Outlook For December 2012

Well time indeed is flying and we are on the verge of ending another calendar year!!!

First a review of Nifty and BankNifty charts on a Daily / Weekly basis

Nifty Levels


On the upside, IMHO the steam can only go upto 5944 levels for now. As I have maintained throughout the year, the 'Secular Bull Market' that a lot of analysts are talking about can only come after Rollar breaches the 48.25 levels. However, if Nifty closes above 5944, then bulls have it in them to spring a lot more surprises on bears [In the beginning of November itself, the outlook was that if 5740 is breached on upside, 5880-5944 would be the logical destination]

At a minimum, the next leg down will hit 4531 if not lower; one can expect a repeat of the Nov'10 to Dec'11 pattern repeating in the coming year 2013 i.e. a nice 8 to 13 month corrective pattern. Please note that the correction is expected in 2013 and this correction can be far more severe and faster than the 2011 correction!

Banks are sitting in piles of Non-Performing Assets and these negatives have still not been priced in. Kingfisher Airlines and Suzlon are just tips of the iceberg that have come up over the last 2 months. For the record as per an Economic Times survey, the Corporate Debt Restructuring activity and deferred payments in 2012 period have crossed the cumulative restructuring from 2001 to 2011 period!!!

Whilst banks are advertising a lot for retail loans, corporate loans are in bad shape; business credit extension activity is alarmingly decreasing and interest burdens are going higher. The amount of activity in the dot-com phase are also a signal of troubling times to come. Exactly 12 years ago, the same mania for dot-coms were prevalant all over the globe and like-wise in India. Myntra, Jabong, Olx, Community Matrimony etc etc are not at all encouraging signs but a warning of troubles to come. When the interent bubble burst and had its effects on India, India also witnessed a lot of airlines going under water!

2000 + 13 [Fibonacci Number] = 2013; Internet Bubble Burst in 2000
2008 + 5 [Fibonacci Number] = 2013; Housing Bubble Burst in 2008
2010 + 3 [Fibonacci Number] = 2013; Corrective Phase for Nifty that preceded a euphoric rally

2013: Time will tell what the excuse is going to be!

Europe's troubles are far from over; things are only worsening and at some point of time next year, Germany and Finland will in all likelihood pull out the plug and opt out of the Euro. Whilst there is a fiscal cliff discussion happening on US markets, one should not be surprised to see a huge surge in defaults on education loans in that market.

That is the bigger picture in my personal view and back to Nifty for Dec '12
5408 still remains a strong support and as long as that holds, bulls are safe.

Critical Dates
6th December 2012
20th December 2012 - Very very important time period begins around this date

Outlook for November 2012

Wishing all of you and family greetings for the festive season. Hope most of you managed to take advantage of the upswings in October and also book some profits in delivery based holdings.

Let us first review the charts of Nifty and BankNifty on daily basis as of EOD 25th October 2012

The upside seems capped at the moment and the only condition that can change this view is a close above 5944 on Nifty

Downside support levels have been mentioned in the Nifty EOD chart.

Enjoy the festivities and upsides till it lasts

Critical Dates for November '12 [+/- 1 Trading session for all dates below]

5th Nov '12
13th Nov '12
21st Nov '12

Outlook For October 2012

Hope all of you enjoyed the swing from 22nd September [+/-1 day] as had been told.

Now Nifty has struggled twice in the 5720 region [a few points away from the logical target as had been forecasted earlier] Interestingly the volumes have spiked up well in the September rally which go well beyond the short-covering rally. Fundamentally, the Rollar has corrected in favor of markets.

So how far can this upside go? As usual, I will just put the EOD numbers for the same

1 close above 5740 with current volumes is enough to take Nifty to 5850-5880 levels
1 close above 5944 can change the game drastically in favor of bulls [higher the prices, faster the acceleration as well]

The first outcome is highly probable but the second outcome may not happen IMHO in 2012

On downside, for the shorter term, 2 consecutive closes below 5690 will probably help prices to plug the gaps created in Sep '12 and allow for one more bounce to the upside from the 5408-5532 range to the 5580-5655 range.

The so-called secular bull market will gain steam when the Rollar posts 2 consecutive closes below 48.25 IMHO

October is likely to be volatile with the critical dates being 11th Oct '12 and 22nd Oct '12 [+/- 1 day]
Have a profitable week and the following chart should help in figuring out the roadmap for the next series.

Outlook For September 2012

As mentioned in the last post, I'm currently very much tied up in my professional engagements. Nevertheless, here is a recap of Nifty and BankNifty EOD charts

Nifty charts clearly indicating that 5408 is going to be a key hurdle. We already have had 2 consecutive closes above 5408 in the last 3 weeks that keeps the hopes of an upside alive. Should we get 2 consecutive closes above 5408 in Sep '12 series, then the Diwali rally should take us to 5740 odd levels where a top should form. This has been the outlook from the summer quarter and there is no change to that view.

Recap of Support / Resistance Levels on Nifty [EOD levels]
5032-5092-5169-5225-5280-5325-5348-5378-5408-5440-5480-5532-5608-5655-5690-5740

2 consecutive closes above 5408 invites a test of 5532 levels; we have this condition already satisfied but then profit-booking came in. Nifty has bounced back from 5225 on closing basis and this time if we get 2 consecutive closes above 5408, Nifty is near certain to achieve the Diwali '12 target of 5740. Difficult to go above 5740 despite all printing presses being active across the globe for monetary easing.

A close above 5740 will give bulls the chance to retest 5810-5944 zone. 1 close above 5944 is enough for bulls to make new highs but will it happen in 2012???? Very very remote

5169 on the downside remains a crucial make or break level for bulls and bears. A close below 5169 will invite a retest of 5032 [from where a strong bounce back came in Aug '12] and the same should be expected in the next leg of fall as well. If 5032 holds fort, then well and good, failing which 4800 retest is near certain.

Neither rises nor falls are linear [let us not forget that the fall from 6338 to 4531 took a good 13 months]

Critical Dates for Sep '12

22nd Sep '12 marks Fall Equinox and there should be some good swings around this date

As per charts of BankNifty, barring 2 throw-unders, it is pretty much within the wedge pattern that should give us a break-out or break-down around 17th Oct '12.

We have a lot of festivities with the nearest one being Ganesh Chathurthi. Let us hope that the festive cheer keeps us distracted from all the disturbing news vis a vis India scandals.

My next post will be in the last week of Sep '12 and for those obsessed with trading, the Support / Resistance levels given above should suffice. For day trades and jackpot trades, my seniors are taking care of the same. Good Luck to all of you.

