EOD Analysis For 18th May 2012 and Outlook For 21st May 2012

After a long time, today Nifty futures witnessed a huge surge in OI 25 million+ but the other side of the story is that it came with the falls....VIX catching up with reality a bit [ideally it should be around 27-28 levels right now]

Critical Levels  remain unchanged for both Nifty and BankNifty from previous posts

EOD Analysis For 17th May 2012 and Outlook For 18th May 2012

My apologies at the outset as I could not update the blog yesterday. Such sporadic breaks can be expected for the next 3 weeks as I'm on vacation to enjoy which is my first priority :D

Critical levels and Outlook remain unchanged from previous posts; neither is OI seeing any major difference despite these price changes. Today was the 8th consecutive close below 5032 and hence this may act as the ceiling on closing basis until next Wednesday unless bulls manage to spring a very positive surprise.

Positive divergence seen in front line stocks like LnT but BankNifty has broken a crucial support level from the lows of Dec over the last 2 sessions. So until BNF does not take out 9600 with conviction, upsides may be used by seasoned hands to short.

EOD Analysis For 15th May 2012 and Outlook For 16th May 2012

No change in OI as far as Nifty futures are concerned whilst some increase in OI seen in BankNifty futures over the last 2 sessions; VIX is certainly not reflecting true price action.

Critical levels and outlook remain unchanged from previous posts; safe to assume that we will not close above 5032 before Thursday EOD. We had indicated that a close below 5032 would take us upto 144 points on the downside and that has happened. Whether the carnage stops at that or goes further lower remains to be seen. 4800-4840 is perhaps the last hope for bulls to stem the carnage that started from 5629, moved in a grinding fashion and accelerated over the last 5 sessions with a couple of relief rallies via short covering in between.

As long as the lows of Dec / Jan hold, we may see a positive surprise coming up on the bourses and the Diwali target of 5740 remains intact [this is for investments] closing below 4800 would increase the odds that the relief rally for 2012 was over @ 5629 and Nifty is heading for new lows this year itself [the odds seem low for that but caution is advised as going below 4994 on closing basis was also a low probability event that took place]

The reason why this aspect is being constantly repeated is that apart from the index heavy components, a lot of front line names are suddenly trading @ prices closer to the earlier lows of this year when spot Nifty levels were much lower; technical indicators are in oversold condition but no major reversal has been seen yet; first sign of strength will be 2 consecutive closes around the 5032-5092 levels or higher

Delivery based buying in installments won't do any harm because if one takes a longer term outlook, a lot of names are available at attractive prices - upsides will be led by Banks and Infrastructure IMHO 

EOD Analysis For 14th May 2012 and Outlook For 15th May 2012

OI in Nifty futures still hovering around the 22 million mark which makes it difficult to sustain upsides; for sustained upsides, we need at least 10% more volumes on the bourses

Critical levels and outlook remain unchanged for both Nifty and BankNifty

Nifty did not manage to take out 5032 today, making it the 5th consecutive close below 5032 levels; if it manages to take out 5032 on closing basis tomorrow, well and good for bulls else we can expect that to be the ceiling until Thursday EOD [following the sequence 2-3-5-8; intraday rises may go higher but closing above 5032 is the key - investment perspective remains buy the dips on delivery basis sans leverage. Trading of course depends on how much risk appetite one has and drop the losing leg @ predetermined exit points and ride the winning leg]