Monday, December 12, 2011

EOD Analysis for 12th December 2011 and Outlook for 13th December 2011

A positive start to the day and then bit by bit, Nifty gave up all the gains and corrected heavily. OI in Nifty futures dropped sharply today and was clocking about 23.5 million - 24 million. This kind of volume will not be able to sustain upside momentum; 4911-4944-4994 continue to be resistance areas and short-covering can take it to these levels provided the volumes increase and least match those that we saw on Thursday/Friday [25-26 million OI in Nifty futures]

For the downside, lack of volumes can delay but not prevent the fall. VIX is pretty high and at one stage almost hit 30 [Inference: panic buttons are on] Euro-Dollar has given up the 1.33 level 2 consecutive closes below 1.3275 and it will race to 1.1850 [not overnight but this is technical signal enough to see where it is headed!] This implies Dollar Index will race towards the 80-81 mark and bring more pain across the bourses.

INFY continues to show some resilience and weakness to be confirmed here only after a close below 2650; IMHO, this counter is due for some profit booking now - so far in 2011, this counter has started its downside after hitting 200 DMA consistently [with the exception of first quarter when the 52 Week High was made] Sarmaji has given a Short Call on INFY today on the basis of his astrological studies and left it to me for the levels. 2750-2780 is the ideal shorting band IMHO or below 2700 for T1 = 2675, T2 = 2650.
Oil and Gas continues to be negative for this week i.e. counters like RIL, ONGC are 'Sell on Rise' counters. Futures recommended as the options are quite illiquid in case of ONGC.

FTSE has given the technical signal with 2 consecutive closes below 5550 of which Friday's close was a weekly close below 5550. Some relief rallies may come via short-covering / Santa Rallies but this counter is headed to 4900 levels now and once 4900 is breached on closing basis, floodgates will open for a journey further south.

Based on the close on Friday, a retest of 4750 was on the cards and we saw a day low of 4755 odd levels today. So at least now, some short-covering should come through; BNF has cracked a lot on the back of Euro-Dollar and also gave up the crucial 8600 levels [and almost 8500 towards the end!] at one point of time today. A technical pullback at least to 8800 levels should be on the cards before markets decide where to go.

Amongst auto majors, M&M has almost hit a crucial support level of 680-685 levels so some corrective bounce may be due here; a close below 680 may invite a retest of 650 odd levels whilst 2 consecutive closes above 690 will open M&M for 725-750 levels. Tata Motors has given up the 180 levels but 165-170 zone may provide some interim support. ONGC hit 255 and we should be able to see some short-covering on this counter from 250-255 levels before it decides where to go next.

A close below 4728 will almost certainly invite a retest of the recent lows of 4640 levels; I must say, even I have been stumped by the extent of falls today; considering the level of shorts that came into the system last week, I was expecting some upside to come through before the retest of 4750 odd levels but that has come through today itself. Call Writers are making hay and Puts are still winning so far. At least for December series, expecting a bottom to be formed by the end of this week and a Santa Rally from 20th December or so from whatever levels we are at.


IndianMarket said...

Nagraj ji,
what happened to FB group, I sent request to sunny and you too, but not accepted yet. atleast msg me the group name to send request (in skype) .

reachnagraj / theknight16 said...

A couple of typo errors with today's low on Nifty and outlook for upside on M&M; the same have been revised now.