EOD Analysis For 31st July 2012 and Outlook For 1st August 2012

OI in Nifty futures little changed from previous session and remarkable drop in VIX

Today was the second consecutive close above 5169 and that implies that this rally can go upto 5348 levels
[with some pauses in between and profit booking; the rise from 5032 to 5200 was very fast and a 61.8% retracement of the same is pegged at 5135-5140 levels and Nifty bounced back smartly from the lows of today]

5250-5280-5325 are strong resistances and Nifty has an intermediate triple top as of now in the 5342-5348 zone. So one could trail longs and see how things pan out after that. The key reversal level continues to be 5169 on closing basis IMHO to switch directions as mentioned in the previous post [and most seniors in the Nifty blogosphere would tend to agree]

Looking at VIX, historical data of Aug '11, one should still be wary and very very alert in this series
[we had mentioned in the beginning of July series that the first half would be biased on the positive side and second half on the negative side. Barring the last 2 days of July, things turned on expected lines]

In Aug '11, we saw almost 5700 levels in the first week and then ended the series at 4728 on 26th Aug '11
VIX was remarkably cool in the first week of Aug '11 only to spike well above 27 by the end of the month

The upside should be enjoyed till it lasts; 1st condition for upside has been satisfied; 2nd condition for rally to pick steam is 2 consecutive closes above 5408 and that needs at least 10% to 15% volumes more

I am personally bearish for the last week of Aug '12 and 1st week of Sep '12; whenever PCR / VIX are at extremes, one should be wary but that does not justify blind shorting and lapping up of Puts. This rally is fuelled by 'hopes' of liquidity injections and can delay but not avert an eventual fall

Critical dates for Aug series are
7th Aug
22nd Aug
[give or take 2 days on either side]

Phew quite a long post but I am very busy for the next couple of months with my professional engagements and hence my posts will be sporadic. My seniors are helping readers with frequent posts and that should be sufficient

Good luck with your trades and enjoy the monsoon season

EOD Analysis For 26th July 2012 and Outlook For 27th July 2012

OI in Nifty futures pretty high today due to expiry and as expected, with 2 closes below 5169, Nifty went into retesting 5032-5092 band. Bulls must ensure that 5032 is retained on closing basis or else Nifty is near certain to take a steep cut of another 144 odd points. Also tomorrow being the weekly close, this level has more significance

Short covering can take Nifty upto 5169 but strength only after it closes above it for 2 consecutive sessions

Illustrative Charts for reference

EOD Analysis For 25th July 2012 and Outlook For 26th July 2012

OI in Nifty futures hovering around the 33 million level and VIX not reflecting price action appropriately

Critical levels and outlook remain unchanged for both Nifty and BankNifty

5032-5092 is a critical support band and going below that on closing basis means more pain for bulls
Short-covering can take Nifty to the congestion band of 5169-5177-5196 and strength to be confirmed only above 5225

EOD Analysis For 24th July 2012 and Outlook For 25th July 2012

OI in Nifty futures hovering around 32 million today and VIX is too low

Critical levels and outlook remain unchanged for both Nifty and BankNifty

EOD Analysis For 23rd July 2012 and Outlook For 24th July 2012

OI in Nifty futures higher as we head into expiry week and it clocked 30 million with the fall today
VIX is certainly not reflecting the reality in prices [and this holds true at the moment across the bourses]

Critical levels remain unchanged for both Nifty and BankNifty; with a close below 5169, Nifty is near certain to test 5032-5092 band; holding 5032 will be crucial on closing basis as going below that would imply steeper cuts. On the upside, 5348 seems to be the upper limit for Nifty in July

EOD Analysis For 20th July 2012 and Outlook 23rd July 2012

OI in Nifty futures hovering around the 27 million mark and VIX is surprisingly cool on major bourses at the moment at sub-18 levels

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Recap: 

Key Support level for Nifty @ 5032-5092 and congestion band of 5169-5177-5196

Key resistances at 5280-5348-5378-5408

Closing above 5408 or below 5032 can yield another 144 points in the same direction IMHO

For BankNifty, the key resistance level now is 10800 and support at 10400 

closing above or below that can yield another 200-250 points in the same direction

Aggressive traders can initiate shorts with a close below 10600 and longs with a close above 10650

[EOD/EOW illustrative charts will be updated over the weekend]

EOD Analysis For 18th July 2012 and Outlook For 19th July 2012

OI in Nifty futures marginally higher today at about 27.5 million but VIX is excessively cool.

Critical levels and outlook remain unchanged for Nifty and BankNifty and Sell on Rise mode is still active

Above 5280, bulls may take the upside a bit further but moving beyond 5348 on closing basis in July series can be a low probability outcome.

EOD Analysis For 17th July 2012 and Outlook For 18th July 2012

OI in Nifty futures still stable and VIX 'seemingly' under control.

Critical levels remain unchanged for both Nifty and BankNifty

EOD Analysis For 16th July 2012 and Outlook For 17th July 2012

OI in Nifty futures marginally up at 27 million [Jul/Aug/Sep series together] but VIX is remarkably cool yet.

Critical levels and outlook remain unchanged from previous posts.

Quite a few of us in the Nifty blogosphere updated the Nifty / BankNifty charts on Daily / Weekly basis over the weekend and most are of the same opinion with of course some variations based on personal experience / interpetations

Bullish scenario: If 5032-5092 levels hold out in July series [5169-5177-5196 congestion range opined by some and they may be right] then we may have one more pending rally to the upside remaining before the downtrend resumes. [Closing below 5169, retesting 5032-5092 band is almost a certainty]

Bearish scenario: The tops may be in place and the major leg down may have commenced; the falls may not be severe initially but may get severe in August / September series if this scenario is in play
[Closing below 5032, another slide of 144 points down may be in the offering]

EOD Analysis For 13th July 2012 and Outlook For 16th July 2012

OI in Nifty futures still hovering around yesterday's levels i.e. 26 million apprx [taking July and August futures into account; wef Monday, July, August and September futures will be factored] and VIX is excessively cool and definitely not reflecting correct price action

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Next week can prove to be very exciting as far as trading is concerned with a negative bias [the negative bias is my personal bias remember] Options trades may be exciting next week with straddles [better to go with OTM strangles of August series options with no more than 30% of trading capital for options and a 15-20 point stop loss for the losing leg for Nifty. BankNifty options may be avoided due to their illiquid nature and better to straddle via futures]

EOD / EOW illustrative images for Nifty and BankNifty will be updated latest by tomorrow afternoon

Enjoy your weekend

Nifty EOD

Nifty EOW

BankNifty EOD

BankNifty EOW

EOD Analysis For 12th July 2012 and Outlook For 13th July 2012

History repeats itself with INFY dropping over 8% on open and steep cuts witnessed on all sectors [the expectation was a sectoral churn for today but that was not to be!]

OI in Nifty futures only had 1 million added compared to yesterday despite the fall today and premiums are still healthy on Nifty futures. Critical levels and outlook remain unchanged from previous post and closing below 5225 can inflict more pain for bulls. The premium on BNF futures are a bit disturbing

Just as was the case in previous quarter, one may look at a potential short-covering opportunity in CNXIT for a 50% retracement of the fall after TCS results are out; the fall started from 6200 odd levels on CNXIT July futures and a bottom may be formed in the 5600 zone thereby, giving an opportunity for about 200-300 points

The typical behavior of CNXIT around results season was covered in this April '12 post
http://niftyparadox.blogspot.in/2012/04/eod-analysis-for-16th-april-2012-and.html 

EOD Analysis For 11th July and Outlook For 12th July 2012

OI in Nifty futures still unchanged and VIX is excessively cool

Critical levels and outlook remain unchanged for both Nifty and BankNifty. Sectoral churns may be observed for a couple of sessions before the volatility of next week [i.e. INFY may surge whilst banks may start disappointing a bit or the other way around]

EOD Analysis For 10th July 2012 and Outlook For 11th July 2012

OI in Nifty futures still hovering around the 25 million mark and the trend remains unclear.

