Friday, November 4, 2011

EOD Analysis for 4th November and Outlook for 8th November

Well not a bad session at all with Nifty opening positively on global cues and some profit booking followed. Falls are still being bought into, premium on Nifty futures still very healthy and even Banknifty taking  interim support at 9500-9750 zone. SBI had critical resistance at 1950 levels and seems like it has managed to take it out; as usual, 1 close can be a false alarm but 2 consecutive closes above 1950 on SBI has potential to yield another 100 points in the same direction. 2 consecutive closes above 2050 can yield another 100 points but in these choppy markets will it be able to achieve it? Need to wait and watch.

Critical levels and conditions remain unchanged; looking at the way falls are being bought into, a retest of 5348-5378-5408 seems to be on the cards but these are very strong resistance points and 200 DMA is around the 5408 levels - need to see how things pan out. As mentioned yesterday as well, a close over 5408 with volume and momentum [need to see OI at 35 mill+ on Nifty futures against the current 30-31 million] and broader market participation. Banknifty will only get weak with a close below 9500 and as of now, upside seems capped at 10k levels IMHO. 2 consecutive closes above 10k levels will open BNF for a retest of 10250 levels. Euro-Dollar is staging a counter-trend rally after a deep fall 2 days ago; there is strong correlation between the Euro-Dollar rate and Banknifty as of now [courtesy to UMji of MMB who opened this perspective for me]. Euro-Dollar has a pending target of 1.36 and lower in this series itself and once it stages a close below 1.36, one can see Banknifty cracking apart but we take each step at a time. For now, prices are above 1.382 and first weakness signal will be a close below 1.3725 and like-wise, unless GBP-USD does not print below 1.58 and then 1.56 BNF may manage to hold on to current levels [also look for the strength in SBI given above]

On the downside, bears can only rejoice with similar cheer like Aug/Sep series when 5032 is decisively broken on closing basis and that will not happen before next Friday IMHO; a close below 5177-5196 zone will open Nifty for a retest of 5032-5092 levels; other critical levels remain unchanged and depending on where Nifty spot is, consider it as support/resistance.

Monday, markets will be closed and we may be in for a surprise on either side depending on how things pan out on Dow, DAX and FTSE. Critical levels for Global Market Perspective and Special Coverage for Indian bourses will be updated over the weekend as usual. Hope you have managed to rake in some profits and cut losses with our contributions.

We have had a funny week - not as profitable as usual and the original positions we took got stopped out many a time whilst the hedges actually helped us escape from losses and end in NPNL or marginal profit net of brokerage. We have never claimed to be maestros of analysis and the quality of our analysis is openly visible [we are not at all happy with the level of accuracy at this point of time] As usual, if we rejoice via words for the profits, it is only fair for us to acknowledge weeks when things have not been hunky dory for us.

This is our team's way of walking the talk of ethics; rather than employ cheap and under the belt tactics, mud-slinging in public, name calling etc - everything is open for scrutiny for the ones who would like to monitor our track record with a fine-toothed comb - just look at the date for outlook, check actual price action and the trading strategy given - I rest our team's case with this. Enjoy your weekend and I hope to catch up with some of you over the weekend over Skype or Gmail etc.

PS: I have been receiving add requests over my yahoo/gmail/skype addresses sans proper introduction and contact details; I simply ignore such requests - please keep this in mind while sending requests.

1 comment:

Raghuvanshi said...

Dear Naagi,
Mentioning 5032 before breaking down of 5169 gives out (overtly) bearish persona.
Keep it covert. Shall talk about it after breaking down 5169---