Friday, September 9, 2011

EOD Analysis for 9th September 2011 and Outlook for 12th September 2011

Nifty was on a precarious note as we did have 2 consecutive closes above 5092 and the possibility of testing 5177-5225 was on the cards. However, I had also indicated that Friday factor may bring about profit booking. the adjusted close stands at 5059. Banknifty took some very steep cuts today and RIL did not support as well. The close below 5092 levels has ascertained that we are going to have a minimum retest of 4940 levels and ideally, we are going to retest the 4800 levels in the next 8 to 13 trading sessions [95% probability]

Should we jump on to shorts straight away - no not yet. 5168 - 5044 level drop was significant and we may see a relief retracement of this which still keeps probability of testing 5100-5110 levels open. If we get a close above  5092 on Monday / Tuesday, Nifty may just make 1 valiant attempt to take out 5177-5196 levels before heading down. Shorts should be opened close to 5100-5110 levels on Monday with a hedge of a Long position in the next series option. 20 point stop loss applies to the losing leg and trail the winning leg

On the downside, a second close below 5092 will confirm the downtrend with second confirmation coming with a close below 5035-5040 levels. This close will usher a minimum downside of 4940 and a high probable trade setup for retest of 4800 levels. Don't just short blindly but rather short in a staggered manner. As of now, safe to assume that upside is capped at 5225 levels and some short covering may come in at 4940 levels

With or without RBI stimulus, banks are all set to be belted by FIIs. Keep an eye on Banknifty. Upside is capped at 10100 levels for now and for RIL, upside is capped at 890 levels. At these levels shorts are very safe. A close below 9500 on Banknifty and a close below 825 on RIL will provide a very high confirmation signal for retesting 4800 levels. Hope all of you enjoyed the profits on the upside as well as the downside.

Global Markets Update will be uploaded tomorrow. Enjoy your weekend and thanks once again for visiting this blog and providing valuable feedback from time to time.

No comments: