Tuesday, November 15, 2011

EOD Analysis for 15th November 2011 and Outlook for 16th November 2011

A modest start to the day's play and the OI in Nifty futures was just a shade over 30 mill; With Euro-Dollar going below 1.36, the ominous signs for BNF were all over the place. All it needed was a trigger from Europe where the markets are taking steep cuts. Towards the end, the OI in Nifty futures surged another 2 million with the fall. After holding firm for 21 trading sessions in a row, 5092 gave way today but 5032 has survived. At this juncture, the downside may not be restricted to only 4980 but as mentioned earlier, there is no perpetual rise or fall. Lots of shorts are pending to be covered and the Euro-Dollar rate will have significant impact on BNF especially. The greater the pips shed by Euro-Dollar, greater will be the impact on all bourses incl Dow, SnP, Nasdaq as well.

Now the pending target for Euro-Dollar is 1.3475 with some consolidation and eventual target is 1.32 in a few more weeks. FTSE is expected to hit 5300 and DAX is expected to hit 5600 which as of now seems very likely by the end of this week but we keep our fingers crossed as there is interim support for FTSE at 5480 and 5550 levels; likewise, there is interim support at 5800-5860-5900 for DAX

For Dow, a clean sweep below 11800 is initially required to confirm  a synchronous bear market across the globe and total weakness to be confirmed with a close below 11500 [corresponding targets on SnP will be 1230 and 1190 respectively]

For Nifty, critical levels remain unchanged; 5032-4980-4944 are all critical supports where one may expect some short-covering. There is 1 big gap between 4750-4880 but that can only be filled after a close below 4880. Such steep cuts on broader markets but VIX is still a shade below 27; accelerated downfalls can only be witnessed on Nifty when VIX shoots past 28-29-30 levels and OI in Nifty futures goes in excess of 34-35 million. On the upside, OI of 30-32 million in Nifty futures on the rise can only signal short-covering IMHO

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