The Master Date Alerter

For the benefit of followers, I am trying to upload a Square of Nine Calendar with the key pivot dates and potential price actions. Over the medium and long term, important turning points can be witnessed on the dates marked in yellow and pink. I hope this helps users take positions accordingly

[Proof of its validity can be seen in price actions from Oct 10 till date]
Master Time Calendar 2011

Banknifty Outlook

For Banknifty, I would expect a retest of 10660 levels next week but shorts should be opened in tranches as close to 11250-11400 zone as possible; with short via futures, one need not worry about the stop loss but I would caution against shorting all at once. If one has margin for shorting 2 lots (and some buffer margin for MTM), one should only open 1 short around 11250 and see if Banknifty goes up; the 2nd short should be opened closer to 11400 (if it indeed goes up) or below 11050 with a trailing Stop Loss at 10950

Unless there is something drastically wrong, Banknifty should finish the last leg of correction at 10400-10600 zone and start marching higher until Diwali. The RBI rate hike expectation was 100 bps for 2011 and all of it is now discounted. Credit growth is increasing and the monsoons are expected to usher some cheer for inflation figures at WPI levels if not at CPI levels. Most top notch banks are now going at almost 1 times Price to Book and the last pending rally on Nifty for 2011 will be led by Banks, LnT and RIL in the same order

Banknifty has a pending target of 13500 for 2011....

Nifty Outlook For 4th July to 8th July 2011

Nifty opened with a significant gap-up towards 5690 levels and then came down; the volumes were relatively low and hence after an initial sell-off, the session was pretty flat

2 interesting points observed in today's trade

1 - The 5690 level posed a significant resistance for Nifty to go above it and close; this means that there will have to be volumes, momentum to make a positive crossover after which the next critical resistance comes at 5740 levels
Only 2 consecutive closes above 5740 can further bolster the bull story and even 2 flat sessions with EOD above 5740 will give a further 144-216 points increase on the upside from 5740

2 - While we now have 6 consecutive closes above 5408, we also have had 2 consecutive closes above 5608 which is also a very important point

Today's open was clearly designed to trap shorts that were rolled over yesterday by retail traders and HNIs
As I mentioned yesterday as well, 5408 seems to be the bottom right now until 23rd July 2011; however, greater the number of closes above 5408-5532-5608, the higher the probability of Nifty marching higher in the next 144 days; [Nifty has a pending target of 6800 for 2011] and this will come within 162 days from the day we closed at 5196**

**If Nifty does not close below 5408 until 10th August 2011, then we can conclude that the retest of 5177 was completed in June series with the brief visit to 5196. [if the retest of 5177 indeed comes in, then Nifty will hit 6800 162 days from retest of 5177]

A visit to 5532 is certainly due next week and one can safely short Nifty at any value above 5608 and hold the position until 8th July. I would be very surprised to see if 5408 is not tested again. Enjoy a profitable week ahead and use Sell on Rise strategy for next week as there is a bumpy ride down waiting for Nifty

Nifty Outlook For July Series

Nifty June series made a lot of precedents in 2011

It was the first instance of Nifty futures starting the series at a discount

Then when the 5348-5408 zone was considered safe, it made way all the way down to 5196 before starting its ascent all the way to 5655 on expiry day.

Way forward for July series

The crucial period is 4th July to 8th July where a rapid downward test can be expected. The other key dates are 15th July and 23rd July

Since we had 5 consecutive closes above 5408 in the last week of June, it is safe to assume that 5408 is the bottom for the next 3 weeks.

As of now, I would peg the upside for Nifty to be capped at 5690 on EOD basis for July series. The only scenario that would continue the bullish momentum is 2 consecutive closes above 5740 levels; this will imply a retest of 5890-5944 levels but the probability of this happening is 1%

Projected Path for July Series

Upto 4th July - move towards 5690 levels

5th July to 8th July - rapid fire correction with a visit to 5408-5440 levels

11th July to 15th July - retracement back towards 5550 levels

18th July to 23rd July - Flat sessions in the 5408 - 5532 zone

25th July onwards - expecting Nifty to kick off a rally and move back towards the 5690 levels