Critical levels for Nifty and BankNifty revised as follows

For Nifty:

Supports continue to be 5169-5225-5280
Closing below 5225 can invite a lot of shorts in the system and closing below 5169 will almost certainly invite  a retest of 5032 levels. Current volumes are sufficient to trigger the fall, except that there will be some delay in the fall with these volumes

Resistances continue to be 5325-5348-5378-5408
Closing above 5378-5408 [most important level is 5408 IMHO] will invite a retest of 5532 on upside but a 10% to 15% increase in volumes are a must to sustain the upsides [current volume can only take Nifty upto 5348 IMHO]

For BankNifty:

Supports at 10200-10250 band and the 10400-10450 band; steeper cuts can be anticipated with a close below 10200;

Resistances now at the 10750-10800 band

Illustrative Images for Reference

In terms of time, next week should be very exciting for trade with a downward bias in all likelihood [please note that the downward bias is my personal outlook considering 377 days from the 6th July '11 top of 5740; ultimately markets will determine the prices and volumes and of the critical levels are surpassed, we have to be agile enough to steer our positions in the direction of the then prevailing trend :D. Regardless of direction, the time frame will certainly be exciting for traders with a lot of opportunities]

EOD Analysis For 6th July 2012 and Outlook For 9th July 2012

OI in Nifty futures pretty much unchanged at 25 million and VIX is excessively cool

Critical levels and outlook remain unchanged for both Nifty and BankNifty

[Just would like to add that reversal levels have been moving up for Nifty at about 5225 on closing basis now and 10400 for BankNifty i.e. once the respective indices close below these levels, they become 'Sell on Rise']

EOD Analysis For 5th July 2012 and Outlook For 6th July 2012

OI in Nifty futures hovering around the 25 million mark still and VIX is well below 20 still

Critical levels remain unchanged for both Nifty and BankNifty [one may refer the illustrative chart posted yesterday] The trendline resistance is rising [the purple line] and Nifty is marginally touching the same and falling back.

Some positive news and volumes can help take the upside further

EOD Analysis For 4th July 2012 and Outlook For 5th July 2012

OI in Nifty futures pretty much unchanged and VIX is still very much on the lower side


Critical levels and outlook remain unchanged for both Nifty and BankNifty [ref images for details]

EOD Analysis For 3rd July 2012 and Outlook For 4th July 2012

OI in Nifty futures pretty much unchanged from yesterday;

Critical Levels and Outlook remain unchanged for both Nifty and BankNifty

Illustrative images will be uploaded later in the evening today

EOD Analysis For 2nd July 2012 and Outlook For 3rd July 2012

OI in Nifty futures higher compared to last week; VIX is excessively cool for now

Critical levels and outlook remain unchanged for both Nifty and BankNifty. As of now, upside looks capped at 5342-5348 on closing basis [intraday uspide seems capped at 5378-5408 levels]

This section will be reviewed with 2 consecutive closes above 5348

Throughout this month, we should remember that the period from 16th July onwards has a highly potent bearish tinge and one should not get carried away by current rally

EOD Analysis For 29th June 2012 and Outlook For 2nd July 2012

OI in Nifty futures lower by about 25% compared to yesterday on expected lines; the weekly trend has been strong and today being the monthly close has also been strong. Critical levels and outlook remain unchanged for both Nifty and Banknifty

Recap

For Nifty: 5169-5177-5196 remains a critical congestion zone and closing above 5169 can yield 144 points in the same direction. The entire congestion zone was taken out at open today and as long as 5169 holds on closing basis, Nifty has steam to go up

5169 + 144 = 5313 and 5342 was where an interim double top was formed. So these are the immediate targets provided 5169 holds on closing basis

For BankNifty: 9900-9950 is the crucial band and as long as this holds, BNF may retest 10200 levels; [this has been achieved today] Closing above 10200 opens BNF for another 150-200 points to the upside; closing below 10200 and that invites a cut of another 150 odd points and likewise closing below 9000-9950 opens a further 150-200 point cut.

Illustrative Charts

As far as time is concerned, 1 round of rally is done from 20th June Summer Solastice [history repeated itself, albeit a bit slowly] Keeping that in mind, we should also remember that on 8th July '11, Nifty made an interim top of 5740, fell from there, went to 5740 in the first week of Aug '11 to 5702 only to collapse 1000 points from there by 26th Aug '11

377 days from 8th Jul '11 comes to 17th Jul '12. Whilst Daily / Weekly / Monthly closes are all strong today, I would advise caution for the period 16th Jul '12 to 20th Jul '12 as the odds of Nifty collapsing 150-200 points in that period from the highs

How can one double check the shorting opportunity apart from waves and trendlines?
Watch the behavior of July 54/5500 Puts - for instance this morning when Nifty was hovering around the 5240-5250 range, the July 5400 Put was only commanding a time value premium of 25 odd points [and stayed that way till the end]

Inference: Upside has steam

Look for frontline stocks that exhibit behavior Open = Low [or close to the Low]
Inference: Upside has steam :D :D

Readers are requested to remember that we are not here for spoon-feeding; we can only share our interpretations

EOD Analysis For 26th June 2012 and Outlook For 27th June 2012

First and foremost, I am enjoying my vacation in the country side with cousins and relatives with limited connectivity and hence not much updates on blogs for a week or so.

Readers may recall that we had clearly established the period from 20th June would be very exciting for trade with plenty of opportunities and an upward bias; we hope you made some profits out of the wonderful opportunities that came over the last 4 sessions

OI in Nifty futures has moved up to about 28 million with 2 sessions to June expiry

Critical levels remain unchanged for both Nifty and BankNifty

Recap:

Crucial Support Band for Nifty @ 5032-5092; closing below 5032 opens Nifty for some steeper cuts

Crucial Resistance Band for Nifty @ 5169-5177-5196; closing above 5169 opens Nifty for 5342 on upside

Likewise, for BankNifty, 9900-9950 band is critical; closing above this band keeps hopes alive for retest of 10200 and closing below this band opens 200-250 points on the downside

Images for reference

On a stock-specific basis, we had recommended Larsen for a long trade above 1275 and it now seems that the upside has given up; bears should wait for a close below 1335-1340 levels for initial targets of 1275-1300;

Likewise, Tata Motors can be weak below 220

Next Update: Most likely on Friday 29th June '12

As usual, safe traders may choose to take a small break for a couple of days and let the dust settle on expiry

EOD Analysis For 18th July 2012 and Outlook For 19th July 2012

OI in Nifty futures marginally higher and a knee-jerk reaction IMHO for the RBI announcements

Fundamentally, the move is completely justified given the expectations of monetary easing that is expected from major central banks; although one must also mention here that neither the business credit expectations nor the inflation woes can be tamed by RBI's measures with liquidity coming from abroad IMHO. Given the limited tools at their disposal, RBI has done the right thing and markets will appreciate that though a lot of day traders felt disappointed today - RBI has signaled very clearly today that it is not toothless and has a fair pulse of economic conditions.

