Thursday, November 24, 2011

EOD Analysis for 24th November 2011 and Outlook for 25th November 2011

So expiry day did give us a movement in a 100 point range and closed in the positive despite some bad global cues. Lots of short-covering and OI in Nifty futures were also pretty high at 40 million. Now one should not be surprised to see a few days of low volumes as it usually happens after expiry. Is the correction phase over - well can't say anything right now; last time, Nifty hit 4720-4728-4751 [i.e. fell 3 times here before resuming the journey upwards and breaking out all resistances] Yesterday and today put together, we had 2 visits to the 4640-4660 zone and we have seen bouncebacks from there. There is a potential to retest this and if this 4640-4660 zone gives way with volume and momentum one more time, there can be a further fall to 4450-4550 zone where the correction should ideally end and a new cycle should start.

Critical levels remain unchanged; Unless bulls manage 2 consecutive closes above 5092-5125 levels, safe to assume that markets are weak and vulnerable. As we keep saying there is no perpetual rise or fall and the 4911-4944-4994 levels that were key support levels earlier will provide stiff resistance. Friday factor might come into play tomorrow. Stock-specific investments can commence in SIP format now.

Stay away from the banking segment for some more time. In the infrastructure space, IRB looks good; in the technology segment, SmartLink is now looking attractive and in the consumer side, I guess one can pick up some units of Moser Baer, Navneet Publications with a 2-3 year horizon. Whilst some correction has been seen in punter counters like Polaris, Jubilant Food etc, my personal recommendation is to wait a little more. Amongst Mutual Funds, I would still prefer to stick to HDFC Top 200 fund with about 10% investment corpus maximum spread out over the next 3 to 4 months. Likewise, though it is near certain that Nifty has high chance of testing more lows, with a 2-3 year horizon, one can start accumulating Nifty Bees in the demat account.

As the saying goes, buy low, sell high as far as investments are concerned and in a staggered systematic way. As our captain wave rider says, no point trying to pick a top and bottom; as far as investments in demat account are concerned, one should hold them for a minimum one year period and escape the capital gains tax as well.

Dow, FTSE, DAX all hit our targets this week and we hope to get better with the analysis on both Nifty and Global Markets. Hope you enjoyed the current series with good profits.

1 comment:

Suraj said...

Dear Nagraj Sir,

Excellent and reliable analysis. I am enjoying reading your daily EOD analysis. Please never discontinue it.