Friday, June 15, 2012

EOD Analysis for 15th June 2012 and Outlook For 18th June 2012

OI in Nifty futures marching up nominally to about 20 million and VIX pretty much ok.

Critical levels and Outlook remain unchanged for both Nifty and BankNifty
The EOD and EOW charts will be uploaded in the evening once the data is in place

Enjoy your weekend.

Next week should be exciting as we approach Summer Solstice on 20th June 2012 and whilst the bias is on upside [it may be the other way also and hence one needs to be alert] As mentioned a couple of days ago, the next few sessions will be exciting with a lot of opportunities in either direction.

Nifty Daily
Nifty Weekly
BankNifty Daily [Please read the title as BankNifty EOD 15th June 2012]
BankNifty Weekly

Thursday, June 14, 2012

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

OI in Nifty futures marginally above the 18 million mark and VIX shooting up significantly; steep cuts on BankNifty today relative to the fall in Nifty

Critical levels and outlook remain unchanged for both Nifty and BankNifty; Nifty closed below 5092 but still is above the 5032 level - will be keen to watch this tomorrow as it is also the Weekly Close.

Will update the charts tomorrow evening.

Wednesday, June 13, 2012

EOD Analysis For 13th June 2012 and Outlook For 14th June 2012

OI in Nifty futures still hovering around the 17-18 million mark and VIX is ok at current levels

Critical levels and outlook remain unchanged from previous posts for both Nifty and BankNifty

5169-5177-5196 is the congestion area based on last 15 months data above which some fireworks may come through; likewise 10200-250 level for BNF

Hope some of you managed to reap benefits in LT - outlook still remains the same i.e. Buy The Dips as long as 1275 holds on closing basis.

Big Boy has not yet joined the party with critical resistance in the 723-725 band; closing above this [ideally 2 consecutive closes] opens RIL for 750-770 levels

PS: Please note that stock specific outlooks are exceptions on this blog and mentioned only when I have some time and the opportunity seems a high probability one.....:D

Tuesday, June 12, 2012

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

OI in Nifty futures still hovering around that 17-18 million mark;

Critical levels and Outlook remain unchanged for both Nifty and BankNifty

Adding the EOD images as on yesterday for both Nifty and BankNifty with comments below the chart

The SnP Joke on Bond Ratings [Purely for Academic Interest - Read at Leisure :D]

Well the SnP statement just again showed that either the rating agencies are too far behind the curve or think that people are downright stupid. For starters, one major premise [not stated in the media] is the Coupon Rate which is hovering between 6% and 8.5% in India depending on maturity dates. If one makes an apple to pear comparison with the treasuries of fiat currencies and the fact that higher yields implies higher risks etc etc [which is the genuine case with Europe today], then its downright bizarre.

One needs to see what resides under those bonds and as far as the banking system in India is concerned, the  RBI also charges interest on money lent on its coffers, albeit a bit lower as is the case always with central banks and hence what is really critical is the SPREAD. The spread i.e. the difference between the coupon paid by RBI and the interest it earns on money lent is what matters; the global standard is 25 bps to 100 bps again depending on various factors and hence we are at par technically with the western world. For a simple reason that they pay literally zero interest rates for deposits and charge much smaller interest rates for loans made [any surprise as to why home loans and car loans go sub-4% and sub 5% rates there whilst they go north of 9% and 12% in India???]

Moreover, if one sees what is lying underneath those so called treasuries in fiat currency countries, one will be shocked to see the amount of junk and garbage that resides there; the only reason why they are able to maintain their hegemony is the fact that their GDPs per capita are way higher [upto 25 times higher than emerging economies including India] and the fact that there are some fiat currencies that enjoy being safe havens, most prominent being the USD

That being said, are things hunky dory in India? No not at all and some of the points mentioned by SnP are very valid. The lack of political will to get things done in terms of policies, the current account deficits, dwindling forex reserves etc etc; all said and done, India is on a far more sound footing than the western world today. Whilst the GDP per capita is much lower, the cycle of production and consumption is going on extremely well and at competitive prices [barring Real Estate which is still over-heated and oil products due to high import taxes] The threats in policy lacuna and growth concerns are very real and it is true when one expert economist [can't remember his name now] mentioned 'Growth in India is happening not because of conducive government policies but INSPITE of INEFFICIENT Government policies'

Emerging markets are not really building castles in thin air to see valuations evaporate overnight; our banking systems are not excessively leveraged and banking regulations are tight enough [sometimes too tough but that's the order of the day considering such a large population and lack of awareness that exists, at large] As far as hot money is concerned, they have to honor a lot of margin calls [and one must remember that the status quo is heaven as far as Bond Markets are concerned; take interest-free capital from US/UK/JP/ECB treasuries and park them in risk-free 6% to 8% coupons in emerging markets; there are forces that want to reduce this and get bond markets to buy troubled assets in Europe - THIS IMHO is the big game.

It is high time we ignore the ratings agencies as their models are both outdated and flawed to a large extent - as far as investments are concerned, keep investing when good stocks are being sold [dividends and PE multiples must be taken into account] As far as trading is concerned, as we always keep saying, trade as per your comfort with trendlines, momentum, waves, SAR signals whatever.......................

Monday, June 11, 2012

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

OI in Nifty futures still hovering around the 17-18 mill mark; prices have risen sharply and the critical level of 5092 has been broken on upside in today's open itself. Now as long as prices hold the crucial 5032 mark on closing basis, one may look to buy the dips from a trading perspective.

Nifty June futures coming close to parity / some premium [short-covering effect] whilst BankNifty futures are still trading at discount.

We need to bear in mind that just as the case was in Dec '11 / Jan '12, this is a liquidity / optimism fuelled rally than anything else [and will be the same all the way to 5944 on Nifty spot levels though it remains to be seen how much prices will continue to rally]

For BankNifty the 2 critical levels are 10200-250 and 9925-9950 levels; a close above 10200-10250 zone can take prices higher by another 150-200 points and a close below 9925-9950 levels can do a similar exercise downwards. Volatility can be expected to be higher over the next 10 to 12 weeks so trading requires one to be very alert and agile as most often than not, prices will be trending in either direction than grinding IMHO