Hope you are all on your toes as we alerted readers last week itself that the current week is going to be exciting for trade and trending in either direction :D

Whilst Raghuji covers EW in depth and detail, allow me to just add 1 point regarding characteristic of waves
B - Waves are pretty phony

Why is this important?
The current fall in Nifty in all likelihood is a B wave [B wave of a smaller degree of corrective of corrective rise from 4770-5184] One may expect an upmove contrary to short term expectations AS LONG AS 5032  holds out on closing basis.

The upsides on FTSE, DJIA, DAX are all corrective bounces after falling almost 600 points, 1200 points and 1000 points respectively from their peaks - the minimum requirement of retracing 61.8% have been fulfilled though there is room for some more corrective bounces

A few days later the prices will reflect these points on the ticker in all likelihood.

EOD Analysis for 15th June 2012 and Outlook For 18th June 2012

OI in Nifty futures marching up nominally to about 20 million and VIX pretty much ok.

Critical levels and Outlook remain unchanged for both Nifty and BankNifty
The EOD and EOW charts will be uploaded in the evening once the data is in place

Enjoy your weekend.

Next week should be exciting as we approach Summer Solstice on 20th June 2012 and whilst the bias is on upside [it may be the other way also and hence one needs to be alert] As mentioned a couple of days ago, the next few sessions will be exciting with a lot of opportunities in either direction.

Nifty Daily

Nifty Weekly

BankNifty Daily [Please read the title as BankNifty EOD 15th June 2012]

BankNifty Weekly

EOD Analysis For 14th June 2012 and Outlook For 15th June 2012

OI in Nifty futures marginally above the 18 million mark and VIX shooting up significantly; steep cuts on BankNifty today relative to the fall in Nifty

Critical levels and outlook remain unchanged for both Nifty and BankNifty; Nifty closed below 5092 but still is above the 5032 level - will be keen to watch this tomorrow as it is also the Weekly Close.

Will update the charts tomorrow evening.

EOD Analysis For 13th June 2012 and Outlook For 14th June 2012

OI in Nifty futures still hovering around the 17-18 million mark and VIX is ok at current levels

Critical levels and outlook remain unchanged from previous posts for both Nifty and BankNifty

5169-5177-5196 is the congestion area based on last 15 months data above which some fireworks may come through; likewise 10200-250 level for BNF

Hope some of you managed to reap benefits in LT - outlook still remains the same i.e. Buy The Dips as long as 1275 holds on closing basis.

Big Boy has not yet joined the party with critical resistance in the 723-725 band; closing above this [ideally 2 consecutive closes] opens RIL for 750-770 levels

PS: Please note that stock specific outlooks are exceptions on this blog and mentioned only when I have some time and the opportunity seems a high probability one.....:D

EOD Analysis For 12th June 2012 and Outlook For 13th June 2012

OI in Nifty futures still hovering around that 17-18 million mark;

Critical levels and Outlook remain unchanged for both Nifty and BankNifty

Adding the EOD images as on yesterday for both Nifty and BankNifty with comments below the chart

The SnP Joke on Bond Ratings [Purely for Academic Interest - Read at Leisure :D]


Well the SnP statement just again showed that either the rating agencies are too far behind the curve or think that people are downright stupid. For starters, one major premise [not stated in the media] is the Coupon Rate which is hovering between 6% and 8.5% in India depending on maturity dates. If one makes an apple to pear comparison with the treasuries of fiat currencies and the fact that higher yields implies higher risks etc etc [which is the genuine case with Europe today], then its downright bizarre.

One needs to see what resides under those bonds and as far as the banking system in India is concerned, the  RBI also charges interest on money lent on its coffers, albeit a bit lower as is the case always with central banks and hence what is really critical is the SPREAD. The spread i.e. the difference between the coupon paid by RBI and the interest it earns on money lent is what matters; the global standard is 25 bps to 100 bps again depending on various factors and hence we are at par technically with the western world. For a simple reason that they pay literally zero interest rates for deposits and charge much smaller interest rates for loans made [any surprise as to why home loans and car loans go sub-4% and sub 5% rates there whilst they go north of 9% and 12% in India???]

Moreover, if one sees what is lying underneath those so called treasuries in fiat currency countries, one will be shocked to see the amount of junk and garbage that resides there; the only reason why they are able to maintain their hegemony is the fact that their GDPs per capita are way higher [upto 25 times higher than emerging economies including India] and the fact that there are some fiat currencies that enjoy being safe havens, most prominent being the USD

That being said, are things hunky dory in India? No not at all and some of the points mentioned by SnP are very valid. The lack of political will to get things done in terms of policies, the current account deficits, dwindling forex reserves etc etc; all said and done, India is on a far more sound footing than the western world today. Whilst the GDP per capita is much lower, the cycle of production and consumption is going on extremely well and at competitive prices [barring Real Estate which is still over-heated and oil products due to high import taxes] The threats in policy lacuna and growth concerns are very real and it is true when one expert economist [can't remember his name now] mentioned 'Growth in India is happening not because of conducive government policies but INSPITE of INEFFICIENT Government policies'

Emerging markets are not really building castles in thin air to see valuations evaporate overnight; our banking systems are not excessively leveraged and banking regulations are tight enough [sometimes too tough but that's the order of the day considering such a large population and lack of awareness that exists, at large] As far as hot money is concerned, they have to honor a lot of margin calls [and one must remember that the status quo is heaven as far as Bond Markets are concerned; take interest-free capital from US/UK/JP/ECB treasuries and park them in risk-free 6% to 8% coupons in emerging markets; there are forces that want to reduce this and get bond markets to buy troubled assets in Europe - THIS IMHO is the big game.

It is high time we ignore the ratings agencies as their models are both outdated and flawed to a large extent - as far as investments are concerned, keep investing when good stocks are being sold [dividends and PE multiples must be taken into account] As far as trading is concerned, as we always keep saying, trade as per your comfort with trendlines, momentum, waves, SAR signals whatever.......................

EOD Analysis For 11th June 2012 and Outlook For 12th June 2012

OI in Nifty futures still hovering around the 17-18 mill mark; prices have risen sharply and the critical level of 5092 has been broken on upside in today's open itself. Now as long as prices hold the crucial 5032 mark on closing basis, one may look to buy the dips from a trading perspective.

Nifty June futures coming close to parity / some premium [short-covering effect] whilst BankNifty futures are still trading at discount.

We need to bear in mind that just as the case was in Dec '11 / Jan '12, this is a liquidity / optimism fuelled rally than anything else [and will be the same all the way to 5944 on Nifty spot levels though it remains to be seen how much prices will continue to rally]

For BankNifty the 2 critical levels are 10200-250 and 9925-9950 levels; a close above 10200-10250 zone can take prices higher by another 150-200 points and a close below 9925-9950 levels can do a similar exercise downwards. Volatility can be expected to be higher over the next 10 to 12 weeks so trading requires one to be very alert and agile as most often than not, prices will be trending in either direction than grinding IMHO

EOD Analysis For 8th June 2012 and Outlook For 11th June 2012

Was tied up with personal work yesterday and hence could not update the blog.

