Thursday, January 12, 2012

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

What a disparate show on benchmark indices - CNXIT taking steep cuts on expected lines whilst BNF showing remarkable resilience [and vindicating the hypothesis that about 3 months lag time can be expected on CNXIT to mirror Nifty's corrective mode]. VIX hovering around 25 giving respite to bulls

[However, one can see the intraday charts from 6th Jan to 12th Jan for which we had warned in advance of significant price fluctuations and trading opportunities for alert players]

Nifty futures OI was pretty stable at 25 mill and lots of stock specific action seen; Axis Bank continued to extend gains whilst today, SBI put up a brave front for most of the day. [ICICI Bank and HDFC Bank also were in positive territory] Metals pack still doing well and auto majors managing to hover around the surface.

To the extent market is able to hold the 4800-4840 band and volumes support, 4911-4944-4994 cannot be ruled out with 1 major hurdle at the 4880 zone; this needs to be conquered with volume and momentum. IMHO, all good news for banks has been fully discounted [dovish RBI stance, cash infusion in SBI] but investments by PSU banks to revive the economy is perhaps a negative for the short term and this is not reflected well in the Banking segment. At the expense of repeating myself, no major falls can come on Nifty unless Banknifty shows signs of weakness and goes down

[With all the headwinds doing the rounds all over and such steep falls on the KBW Banking Index, job cuts, I am personally not able to comprehend the strength displayed on BNF - but need to respect what is reflected on the ticker; my personal stance remains the same - Short via futures with hedges of course and drop the losing leg but with a longer term horizon, keep accumulating BankBees when BNF spot is in sub-8k levels as these units will deliver stellar gains with a 2-3 year horizon]

For tomorrow, I personally expect the 4690-4728 band to hold out in case of negative triggers and Friday factor coming out. [I know this may sound confusing so let me put it in perspective below]

For Upside: If 4800-4840 zone holds out and volumes support, 4880 is a critical resistance which if conquered with volume and momentum, we can expect Nifty to try for 4911-4944-4994

For Downside: First sign of weakness below 4795 with volume and momentum but IMHO 4690-4728 zone may once again provide some respite. Full weakness to be confirmed only after a close below 4690 and then we need to brace for a big slide!

2 downside gaps pending to be filled and that should happen within the next 3 weeks or so.

Erratta: I mentioned Friday being Makar Sankranti day by mistake yesterday but that is not the case; my apologies for the same.

No comments: