Wednesday, January 18, 2012

EOD Analysis for 18th January 2012 and Outlook for 19th January 2012

Pretty much a flat session for the morning session but volumes were very much the same as yesterday in Nifty futures. This should go on increasing IMHO regardless of which direction Nifty takes on now as we are just 5 sessions away from expiry of current series. ONGC, Reliance extended their gains which to a large extent kept Nifty just marginally negative despite steep cuts on Banknifty, CNXIT and profit booking on other counters in the morning session.

VIX below 24 still and that is respite for bulls and bad news for bears for now

Seemingly tough fight between bulls and bears in a tight range but IMHO, the scale is tilted marginally in favor of bulls now with a 2nd close above 4944 levels.
No change to ultra short-term outlook

To the extent 4800-4840 band is intact and trades above 4880 with volumes, bulls can take this tussle to the upside challenging 5032-5092 levels which if further conquered with volume and momentum, can challenge 5169-5177 levels also [I would personally assign a probability of 25% for this in the next 8 to 10 trading sessions]

First sign of weakness only below 4785 [with volume and momentum] and panic only with a close below 4690 [here the VIX levels will start soaring above 27-28 levels IMHO]

5 sessions prior to expiry and the game is interestingly poised; my expiry predictions flop down and hence I have given up on that long ago; I just take each session as it comes without worrying too much about expiry;

That bears will take command and retest the lows and perhaps make a new low- I am reasonably sure of that with my personal probability assignment @ 99%

The only thing to watch out for is whether we go down from here or from higher levels and with today's EOD, I am inclined to believe that we may go higher on Nifty first before collapsing.

Critical Dates - Basic Overview

Let us see how critical swing anniversary dates have played out so far

5th Nov '10 - Nifty made a high of 6338 and started correcting; 377 days later we saw similar price action

6th Jan '11 - Nifty made a high of 6181 and started correcting; 377 days later, an upswing came in i.e. the polarity of price action was opposite this time

11th Feb '11 Nifty made a low of 5177 and 377 days from there works out to 22nd Feb '12
If the polarity decides to be the same this time, then we can expect steep corrections in the 16th Feb to 25th Feb '12 period.

If the polarity decides to be of opposite nature, then we can expect Nifty to take steep cuts in the first 2 weeks of Feb '12 and then make its upward march.

Bull market cannot start before Spring Equinox of 21st March '12 IMHO [Im inclined to believe that it will start around 21st June '12 with Summer Solastice]


sometimesbullsometimesbear said...

Nag could u explain the basic funda of critical dates, esp 377 days etc.

Also any astro connection to equinox/soltice to markets?

reachnagraj / theknight16 said...

Well Gann-Fibbo say anniversaries from major swing tops and bottoms are important and 377 is the corresponding Fibbo number as per Fibbo Number series [although the solar year has 365/366 days]

I just took them on face value and so far they have proven their merit. The principle does not specify a direction for the swing but it does ask one to be alert and enjoy the benefit of the swing whichever direction that takes

For the 4 major swing days of the year 2 Equinoxes and 2 Solastices, there is an astronomical effect with regards to planetary longitudes and magnetic forces. I don't know anything about the astrological factors - Sarmaji is the right person to advise on that

Again - these principles are esoteric in nature and with my limited experience in the market, I have seen that these dates do produce great tradeable swings and hence incorporated them in my studies :-D

Will continue to use them till they benefit me