Saturday, October 1, 2011

Global Markets Update - Special Coverage For Indian Bourses - 1st October 2011

Nifty expiry went exactly as predicted on Wednesday and the subsequent action came in as predicted after expiry. Markets are not out of the woods still. For Monday, we should be able to see a retest of 4880-4911 levels within the first hour of open [or a slight gap-down following the weak closes of Europe and Dow on Friday] In all likelihood, we should be able to see these falls being bought into. Banknifty will continue to follow the Eurozone drama for some more time. 9000-9250 levels still carry a lot of weightage as support levels though I would not encourage retail traders to participate in the rise of Banknifty / Nifty. Sell on Rise is a better strategy

The critical levels are as follows

For Upside: 4800-4840-4880-4911-4944-4980-5032-5032-5092

For Downside: 4880-4840-4800-4780-4720-4690

For upside, it will only get fuelled with a close above 5032 and then above 5092. 1 close above 5092 will open Nifty for a retest of 5125-5150 levels and 2 consecutive levels above 5092 [1 close above 5150] will give another 144 points in the same direction. IMHO, the upside is capped at 5225 levels and a close above 5225 will ensure a retest of 5348 but this seems highly improbable at this point of time.

Weakness will be confirmed with a close below 4880; 1 close below 4880 will open Nifty for retest of 4800-4840 levels and if the falls are not arrested here, the floodgates will open Nifty for a retest of 4690-4720 levels. A close below 4840 will give 144 points in the same direction in all likelihood.

At least in the initial part of the series, one can expect falls to be bought into by hot money. 10th October is a critical date for current series and I am expecting serious falls after 10th October [regardless of where Nifty is on upside]. Then some upsides may be expected as we move towards the mahurat trading session but don't worry - Nifty is set to fall drastically in the time zone of 16th to 22nd November [pivot date is 18th November 2011]

I had called for a potential new high this year on Nifty but the time/price actions were straightforward
5408 to be maintained until 12th August, 5532 conquered by mid-September and 5944 to be conquered by 17th October 2011 - none of these were fulfilled. Now also, I am still saying we are going down drastically but that does not mean rushing for shorts via futures or puts.

Cash continues to remain king and there are blue chips waiting to be picked up at rock bottom prices. So as far as investments are concerned, just keep those extra bonus handy ready to be deployed when prices come below. From a trading perspective, the team is ensuring that resistance, support levels and EW counts are updated for Nifty. Following those with hedges and adherence to Stop Losses will preserve trading margins and scalp some definitive gains. We don't follow the 20-20 format in our trade outlook.

Hope you enjoyed the profits on the upside as well as downside - we certainly did. Have a good weekend and good festivities that are lined up.

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