Tuesday, December 20, 2011

EOD Analysis for 20th December 2011 and Outlook for 21st December 2011

OI in Nifty futures dropped marginally today and was hovering around 24 million in the morning half and increased with the falls [a straight line fall in a jiffy] VIX still very high at 30-31 levels indicating excessive panic and higher put premiums

BNF 7800 is being poked at and a close below 7800 can invite a test of 7650 to the downside; lots of shorts still in the system that can take this counter to 8200 levels after a close above 8000 levels, aided by short-covering. To the extent 8280 was reserved, I was looking for a short-covering rally to 8800 but now will revisit this aspect only after a close above 8280. [Possible but it is not prudent to look that far given where we are on BNF right now and the sails need to be adjusted when the head winds are strong!]

For Nifty, 4509 on a weekly closing basis is the lowest level allowed this week [intra-day lows may go to 4450 also but Friday's close should be above 4509] Please refer attached longer term weekly chart for perspective. Click Here To See The Longer Term Weekly Chart. [just roll the mouse to the left side at Click here......and the link will appear]

Lots of short-covering pending but that can only take Nifty to 4800 levels [revised downwards from my earlier indication of 4994 and will revisit this point only after a close above 4800 levels] Year-end rally expected on all bourses but whether it starts from here or lower levels, we need to wait and watch. For the ultra-short term, my vote is buy the dips in a staggered fashion and with hedges of course. Unless BNF moves up and broader markets perform, upsides won't sustain and the volumes need to come in [right now volumes are not coming in for the rise but coming in for the falls which is a bad omen]

1 comment:

reachnagraj / theknight16 said...

Just one comment to add on the second point made in the picture;

Please read the statemaent as 'trading range may shift to....' instead of 'trading range will shift to.....'

Nobody can predict with certainty about markets and my apologies for the wrong word usage in that statement.