OI in Nifty futures still hovering around the 17-18 million mark. The fall today can just be attributed to routine profit booking to end the week. The rise has been pretty sharp and we need to see how things pan out; if we go back to the image of the Falling Wedge of Nifty / BankNifty, prices have almost touched the upper trendline [refer image below]

If prices pierce that line on the upside, then one can be sure that bulls will try to maximize the upside as much as possible. Else, the range bound moves in the falling wedge will continue for the next few sessions Must admit here that the rise beyond 5032 on closing basis has been a bit baffling, esp considering the negative divergence

Nifty

Nifty - Price + MACD [5,34,5] on 15 Minute Charts for 8th June '12

Prices are making new highs but MACD is making Lower Highs!!! This is more prominent if one plays the bars from Tuesday until today and cross-checks the MACD movement

BankNifty

From individual stocks, LnT has given a clean break-out from the downward trending channel it got into from the interim highs of Feb '11. Clearly in buy the dips mode to the extent it keeps closing above 1275 for T1 = 1350 / T2 = 1400 / T3 = 1450....IMHO of course

EOD Analysis For 6th June 2012 and Outlook For 7th June 2012

First of all, hats off to the bulls for today's show esp given the negativity for the last couple of sessions. Nevertheless, seems like we are reaching the end of an interim bull party for now [5032-5092 band is where the upside seems capped on closing basis - ref chart below] and bears also can just relax. The tug of war may continue in the 4800-5032 band [with tolerance upto 5092 on closing basis on upside and 4750 on downside]

There is nothing great that has happened today but just the nature of discounting the future in advance;
[EW counts help anticipate those moves in advance - courtesy Raghuji] If ECB comes up with a dovish stance today, the upside will try to hit the resistance and come back in all likelihood and it can be expected to be a non-event when it's 'Breaking News' on tv; if the hawkish stance goes on, most of the gains can be expected to be given up.

Charts for reference

Nifty

One more point to add regarding technicals here [highest weightage for 60 min charts]
Both 60 min and 5 min charts are showing negative divergence i.e. price is making new highs but MACD is making Lower Highs. [For the last 2 days it was the other way around!] 15 minute charts have not shown this feature yet. {Readings checked @ 14:53 IST today}

BankNifty

Last but not the least, hope some of you enjoyed the gains in Tata Motors; Longs were recommended around the 220 zone on spot price on Friday :D Good to book some partial profits and lock in some gains right???

EOD Analysis For 5th June 2012 and Outlook For 6th June 2012

OI in Nifty futures still hovering around that 17 million mark and such volumes will not be able to sustain the upsides; BankNifty futures still going at discounts [this is the 5th week in a row with this feature]

Critical levels and outlook remain unchanged for Nifty and BankNifty; finer trading levels covered by Raghuji as usual.

I would encourage readers to go through the latest article by Nadeem Walayat on Euro-zone financial woes updated this weekend [just go to the The Market Oracle site link to which is available on this blog] Whilst some rhetorics are overdone in the article, overall, the Catch-22 situation has been well covered in the series of articles.

EOD Analysis For 4th June 2012 and Outlook For 5th June 2012

OI in Nifty futures still hovering around the 17 million mark and VIX pretty high at 28 levels

Critical levels and outlook remain unchanged for both Nifty and BankNifty; with a 35th close below the 5032-5092 band, safe to assume that this is the upside for June series on closing basis. On downside, remains to be seen how far we go but one may expect consolidation at current price levels for 2 weeks before starting any meaningful upside march from 20th June in all likelihood.

EOD Analysis For 1st June 2012 and Outlook For 4th June 2012

OI in Nifty futures dropped significantly to about 17 million today and VIX hovering around the 26 mark

Critical levels and outlook remain unchanged for Nifty and BankNifty; Monday's close is crucial and bulls desperately need a close above 5032 on Monday and that seems highly unlikely with today's price action. If that is the case, we perhaps need to brace for some more range bound moves until 20th June as well

On downside, 4800 holds the key [4750 is the last hope for bulls to achieve 5630-5740+ by Diwali]

Over the last couple of sessions, I have been getting queries on Tata Motors and allow me to put forth the chart and potential labels on lower time frames

EOD Analysis for 31st May 2012 and Outlook For 1st June 2012

OI in Nifty futures actually dropped a couple of million on expiry day compared to yesterday.

Critical levels and outlook remain unchanged for both Nifty and BankNifty from previous levels. Monday EOD will be crucial to determine the potential range for the next 2 weeks on Nifty i.e. we need to see whether Nifty closes above the 5032 level on Monday or not....

The problem is that rallies even of minor levels are being sold into and hence bulls are so close yet so far.....

EOD Analysis For 30th May 2012 and Outlook For 31st May 2012

OI in Nifty futures moving towards the 30 million mark and we are a day away from May series expiry

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Updating charts until yesterday EOD

Nifty

Following up on Jacs' comment on the EW section last night, from the lows of Dec'11, we did 4531 to 4740 odd levels, fell to 4640 before starting the impressive rally - so even with the bullish stance, a fall to 4800-4840 levels cannot be ruled out before the potential impending rally [difficult to start before 20th June 2012 IMHO] Any rally upto 5944 will only be a relief rally nevertheless that one must always bear in mind


BankNifty

Other Updates

Regarding Rollar, the rise beyond 54.5-55 has definitely stumped many including me but we must realize that it has more to do with Dollar Index than Rupee by itself and the negativity surrounding Rupee is being overdone in the media IMHO. Soon, we should be able to see some stability in the Rollar and a move below 52 in the next 6 to 8 weeks is likely [though the rise above 56 makes a test of 57 levels highly likely] and we may end this year well below the 48 mark [current situation is good for NRIs to convert their forex into rupees and park a good chunk {at least 30%} of it in FDs and Debt Schemes]

Too much is being spoken about the correction in Tata Motors as well but one needs to see the price action and as long as it stays above 220 levels, it is close to the previous all time highs [extrapolating for the stock split] Whilst the slowdown in India is currently being compensated for by the sales in JLR, by the end of this year, it should be the other way around.

Gold: We are yet to see a reasonable impact on Gold prices in India due to the Rollar effect. In USD terms, a bottom is expected to form in Gold around the USD 1350-1450 per ounce, in Rupee terms, seems unlikely to go below INR 23k for this year as of now. As prices march towards 25k mark, one may look to start accumulating again via Gold ETFs [the falls in dollar terms can be faster once prices close below the USD 1500 mark per ounce]

Last but not the least, trading on Futures and Options have been extensively covered in a separate blog section called Futures and Options Paradox and I won't be repeating the same on a regular basis on this blog :D

EOD Analysis For 29th May 2012 and Outlook For 30th May 2012

OI in Nifty futures rose to about 28 million today despite price action in a narrow range for most of the day [typical as we approach expiry]

I had a very fruitful weekend in Hyderabad with WaveRider [spent the entire weekend with him :D] and also managed to catch up with Captain Ramesh and his wife, Naresh and Karjunanji. Food from Ghungroo and Utsav were super duper with generous portions of rice still the same as I had last experienced [and a very pleasant surprise to me considering the ration quota portions in Mumbai and Bangalore] The home vacation has been extremely gratifying so far and look forward to accumulate more happy memories over the next 3 to 5 weeks!

