Wednesday, November 23, 2011

EOD Analysis for 23rd November 2011 and Outlook for 24th November 2011

Weak global cues and selling en masse right from opening bell; Nifty futures clocking an OI of 43 million plus that was enough an indication that the fall will be deep today especially after 4720-4693 were taken out in a jiffy. Has the market bottomed out yet - difficult to say but some short-covering was definitely expected from the lows of the day. Banknifty now has 3 critical headwinds going against it;

1] Euro-Dollar / GBP-Dollar [which in turn has an impact on Dollar Index and Rollar]; Dollar Index is yet to peak [80-81 is the potential target], Euro-Dollar is yet to bottom out [1.32-1.3-1.28 next potential targets]

2] NPAs surging in balance sheets of banks / Exposure to PIIGS debt to some extent by leading banks

3] Credit Growth contraction and lower NIMs as we chug along

So unless the above 3 factors don't play out completely and reverse, Banknifty will keep drifting lower which in turn will have an impact on Nifty. Even on Nifty, the premium shrinkage even on Dec Nifty was too much - until yesterday, it was commanding 20+ points premium and at one stage it dropped to 10 points and similar price action for Jan Nifty as well

FMCG, Pharma, Infy, Tata Motors gave some respite in such steep falls [no gains but some stability nevertheless] Tomorrow is expiry day and we don't know what form of manipulation will play out for the FnO settlement. We still maintain that 4450-4550 is the zone where Nifty should be able to find a bottom and then start the next leg up.

Short-covering to some extent is being witnessed in DAX and FTSE as well and one should not be surprised to see the same on Dow tonight. To the extent price remains below 11625 [11625 is very much achievable on Dow via short-covering itself], the next leg down should land around the 11250-11300 area and then we know what to expect on Nifty.


animoitra2011 said...

Thanks Nagraj ji.Now what are the nearby dates having highest weightage in time price charts for the upmove in time price charts ?Can you say.Thanks again and Regds.

reachnagraj / theknight16 said...

Dear aniji - I have covered this point last month also when you raised this. Again repeating - the next high weitage date in terms of time is 21st December 2011 around which time I expect markets to start going up from whatever levels they are at!

Good Luck

animoitra2011 said...

Thanks and apology Nagraj ji.Yes you certainly did.
Sent friend request to Sunny ji.Lets see what happens.Wishing u good luck.Regds.