EOD Analysis For 29th June 2012 and Outlook For 2nd July 2012

OI in Nifty futures lower by about 25% compared to yesterday on expected lines; the weekly trend has been strong and today being the monthly close has also been strong. Critical levels and outlook remain unchanged for both Nifty and Banknifty

Recap

For Nifty: 5169-5177-5196 remains a critical congestion zone and closing above 5169 can yield 144 points in the same direction. The entire congestion zone was taken out at open today and as long as 5169 holds on closing basis, Nifty has steam to go up

5169 + 144 = 5313 and 5342 was where an interim double top was formed. So these are the immediate targets provided 5169 holds on closing basis

For BankNifty: 9900-9950 is the crucial band and as long as this holds, BNF may retest 10200 levels; [this has been achieved today] Closing above 10200 opens BNF for another 150-200 points to the upside; closing below 10200 and that invites a cut of another 150 odd points and likewise closing below 9000-9950 opens a further 150-200 point cut.

Illustrative Charts

As far as time is concerned, 1 round of rally is done from 20th June Summer Solastice [history repeated itself, albeit a bit slowly] Keeping that in mind, we should also remember that on 8th July '11, Nifty made an interim top of 5740, fell from there, went to 5740 in the first week of Aug '11 to 5702 only to collapse 1000 points from there by 26th Aug '11

377 days from 8th Jul '11 comes to 17th Jul '12. Whilst Daily / Weekly / Monthly closes are all strong today, I would advise caution for the period 16th Jul '12 to 20th Jul '12 as the odds of Nifty collapsing 150-200 points in that period from the highs

How can one double check the shorting opportunity apart from waves and trendlines?
Watch the behavior of July 54/5500 Puts - for instance this morning when Nifty was hovering around the 5240-5250 range, the July 5400 Put was only commanding a time value premium of 25 odd points [and stayed that way till the end]

Inference: Upside has steam

Look for frontline stocks that exhibit behavior Open = Low [or close to the Low]
Inference: Upside has steam :D :D

Readers are requested to remember that we are not here for spoon-feeding; we can only share our interpretations

EOD Analysis For 26th June 2012 and Outlook For 27th June 2012

First and foremost, I am enjoying my vacation in the country side with cousins and relatives with limited connectivity and hence not much updates on blogs for a week or so.

Readers may recall that we had clearly established the period from 20th June would be very exciting for trade with plenty of opportunities and an upward bias; we hope you made some profits out of the wonderful opportunities that came over the last 4 sessions

OI in Nifty futures has moved up to about 28 million with 2 sessions to June expiry

Critical levels remain unchanged for both Nifty and BankNifty

Recap:

Crucial Support Band for Nifty @ 5032-5092; closing below 5032 opens Nifty for some steeper cuts

Crucial Resistance Band for Nifty @ 5169-5177-5196; closing above 5169 opens Nifty for 5342 on upside

Likewise, for BankNifty, 9900-9950 band is critical; closing above this band keeps hopes alive for retest of 10200 and closing below this band opens 200-250 points on the downside

Images for reference

On a stock-specific basis, we had recommended Larsen for a long trade above 1275 and it now seems that the upside has given up; bears should wait for a close below 1335-1340 levels for initial targets of 1275-1300;

Likewise, Tata Motors can be weak below 220

Next Update: Most likely on Friday 29th June '12

As usual, safe traders may choose to take a small break for a couple of days and let the dust settle on expiry