Back to Nifty, I am just sharing the same view that I had voiced over the weekend to our friends in Hyderabad;

On upside, Nifty should be able to break out of the 5032-5092 band by next Monda [Friday 1st June will mark 34 consecutive trading sessions of Nifty closing below the crucial 5032-5092 band; if it does not take out  5032-5092 band on closing basis by 4th June 2012, the odds of staying below this band might be a reality for most of June series as well]

On downside, we Nifty should be able to take support in the 4800-4840 band [4750 last hope for bulls]

On a time scale, we are slowly inching towards Summer Solstice zone i.e. 20th June 2012 [adjusted to a day earlier as 2012 is a Leap Year] from where a major up move should commence regardless of where we are prior to that; if we take out 5225 prior to 20th June 2012, IMHO, the minimum upside target will be 5630 and ideally 5740+ [both these upside targets are for Diwali 2012] If we continue to drift in the 4800-5032 band for most part of June [or for all one knows lower], even then 20th June onwards, we should be able to see a rally on the upside from the lows, just as was the case after hitting 4531 on 20th Dec '11 [21st Dec '11 was Winter Solstice]

One can extrapolate the levels accordingly for BankNifty

To summarize, for the next few sessions, there is no change to the trading outlook i.e. one can comfortably build positional longs and shorts via futures as range-bound moves are anticipated till the end of this week with some whipsaws over the next 2 sessions :D

With regards to the technical glitches on the EW section, I do not prefer to disturb Raghuji during trading hours for administrative stuff - I will talk to him in the evening and figure out a way to avoid inconvenience to our dear readers. With regards to sharing of email address, I am not authorized to do that. Only Raghuji can decide whether and with whom he wants to share his personal contact details incl email address

EOD Analysis For 28th May 2012 and Outlook For 29th May 2012

OI in Nifty futures hovering around the 25 million mark;

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Any significant move above 5092 on closing basis may have to wait until next Monday IMHO

EOD Analysis For 25th May 2012 and Outlook For 28th May 2012

OI in Nifty futures hovering around the 24 million mark and VIX coming closer to measure price action

Critical levels and outlook remain unchanged and in all likelihood, the range for the pending 4 sessions to expiry is likely to be around 4800 and 5032 levels on spot unless something significant comes up

As mentioned earlier, the upside on closing basis for the remainder of May is likely to be restricted to 5032 levels i.e. after completing 21 consecutive sessions below this band [14 down now and 7 to go] So the odds of going above the 5032-5092 band and challenging the congestion zone of 5125-5150-5169-5177-5196 comes to the 2nd trading session of June series IMHO

[As usual my levels are much broader whilst finer levels are covered by Guruji......enjoy the weekend and I will be back next Monday EOD [hopefully depending on my travel schedule]

EOD Analysis For 24th May 2012 and Outlook For 25th May 2012

OI in Nifty futures hovering around the xx million mark

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Today marked the 13th consecutive trading close below the crucial 5032 mark and thus implying that the next 8 trading sessions will have this level as the upside on closing basis [not over 5092 in all likelihood till the end of May series]

EOD Analysis For 23rd May 2012 and Outlook For 24th May 2012

OI in Nifty futures moving up to almost 26 million today and we are 6 sessions away from expiry; VIX finally showing some sanity now but I would still avoid the temptation to go for Puts as the premiums are significantly high.

Critical levels and outlook remain unchanged for both Nifty and BankNifty; the one disturbing fact has been that there has been absolutely no sign of premiums returning on both Nifty and BankNifty over 2 weeks now

EOD Analysis For 22nd May 2012 and Outlook For 23rd May 2012

OI in Nifty futures hovering around the 24 million mark and VIX still not reflecting the real state of the market.

Critical levels remain unchanged for both Nifty and BankNifty from previous post

As mentioned earlier, I am enjoying my well deserved vacation so expect delays, bunking blogging paathshaala etc :D

Raghuji and SMO are covering trading levels in detail as usual.

EOD Analysis For 21st May 2012 and Outlook For 22nd May 2012

OI in Nifty futures a shade lower @ 23 million mark today and VIX around 24 mark

Critical levels and outlook for Nifty and BankNifty remain unchanged from previous posts
Despite a rise of over 350 points on BNF spot price in 3 sessions, no signs of premiums being restored on BNF futures

Recap
Supports have dropped significantly @ 4800-4840-4880
Resistances @ 4911-4944-4994-5032 [the expectation was a bounceback from 4911 levels but that was not to be.....]

Upside perhaps capped @ 5032 [proving to be so close yet so far right now] on closing basis until Thursday which marks the 13th consecutive session below this level. If not surpassed on closing basis by Thursday, then the odds of staying below 5032 increase for 1 more week.

9 sessions to go for expiry and it is prudent to take options positions in June series and ideally within 100 points  strike on either direction from spot rather than very far OTM culles and pulles

EOD Analysis For 18th May 2012 and Outlook For 21st May 2012

After a long time, today Nifty futures witnessed a huge surge in OI 25 million+ but the other side of the story is that it came with the falls....VIX catching up with reality a bit [ideally it should be around 27-28 levels right now]

Critical Levels  remain unchanged for both Nifty and BankNifty from previous posts

EOD Analysis For 17th May 2012 and Outlook For 18th May 2012

My apologies at the outset as I could not update the blog yesterday. Such sporadic breaks can be expected for the next 3 weeks as I'm on vacation to enjoy which is my first priority :D

Critical levels and Outlook remain unchanged from previous posts; neither is OI seeing any major difference despite these price changes. Today was the 8th consecutive close below 5032 and hence this may act as the ceiling on closing basis until next Wednesday unless bulls manage to spring a very positive surprise.

Positive divergence seen in front line stocks like LnT but BankNifty has broken a crucial support level from the lows of Dec over the last 2 sessions. So until BNF does not take out 9600 with conviction, upsides may be used by seasoned hands to short.

EOD Analysis For 15th May 2012 and Outlook For 16th May 2012

No change in OI as far as Nifty futures are concerned whilst some increase in OI seen in BankNifty futures over the last 2 sessions; VIX is certainly not reflecting true price action.

Critical levels and outlook remain unchanged from previous posts; safe to assume that we will not close above 5032 before Thursday EOD. We had indicated that a close below 5032 would take us upto 144 points on the downside and that has happened. Whether the carnage stops at that or goes further lower remains to be seen. 4800-4840 is perhaps the last hope for bulls to stem the carnage that started from 5629, moved in a grinding fashion and accelerated over the last 5 sessions with a couple of relief rallies via short covering in between.

