Wednesday, January 11, 2012

EOD Analysis for 11th January 2012 and Outlook for 12th January 2012

Morning session saw OI in Nifty futures drop to 23.5 odd million and but as Europe session opened, another 1.5 million added. As mentioned earlier, to sustain yesterday's high [or for that matter today's high] and move up further at least 10% more volumes need to come in.

BNF's positive session IMHO, are clear indications of markets trying to discount a dovish RBI stance in advance and perhaps will end up making it a non-event if the dovish stance does come out [any disappointment in expectations from RBI can again set BNF to take steep cuts; not to forget that shorts in BNF and Axis Bank in particular have been royally trapped in the last 2 sessions!]

VIX still hovering around sub-25 giving some relief to bulls. CNXIT just not participating in these upsides but fortunately thethering on to 6275-6300 [the high of 6400 hardly lasted for any time] odd levels somehow [IMHO - this one can bring in a lot of disappointment in the next few weeks, particularly tomorrow with INFY's results and earnings guidance. Expecting PE rationalization in the near future to 15-16 levels from the current factor of 20 across the board for TCS, Wipro etc of which TCS has already got a major rationalization factor]

Critical levels remain unchanged and if volumes support, bulls may be lucky to see 4900+ levels within a couple of sessions. As far as news factor is concerned, on the domestic side, RBI policy and IT results will be a major factor in current series. On the international front, Euro woes will continue to dominate the scenario.

Expecting the 2 pending downside gaps to be filled within the next 3 weeks or so. Tomorrow may gain be a day of opportunities followed by 17th Jan as a high weightage day for Jan series.

On Friday, the day of Makar Sankranti, the action on bourses may not be very sweet but this date carries lower weightage - caution is advised and perhaps may be better to enjoy the festivity than risk trading margin.

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