EOD Analysis For 13th April 2012 and Outlook For 16th April 2012

Whooosh - the premise that the grinding fall in INFY during the course of this week had factored most of the negatives but that was not to be..........:( [Put Writers scrambling for cover :D]

Critical Levels and Outlook remain unchanged on both Nifty and BankNifty from previous post

For next week 5032-5092 support band will be critical for Nifty on closing basis whilst 5348 will be critical resistance on the upside. [even in case of a severe fall, 5109 should ideally provide a strong bounce back]

Just updating the image posted earlier this week with data upto yesterday EOD

Last but not the least, would like to point out that now it is futile trying to second guess price action on Nifty basis what is happening on Dow simply because both are in 2 different cycles IMHO. Nifty made the top of 6338 in Nov '10 whilst Dow took 6 more months to find the interim top; on the other hand Nifty has made an interim bottom in Dec '11 whilst Dow is just in the process of beginning its correction. From an EW perspective, there are instances when the falls/rises in Nifty/Dow will have a positive correlation but those are more of co-incidences. Both these indices are on different trajectories

EOD Analysis For 12th April 2012 and Outlook For 13th April 2012

OI in Nifty futures still hovering around 19.5 mill - 20 mill mark and such low volumes overall on the bourses won't be able to sustain the upside. Though the risk reward ratio is still in favor of buying the dips in a staggered manner.

Critical levels and outlook remain unchanged. Expecting 5177 to hold out on closing basis tomorrow as well on Nifty and 10150 to hold out on BankNifty. [Intraday dips on Nifty may go below 5177 but the odds of going below 5135 are low and 5109 can be expected to provide a very strong bounce back level; if that is breached with volumes and momentum, then bulls have a problem - BIG TIME :D]

Next week will be far more exciting as Nifty usually offers large trading swings when we approach the 377 day period from swing highs and lows of the previous year [16th April marks the exact 377 day from the 6th April 2011 high of 5944; so the period 16th to 18th April will be very likely turn out to be exciting to play for and Im looking forward to it] That being said I would also like to reiterate that one should refrain from the temptation of going for OTM Options; Also one should avoid guessing the direction in advance as tomorrow is the last trading day of this week and by Monday, there will be significant erosion of time value on options. Better to take fresh guard on Monday IMHO

EOD Analysis For 11th April 2012 and Outlook For 12th April 2012

OI in Nifty futures still low at 19 million [50% drop from March series expiry OI levels!!!]; VIX hovering around 22-23 levels. Healthy premiums restored on BNF futures compared to the last 3 sessions :)

Critical Levels and Outlook For both Nifty and Banknifty remain unchanged from yesterday;

Still expecting 5177 to hold out on closing basis for this week; based on yesterday's and today's price action, the worst case scenario seems to be 5109 [ref Falling Wedge image posted on Monday - 5109 is the floor for April  series i.e. the Mother Resistance Line of 2011 price action and current medium term support line]

EOD Analysis For 10th April 2012 and Outlook For 11th April 2012

OI in Nifty futures dropped a shade lower to 19 million on open today [1.2 mill added after Europe open] VIX slowly inching towards the 23 mark though it cooled towards the end;

Premiums on Nifty futures are healthy but premiums on BNF futures have dropped considerably in April series [normally they go at a 50 point premium for current series but last 3 sessions or so, the BNF April futures are hardly commanding a premium of more than 20-25 points;]

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Recap
Expect consolidation in Nifty in the range 5177-5348 on closing basis for this week
2 consecutive closes above 5408 will affirm strength of the upside.
2 consecutive closes above 5532 will give targets of 5608-5655-5690
[Odds of going to these levels in April series are very low!]

A close below 5177 will invite retest of 5032-5092 band [very very critical] If 5032 broken on closing basis, almost the entire rally from lows of Dec may be reversed [Odds of this scenario also in April series are very low!!]


2 consecutive closes above 10200 and BNF will retest 10400-10450 levels
2 consecutive closes above 10400 and BNF will retest 10750-10800 levels [very very strong resistance in this band]

10150 is very very critical for BNF;
2 consecutive closes below 10150 and one should brace for deeper cuts on BNF

Exact trading levels and reversals covered by Raghuji and SMO; timing wise, next week can be very exciting and Im looking forward to it.

On a stock specific basis, INFY has taken steep cuts over the last 3 to 5 trading sessions and hence negative results may be a non-event later this week.

EOD Analysis For 9th April 2012 and Outlook For 10th April 2012

OI in Nifty futures is still pretty low around 21 million or so; VIX marginally up above 22;

Critical levels and outlook remain unchanged for both Nifty and Banknifty;

As long as 5177 and 10150 hold on Nifty and Banknifty respectively on closing basis, the risk reward ratio is still skewed in favor of buying the dips IMHO That being said, 5348-5408 zone is stiff resistance as well on the upside!!! [trading levels and EW perspectives as usual covered by Raghuji and SMO so I won't dwell too much into that. This week we should be able to see consolidation within a range of 150 odd points with risk reward in favor of buying the dips.

I would again like to reiterate that the urge to build options straddles should be avoided this week as the premium burn rates will be high; odds are stacked in favor of option writers at the moment [I keep repeating this as a lot of us have the tendency to get lured by the temptation of quick rewards via options; in trending markets, options are ok but in range bound markets, they are money sucking instruments :D]

Next week will be very exciting in terms of large swings to play for in all likelihood as Nifty will likely pay homage to the 377 calendar day anniversary from the high of 5944 created on 6th April 2011;