Friday, March 16, 2012

EOD Analysis For 16th March 2012 and Outlook For 19th March 2012

OI in Nifty futures was unchanged;

The budget day volatility is similar to 2011; Will be closely watching how markets react to this in the initial 3 sessions next week.

I have no access to any of the Indian channels and hence clueless as to what is happening in the Great Circus in Delhi [today's ring master is Pranab da :D] except for some news bytes on the web. I simply try to analyse the charts and this is what my seniors keep telling me; ignore the news and study the charts. IMHO most of the positives/negatives have been discounted by markets [today's volatility seems typical of a budget day to confuse people].

Markets are also aware of how good politicians all over the world are with budget projections and actuals; President Obama had promised to bring down the fiscal deficit to half when he assumed power; if anything, the budget deficit has widened by over 40% courtesy QE1, QE2, TWIST etc and has been consistently over 1.5 Trillion Dollars PA; Euro-zone Merkozy kept harping that things in control after bail-outs and no Europe QE [pleeeze spare us the smoke and fog mirrors - LTRO is nothing but QE!!] but we can see where and how things are and the contagion is still not showing any signs of cooling off; adding to the woes are that the risks have suddenly shifted from banks to tax payers in Euro-zone!

Bottom-line: we the mango people of India need to assess what best we can get for our hard earned money considering a CPI inflation of over 20% PA and real estate prices ballooning like hell. The IT exemption limit increasing marginally is a good sign.

Back to Nifty / BankNifty, critical levels and outlook remain unchanged. Current volumes are good for about 80 points to the upside and 150 points to the downside. We need at least 5% more volumes to go north of 5480-5532 levels. For 2 days in a row now, lack of volumes are ensuring that upsides do not sustain; However, it seems unlikely to go below 5177-5196 band at least for the next 1 week on closing basis IMHO

Erratta: March 21st marks Spring Equinox and not Summer Solastice as I had mentioned earlier [Summer Solastice is on 21st June]

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