Friday, March 30, 2012

EOD Analysis for 30th March 2012 and Outlook For 2nd April 2012

OI in Nifty futures dropped to 26 million on expected lines, today being the first session of the new series. VIX cooled off significantly; over the next 8 to 10 trading sessions, we may observe call premiums[the extrinsic value part of it] dropping faster than put premiums as prices gyrate

Premiums on futures are pretty high at this point of time
Critical levels and outlook remain unchanged for both Nifty and BankNifty;

Recap For Nifty:
For Upside:
Initial sign of strength above 5348 and then 2 consecutive closes above 5408. Once this is achieved, there will be resistance at 5532 which if taken out with conviction opens Nifty for 5580-5608-5655-5690-5740 [the upsides will need to be supported with strong volumes]

For Downside:
Initial signs of weakness with a close below the 5177-5196 band after which 5032-5092 band will be the critical support; if this is also broken on closing basis, the corrections will be much deeper and the outlook given in the illustration below will get invalidated.

Recap For BankNifty:
For Upside: 2 consecutive closes above 10200 and BNF opens for 10400+ and 2 consecutive closes above 10400 opens BNF for retest of 10800 [very strong resistance level]

For Downside: 2 consecutive closes below 10150 and BNF opens for another 150-200 points to the downside [already happened prior to expiry once and tested 9900 levels]

Updating the Nifty EOD chart

The only other aspect of price action has been that for the last 3 weeks, the resistance offered by the red trendlines [to the downside from 5630] have not been taken out with conviction yet; if volumes and momentum favor Nifty next week we should be able to see a breakout to the upside

One leg down is due but whether that happens from here or from further up depends [50% retracement can be expected and if it is from here, that would mean {5306-5136}/2 + 5136 i.e. 5221; else whatever is the high created next week] Today's close is also significant as it is the monthly close for March as well and the closing has been strong on all 3 time frames i.e. Daily/Weekly/Monthly

Sensitive Dates for April series as follows

2nd April [Direction uncertain :(]
5th April  [Direction to be determined later]

16-18April - Very Very Important as this period coincides with 377 days from the 6th April '11 high of 5944 [My personal bias is negative for this period but will revisit as we come closer to this date]

23rd April [Direction to be determined later]

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