Wednesday, February 29, 2012

EOD Analysis For 29th February 2012 and Outlook For 1st March 2012

Extremely positive start to the day and as Raghuji also mentioned in his blog yesterday that we are in for some days of high volatility and some days of boring flat sessions; at one stage all the gains of the day were given up only to have some quick recovery as well. Savvy traders can do well in such environments whilst some may find it difficult to trade as such frequent change in direction can trigger stop losses on either side; all that I can say is take positional trades and it is ok to stay out during whipsaw sessions. Just repeating the mantra of Harshal bhai aka spiderman - trade little - trade healthy

Volumes were a bit lacklustre in the morning despite the rise with OI in Nifty futures hovering around the 26.5 million mark but after Europe open, another 1.2 odd million was added to the OI in Nifty futures [this has become a routine affair now] VIX almost touching 27 at one stage and that signals caution for bulls. Premiums on Nifty futures still very high [the justification IMHO is that the majority consensus is on the bull side and the current series is longer by a week than usual giving some additional time value to the FnO segment]

Critical levels and outlook remain unchanged from yesterday.

Today marked the 34th consecutive close above the 5177-5196 band on closing basis. If this holds out tomorrow [which as of now seems like it will], then bulls and bears both may take this as the floor for another 20 odd trading sessions [justification given in yesterday's post]. Of course, there are uncertainties in market always but it is important to mentally make note of high probable v/s low probable outcomes [and switch gears when the appropriate signal is received]

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