As long as the lows of Dec / Jan hold, we may see a positive surprise coming up on the bourses and the Diwali target of 5740 remains intact [this is for investments] closing below 4800 would increase the odds that the relief rally for 2012 was over @ 5629 and Nifty is heading for new lows this year itself [the odds seem low for that but caution is advised as going below 4994 on closing basis was also a low probability event that took place]

The reason why this aspect is being constantly repeated is that apart from the index heavy components, a lot of front line names are suddenly trading @ prices closer to the earlier lows of this year when spot Nifty levels were much lower; technical indicators are in oversold condition but no major reversal has been seen yet; first sign of strength will be 2 consecutive closes around the 5032-5092 levels or higher

Delivery based buying in installments won't do any harm because if one takes a longer term outlook, a lot of names are available at attractive prices - upsides will be led by Banks and Infrastructure IMHO 

EOD Analysis For 14th May 2012 and Outlook For 15th May 2012

OI in Nifty futures still hovering around the 22 million mark which makes it difficult to sustain upsides; for sustained upsides, we need at least 10% more volumes on the bourses

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Nifty did not manage to take out 5032 today, making it the 5th consecutive close below 5032 levels; if it manages to take out 5032 on closing basis tomorrow, well and good for bulls else we can expect that to be the ceiling until Thursday EOD [following the sequence 2-3-5-8; intraday rises may go higher but closing above 5032 is the key - investment perspective remains buy the dips on delivery basis sans leverage. Trading of course depends on how much risk appetite one has and drop the losing leg @ predetermined exit points and ride the winning leg]

EOD Analysis For 11th May 2012 and Outlook For 14th May 2012

OI in Nifty futures still moving around the 22 million mark and VIX is notching up but certainly not reflecting reality of prices!

Today was the 4th consecutive close below the crucial 5032 support and it also marks the weekly close; we may not close above 5032 on Monday also; bulls need to stage a close above 5032 by Tuesday's close or else we can be below 5032 until next Thursday [following the 2-3-5-8 sequence]

Critical Levels and Outlook remain unchanged from previous posts; [the updated charts in yesterday's post should be self explanatory]

Enjoy the weekend and I will catch up with you on Monday EOD. Hope the shopping carts are active for delivery based buying - all seasoned hands always keep harping 'Buy Fear, Sell Greed and adhere to Stop Losses' but we fail to pull the trigger on all 3 signals most often than not :D

EOD Analysis For 10th May 2012 and Outlook For 11th May 2012

OI in Nifty futures marginally up by 1 million to 23 million and VIX still not reflecting the correct price action
Critical levels and outlook for both Nifty and BankNifty remain unchanged from previous post.

The deep discounts in BNF futures are a bit disturbing; we may have to wait till the middle of next week to see the regular 30-50 point premium and that too if spot prices start moving up significantly forcing shorts to cover

Will update 2 charts later in the day tonight with EOD price action on Nifty and BankNifty

Updated Charts [was excited with the IPL matches last night and didn't post these charts - lazy me....]

Nifty Daily Chart

BankNifty Daily Chart

EOD Analysis For 9th May 2012 and Outlook For 10th May 2012

OI in Nifty futures still hovering around the 21-22 million mark [have already factored May, June, July futures] and significant premium erosion in both Nifty and BankNifty futures [with BNF futures still going at significant discounts] VIX slowly marching up but definitely not reflecting true price action [it was swinging between 26-28 earlier this year at the same price levels!]

Critical levels and outlook remain unchanged for both Nifty and BankNifty from previous posts.

Today was the 2nd consecutive close below 5032; if Nifty does not manage to close above this level tomorrow, safe to assume that this level won't be surpassed this week.

On the stocks and sectors front, Reliance needs to take out 725, LnT 1225, Tata Steel 450 and of course my barometer BankNifty has to take out 9550 on closing basis to revive hopes for bulls IMHO

As far as investments are concerned, I hope the shopping carts are open now; the pending upside target of 5740 for 2012 is still intact as long as we do not breach the lows of Dec '11 IMHO. In fact a lot of counters are trading at levels closer to the lower levels earlier this year

Personal Clarification:
Time and again, I keep getting queries that my posts are confusing; one one hand I point out to potential downside on Nifty / BankNifty but still keep advocating buying

Again repeating myself that trading and investments are 2 different aspects all together;
I can switch between a bull and a bear as far as shorter time frames are concerned for futures that I trade - that is just for a 2-3 day time frame; as far as equities and index linked ETFs are concerned, I am bullish not just for the short term but longer term as well. When it comes to front-line equities, there is no doubt that falls are welcome opportunities. These are taken with 2-3 year time frames [minimum holding period is 1 year anyways to reduce the tax burden on gains, if any] So when I say good buying opportunity, it is purely in equities, against cash and not against margin that stays in the demat account. It needs a lot of patience and the right mindset to ignore the short term fluctuations.

I really find it surprising that there are instances when people were more than willing to pour in savings when front line counters were at highs [LnT at 1600+, JP Associates at 100+, IFCI at 65+, Hindalco at 170+ etc etc and now when these are available at much lower levels, people are reluctant to buy whilst still look to average positions in Punj Lloyd, KS Oils, Shri AshtaVinayak etc etc] - closing with Guruji's mantra To Each His Own - HHHHHH

EOD Analysis For 8th May 2012 and Outlook For 9th May 2012

OI in Nifty futures still hovering around the 20-21 million mark and VIX is surprisingly cool not really reflecting the true status of the volatility in the market

Critical levels and outlook remain unchanged for both Nifty and BankNifty from yesterday's post [please refer to the image posted in the updated post last evening] The close below 5032 does not augur well for bulls; need to see how things pan out tomorrow

EOD Analysis For 7th May 2012 and Outlook For 8th May 2012

OI in Nifty futures still hovering around the 21 million mark although the falls as well as the rise from the ashes have been meteoric; 5032 survived on closing basis on expected lines [but still some caution advised till 5225 is not taken out as the intraday breach to sub 5k levels keeps the possibility of backtesting 5032 again and possibly 4944 also alive; 61.8% retracement of the rise from 4531 to 5629 comes to 4950 whilst 50% comes @ 5080 and that was convincingly breached; above 5225, indicates that down move is over and until then the other option is still alive :D]

BNF fell more than expected but was great to see the short covering round from the lows of the day; is it out of the woods???? Not yet

Will update 2 charts later tonight with today's Nifty and BankNifty EOD charts

Do watch out Guruji's shopping cart for investments based on deliveries; [as most readers are aware, I prefer to go slow and steady with 60%-70% allocation to NiftyBees, BankBees, InfraBees as far as investments are concerned; for the balance, my list is very simple with LnT, Dabur, Cipla, Biocon, Ashok Leyland, JP Associates; just added some units of IRB infra since the falls below 150 with a 2-3 year target of 225+] Raghuji and Wave Rider are far more experienced as far as picking individual stocks are concerned.

Update with Charts

Nifty EOD Chart

BankNifty EOD Chart

EOD Analysis For 4th May 2012 and Outlook For 7th May 2012

OI in Nifty futures hovering around the 20-21 mill mark still and VIX has increased compared to yesterday but still not reflecting core price action.

Critical Levels remain unchanged for Nifty from previous posts [expecting a bounce back from the 5032-5092 band]

For BankNifty, the downside support has broken [please refer to the updated post yesterday with the BNF daily chart] Only respite was some premium was restored to the BNF May futures after trading the first 5 days @ discount; one round of short covering expected in the 9700-9750 region for about 150-200 points; safe traders should wait and buy above 9900 on May Futures price IMHO

EOD Analysis For 3rd May 2012 and Outlook For 4th May 2012

OI in Nifty futures still hovering around the 20 million mark and VIX seemingly under control [though in reality it is not!]


