Update over the weekend] has been achieved. Nifty has a pending fall courtesy expiry and a retest of 4800 levels is imminent. Upside for now is capped at 5032 on EOD basis IMHO. By the end of this week, we should be at the same Nifty levels where we started this series on 26th Aug.

Banknifty managed to retain 9500 levels and hence some pull-back may come through. We are supposed to have a royally badgered expiry yet again but the fall may just get postponed by a day or two courtesy options premium sucking game. We are still in Sell on Rise market and the sell levels are

5032-4980-4944-4911-4880 [also the critical resistances] These are levels where one can open shorts (via October Futures) and hedge with a long position in  Nov futures with a 25 point stop loss on both ends. VIX has remained calmer as expected for the last couple of days. A sharp fall will trigger the VIX to higher levels whilst moderately flat sessions on either side will calm this down [seems a remote possibility for the short term]

Low margin players should avoid the temptation to make a quick buck on expiry as the game of bigger players can make Nifty gyrate either ways. Even for a short term upside momentum, I hold the view that Buying should only be initiated around the 4690-4720 zone and it is better to wait for confirmation of weakness and go short from higher resistance levels.

Stay tuned to our blogs and enjoy the low quantity high quality trade setups shared from time to time.


Govind said...

Nagaraj ji,
You are doing a wonderful job. Keep up the good work..

Thanks and Regards

prasan said...

very beautifully said in words. a very commanding message. i will pray for this to come true,