Thursday, December 29, 2011

EOD Analysis for 29th December 2011 and Outlook for 30th December 2011

Finally on expiry day, the volumes cropped up; the morning session opened with OI in Nifty futures hovering around the 26 million mark but then every 30 minutes, slowly increased by about half a million taking OI in Nifty futures to almost 33 million in the last hour. Surprsingly, VIX spooked to 27.3 odd levels initially but despite the sell-off in the last hour, it cooled below 27 levels! [I love my India....]

The close below 4690 has confirmed a technical sell for a target of about 4550 at least [looking for 4450 personally]; again would like to repeat that it may not follow immediately but the stage is set. 4640 provided the interim support so a short-covering rally can take Nifty upto 4840 odd levels even now; but every rise can be taken as an opportunity to short. It is near certain that we will revisit the 4550 [or perhaps even 4450] prior to Jan expiry.

Most heavy weightage dates for Jan series are 6th, 9th - 12th Jan '12 where a lot of volatility can be expected in price action. Total weakness to be confirmed after a weekly close below 4509 that will open much lower levels. On a fundamental level, this cannot be ruled out as valuations for major Nifty stocks on PE basis are still higher especially in FMCG and IT segment; with the results season around the corner, one can expect downward revision in prices and further rationalization of PE multiples.

For tomorrow, 4550-4580-4640 will be expected supports; 4690-4720-4750 will be expected resistances for Nifty.

To the extent 11800 on weekly basis and 12k on daily basis intact.on Dow, one can expect a surprising upside to 12400 odd levels. 2 consecutive closes below 11500 and it is adios to higher levels for a long time.

The sharp correction in Gold is indicating margin calls on hedge funds IMHO; caution advised for those long in Gold and Silver....accumulation band for gold on Comex levels will be USD 1300 to USD 1450 per ounce. Silver only to be accumulated in lower 20s.....per ounce [hope readers will remember that the bearish setup for Gold and Silver was highlighted when Gold was over USD 1750 per ounce and Silver above USD 34 per ounce]


animoitra2011 said...

Dear Nagraj da thanks for the high weightage dates.But can u specify their respective positive or negative bias ?Regds.

Suraj said...

Dear Nagraj Sir,

Thankyou so much for your timely advice to sell gold and silver a couple of months ago. I sold them at good price at that time and is saved from huge loss. Thanks once again.
Keep posting