Friday, December 2, 2011

EOD Analysis for 2nd December 2011 and Outlook for 5th December 2011

Fantastic day on the bourses and Nifty went well beyond my expected level of 4994-5011; The strength shown by BNF, Reliance, Infy, Automotive counters was great and have to hand it over to the bulls for staging this fantastic pullback from the lows of 4640. Volumes were encouraging with OI in Nifty futures at 26+ million with the rise. The close above 5032 is also an encouraging sign.

Critical condition for bulls still remains the same i.e. 2 consecutive closes above 5092-5125 levels with higher volumes nevertheless. Is the pain in the market over? My take is absolutely not and the markets are still not out of the woods and am still betting on some sharp correction to the downside from 5th December to 16th December. However, have to acknowledge that there liquidity in the system and this will find its way into index futures and options far higher than the equity side and unless the masses don't turn bearish, shorts will be chopped off [mine got chopped off too today and it is courtesy of hedges that I escaped with minimal losses but negative day in my trading diary nevertheless!]

Friday factor did not really have any impact today; taking a cursory look at the fall, Nifty fell from 5396 to 4640 = 756 points [50% retracement @ 5018 - achieved already; 61.8% retracement @ 5107 which in all likelihood seems the next assault point by bulls; this comes in the viscinity I mentioned 5092-5125 and 2 close here can put bears in ICU! Weakness confirmation for Nifty will only be after a close below 4880 and 8850 on Banknifty.

Euro-Dollar is above 1.34 that will keep banks steady for sometime;
For FTSE and DAX, 5750 and 6400 seem achievable targets from where we can see falls and weakness can only be confirmed with a close below 5550 on FTSE and 5800 on DAX.

Dow also has shown some strength and seems set to retest the recent highs of 12200-400 once before turning around. I think there is enough evidence all over the place that a deeper correction is due on all bourses but when bulls are on steroids, no point in coming in their way.

3 comments:

IndianMarket said...

VIX not mentioned today???

I am looking for adding into FB group, no response from Sunny

reachnagraj / theknight16 said...

My apologies - VIX cooled to 24 today due to the strength of the rally.

I am sure Suny bhai has been busy with his trades and of course job and will respond soon. Good Luck

MBA ROADIE said...

Will rupee continue to depreciate with Euro debt crisis? Is there a cause-effect relationship? I think RBI should act soon to offset it?