Nifty is still stuck in the same tight range of the Falling Wedge [ref updated image below and also note the volume scale below for April / May series]

On a time scale, it is indicating that in the period around 14th May to 16th May we should be able to see a decisive break-out or break-down in price


Critical Levels remain unchanged for Nifty
For BankNifty, will provide an update tomorrow as the dip below 10150 (a very crucial support level) is alarming and need to see how prices behave tomorrow as well.

Adding The Image For BankNifty
Tomorrow is very critical and so is holding on to 10050 on closing basis; rest is all given in the image itself

EOD Analysis For 2nd May 2012 and Outlook For 3rd May 2012

OI in Nifty futures still hovering around the 20-21 million mark and VIX is still below 20!

Critical levels and Outlook remain unchanged for both Nifty and BankNifty

Nifty Support Levels: 5032-5092-5136-5177-5225 [can stage a breakdown below 5032 opening 144 points to the downside]

Nifty Resistance Levels: 5280-5310-5348-5408 [can stage a breakout above 5348 and 2 consecutive closes above 5408 opens up a potential 144 point move to the upside]

As of now for May series, both breakout and breakdown scenarios are least probable IMHO and we should see consolidation within 5032-5310 range and this is still pretty good to trade via futures. It is an option writers paradise :D

[BNF Range therefore IMHO translates to 10150 and 10750 with same breakdown and breakout conditions]

EOD Analysis For 30th April 2012 and Outlook For 2nd May 2012

OI in Nifty futures still hovering around the 19 million mark making it difficult to sustain upsides [1.2 million added as we approached the Europe Open session]; VIX surprisingly cool [now well below 20!!]

Would again like to remind readers that OTM option straddles / strangles may not be very fruitful as long as Nifty is trading within a tight range of 200 points and that too, in a grinding fashion

Critical Levels and Outlook remain unchanged for both Nifty and BankNifty;

As far as trading is concerned, option writers still continue to rule the roost and for investors, corrections are good to buy into for deliveries; as of now, I still feel it is difficult to go below 5032 on closing basis on Nifty for May series but markets have their own ways...... ;-)

For tomorrow let us enjoy the May Day..................

EOD Analysis For 27th April 2012 and Outlook For 30th April 2012

OI in Nifty futures hovering around the 20-21 mill mark and VIX excessively cool yet

Critical levels for Nifty and BankNifty still remain unchanged and we should expect a range bound session for May i.e. Crucial Support for Nifty in the 5032-5092 band and Critical Resistance for Nifty in the 5348-5408 band [For BankNifty this should translate to about 10150-10750]

Strange to see BNF futures going @ discount wrt spot and need to observe this for a couple of sessions more [30-40 premium is the usual standard esp at the beginning of the series]

Just an image for illustration with data until yesterday EOD [this is the same chart I shared with our FB Group as well last night]

I am travelling for personal work over the weekend and hence Monday's post is doubtful from my end but expect to be regular from Tuesday.

EOD Analysis For 26th April 2012 and Outlook For 27th April 2012

OI in Nifty futures were about 26 million in the morning and inched upto 29 million towards Europe open. VIX is excessively cool and needs to rationalize a bit further.

Now that expiry woes are done, I will just highlight the fact that as far as May series is concerned, the crucial support band continues to be in the 5032-5092 band on closing basis for Nifty. From an investment perspective, such falls should be bought into on delivery basis and exposure directly to the index linked ETFs should be on the higher side IMHO

From a trading perspective, 5032-5092 will be an ideal bounce back band but upside still seems capped in the 5348-5408 region for May; on the downside, if 5032 is breached on closing basis, a further 144 odd points cut may be anticipated [though I personally feel that the odds of this happening are minimal - but just highlighting it so that one is aware]

The odds of Nifty hitting at least 5740 is very much realistic for 2012 if not more but the ascent may have to wait for the monsoon session to go through [21st June is Summer Solastice and IMHO, a nice upward move may commence around this time just like we had in 2009 as well as 2010]

OTM options must certainly be avoided even in May series just as the case was in April series as the odds are still stacked in favor of option writers with a potentially narrow range for Nifty for May 2012

EOD Analysis For 25th April 2012 and Outlook For 26th April 2012

OI in Nifty futures in the morning session dropped to 26 million [but came to 31 million just a few minutes before Europe opening] VIX is surprisingly cool as of now and IMHO its an aberration to take out options premiums

Critical levels and outlook remain unchanged from previous posts for both Nifty and BankNifty
5032-5092 most critical support band for Nifty
10150  [give or take a few points here or there] most critical support for BankNifty
Please note that these values are of importance on EOD basis [intra-day levels may go lower as it happened with BNF today]

Now on Nifty, some positive divergence was seen on LnT but not confirmed by Tata Steel, RIL, BankNifty etc and with expiry tomorrow the odds are split wide open

From an investment perspective, all steep cuts are buying opportunities with a 2-3 year horizon; for trading, as Raghuji also keeps mentioning, it pays to be nimble footed and take each day as it comes. Adhere to stop losses when hit and keep trailing winning positions and lock in the gains :D

Let us review the high-probability trading opportunities I had given  3 sessions ago

For each one, it could go either ways breakout or a breakdown - direction was uncertain when posted

JP Associates

Before I put the next 2 illustrations i.e. IDFC and Larsen, let me make the point very clear that none of the blog contributors Raghuji, SMO or myself want to demonstrate any form of attitude. If there is anything, we have attitude of gratitude towards our mentors who walked us through a grilling process forever emphasizing Effort + Discipline = Success; We are only working on the 2 left hand variables and sometimes we win and sometimes we lose. When we find ourselves on the losing side, we get out quickly [this took some practice as markets tend to take some tuition fees and then it was upto us how we use the lessons :D]

IDFC

Correction to the Lot-Size of IDFC: Lot size is 2000 and not 1000 as put in the image

Larsen
This one stumped me on the time aspect though [was expecting this a week further] the potential break-out or break-down was evident when flagged

Moral of The Story: If you have trading capital for stock futures, the best way to deploy it is to patiently wait like a hunter and when the opportunity does crop up, go full throttle with a moderate stop loss and enjoy the gains; minimal brokerage, maximum ROI within a short time frame and no emotional atyaachaar for our tiny brains :D

As mentioned when I had first put this up, I seldom put stocks on my blog and stick to Nifty and BankNifty on the blog with broader support and resistance levels. Finer trading aspects are covered by Raghuji and SMO; I put up this post today just to follow through on my previous illustration

Credit for spotting these opportunities goes to EW and basic TA only that always keep emphasizing the importance of Triangles and Diagonals; as price bars near the end point of the Triangle / Diagonal [also called pennets or flags] be alert because some swift moves can be anticipated in either direction.

Enjoy the hunt for flags and pennets. They seldom come up on daily charts [normally once a quarter] but when they do, the odds of hitting those for sixes are extremely high - HHHHHH