Tuesday, January 10, 2012

EOD Analysis for 10th January 2012 and Outlook for 11th January 2012

Finally some increase in volumes today; a positive session saw OI in Nifty futures at about 24.5 million in the first half and another million added after Europe opened in the Green. As usual BNF [It is significant that BNF has slowly appreciated by almost 1000 points in 2 weeks time and has potential for some more - markets are trying to discount positive factors in advance!] led the gains and broader markets performed well but CNXIT was pretty lacklustre [with such a rise, was expecting to see 6425-6450 levels in CNXIT but that did not happen]

VIX below 25 - this gives a lot of relief to bulls for the time being.

IMHO, eventual targets are 7500-7550 odd levels on BNF spot and 5600-5700 levels on CNXIT before starting the fresh leg up.

In terms of relief rally, the minimal target for Nifty has been achieved [please see Raghuji's post made yesterday] and is slowly moving towards the optimal target.

So where do we go from here

Critical Resistances: 4880-4911-4944-4994

Critical Supports: 4640-4690-4728-4751-4800

Today's close above 4840 and close to the day's high is very significant IMHO and we should not be surprised to see an attempt towards 4944-4994 [provided volumes increase by another 10% at least]

Now only a close below 4690 will usher the panic once again and this is still very much possible during this series [to fill in the pending downside gap]

Other Updates:
Dow: Still has potential to go to 12450-500 levels and only 2 consecutive closes below 11500 can confirm that the relief rallies are over on this one and we have to say adios to higher levels for a long time.

FTSE: 5650 odd levels were expected on Santa Rally but they came in the New Year's week. This one too may just make one valiant attempt towards 5700-5750 before heading down and eventual target is 4900 in the next few weeks. Confirmation that relief rally is over with 2 consecutive closes below 5550 and full weakness after a weekly close below 5350

DAX: Perhaps, a flick towards the 6350-6400 levels with a dovish ECB stance before heading downwards to sub-5k levels. Weakness to be confirmed with 2 consecutive closes below 5750

Euro Stoxx 50: Weakness to be confirmed only after a close below 2150

Euro-Dollar: These are relief rallies and the pair is on its set path to 1.25 where some respite might come with eventual targets of 1.1850 odd levels.

Precious Metals:
Gold and Silver may see USD 1700 and USD 33 odd levels respectively in the near future in a relief rally but these will be opportunities to book profits as eventual targets are USD 1350-USD 1450 for Gold and USD 22-USD 23 odd levels for silver on Comex; the correction in Rollar will further impact prices in Indian markets IMHO

One should remember that nothing has changed fundamentally over the last 1 month [or for that matter last 2 weeks!] Some may call it the January effect, some may call it the election effect or whatever mumbo-jumbo.

There are a lot of slides pending on all bourses and the current upswings are opportunities to book profits or escape with minimal losses.


vishal said...

dear nag bhai do we see 7500 on bnf this jan series or in feb. thanks

vishal said...
This comment has been removed by the author.
reachnagraj / theknight16 said...

Dear Vishalji: Difficult to time the move for 7500 on BNF but seems unlikely for Jan series unless results and RBI disappoint [ref yesterday's post]; perhaps towards Feb expiry or mid-March would be more realistic IMHO for such lower levels on BNF.

First signs of weakness will be a weekly close below 8200-8250 odd levels