Thursday, October 20, 2011

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

Before the post-mortem and outlook 2 points from me

One of my well-wishers keeps reminding me from time to time - Nagi you need to add MA also to your learning arsenal along with FA, TA and SA for Nifty maiya
FA = Fundamental Analysis, TA = Technical Analysis, SA = Sentiment Analysis and MA NOT Equal To Moving Averages but Manipulative Analysis! Whilst I find it a bit difficult to digest on an index basis but these days I do keep that in mind [remember the options data noise I mentioned yesterday?]

Now, for those who find it confusing about EW with regards to the index itself and with regards to stocks; allow me to quote from the EW textbook Chapter 6, Page 169-170

As a mass psychological phenomenon, the market averages unfold in EW patterns regardless of the price movements of individual stocks, the count for many issues is often too fuzzy to be of great practical value. In other words, EW can tell you if the track is fast but not which horse is going to win. With regard to individual stocks, other types of analysis are probably more rewarding......[text continues]

Close-end stocks of investment companies and stocks of large cyclical corporations, for obvious reasons, tend to conform to the patterns of the averages more closely than most of other stocks

Now, any surprise why Raghuji keeps saying trendlines, momentum and then waves? It is relatively easy to work out a count for counters like Nifty, SBI, Infosys but next to impossible for counters like Jubilant Food, KS Oils. Cals Refineries, Shri Ashtavinayak [all operator driven multi-beggar (not multi-bagger) stocks that di-worsify (not diversify) investor risks] Tomorrow somebody might turn up and say let us do EW for the Call Options and Put Options of this month series! The analysis will lead to paralysis and one can safely conclude EW = Idiot Waves - as my lovely captain wwji puts it, applied with the right context, they are brain waves and as the proponents themselves keep saying - use in conjunction with other indicators for best results

oodi baaba - it is still not time for weekend puraan version! back to plain vanilla stuff

The OI in Nifty futures stayed around the 25 million mark today in the morning and mid-session but rose to 28 million again with both the fall and the rise; VIX spiked up a bit and crossed over 25; Banknifty did spike up a bit beyond the 9750-9800 levels but there was never any indication of supply; that continues to be the profit booking zone now unless it stages 2 consecutive closes above 9750. Weakness to be confirmed only with a close below 9500 that opens BNF for retest of 9000-9250 levels. At the same time, weakness in Nifty to be confirmed only with close below 4880 that opens Nifty for a retest of 4750 levels.

5032-5092 levels survived yet again so the upside gains possibility is very much on the cards but difficult to see beyond 5169-5177-5196 levels for now. Infosys retained the 2700 levels and one can see the bounce it took in the last 1 hour. It still has some steam for another 25-50 points IMHO before the next leg down

Stay hedged, adhere to SLs and enjoy the net positive results - that is all for now.


animoitra2011 said...

Nagraj ji today is the trend change day for mkts according to time price charts but what trend its going to take this time? Confused.Personally feel it will go dn after testing 5200 and thus will severely trap the bears.Do u really think that it will be prudent to short @5150 -70 this time?Regds

reachnagraj / theknight16 said...

Dear aniji: Pls refer my comments on Monday and Tuesday reg dates


Raghuvanshi said...

Very nice & apt quotes Naagi.
And stock-examples are still better.
Maza aaya---

vineeta said...

as usual nagraj you are bang on