Friday, December 16, 2011

EOD Analysis for 16th December 2011 and Outlook for 19th December 2011

Volumes still a concern when it comes to the rise for Nifty but swiftly comes in with the falls; case in point, OI in Nifty futures hovering around 24 million despite such a positive session in the first half and over 27 million for the falls in the afternoon session. BNF retested sub 8200 levels as expected [expectation was 8280 for this week but went below that as well by a good margin, thus opening the potential of retesting the 7800-8000 zone]

VIX shooting above 29 and a new low also made on Nifty. 1 close below 4720 ticked i.e. scope for option1 is still open. Excessive fear on the bourses and yet again we saw 2 significant movements today; options data on Wednesday had shown huge addition in OI for 4700 PE and 4800 CE; my interpretation for this failed! rather than being range-bound, both levels were pierced in 2 sessions and options premiums were royally crushed on both sides.

Lots of short-covering pending, potential Santa rally pending but with the close below 4720 and head winds, caution is advised. 4994 is a realistic target on the upside even now but longs should be initiated with appropriate hedges only. [The weekly close is almost short of 200 points of last week's close and marginally above the lowest low clocked in 2011]

Will be back in action from Monday again; enjoy the weekend. As far as global markets are concerned, the outlook posted earlier this week prevails and no changes to that.

1 comment:

sometimesbullsometimesbear said...

Nagraj thx for your reply to my OI comment on the earlier post. That explains and I guess that is the correct way to take OI into account.
Gosh after so many years in the market, I am still learning. Its mindboggling.