Monday, September 10, 2012

Outlook For September 2012

As mentioned in the last post, I'm currently very much tied up in my professional engagements. Nevertheless, here is a recap of Nifty and BankNifty EOD charts

Nifty charts clearly indicating that 5408 is going to be a key hurdle. We already have had 2 consecutive closes above 5408 in the last 3 weeks that keeps the hopes of an upside alive. Should we get 2 consecutive closes above 5408 in Sep '12 series, then the Diwali rally should take us to 5740 odd levels where a top should form. This has been the outlook from the summer quarter and there is no change to that view.

Recap of Support / Resistance Levels on Nifty [EOD levels]

2 consecutive closes above 5408 invites a test of 5532 levels; we have this condition already satisfied but then profit-booking came in. Nifty has bounced back from 5225 on closing basis and this time if we get 2 consecutive closes above 5408, Nifty is near certain to achieve the Diwali '12 target of 5740. Difficult to go above 5740 despite all printing presses being active across the globe for monetary easing.

A close above 5740 will give bulls the chance to retest 5810-5944 zone. 1 close above 5944 is enough for bulls to make new highs but will it happen in 2012???? Very very remote

5169 on the downside remains a crucial make or break level for bulls and bears. A close below 5169 will invite a retest of 5032 [from where a strong bounce back came in Aug '12] and the same should be expected in the next leg of fall as well. If 5032 holds fort, then well and good, failing which 4800 retest is near certain.

Neither rises nor falls are linear [let us not forget that the fall from 6338 to 4531 took a good 13 months]

Critical Dates for Sep '12

22nd Sep '12 marks Fall Equinox and there should be some good swings around this date

As per charts of BankNifty, barring 2 throw-unders, it is pretty much within the wedge pattern that should give us a break-out or break-down around 17th Oct '12.

We have a lot of festivities with the nearest one being Ganesh Chathurthi. Let us hope that the festive cheer keeps us distracted from all the disturbing news vis a vis India scandals.

My next post will be in the last week of Sep '12 and for those obsessed with trading, the Support / Resistance levels given above should suffice. For day trades and jackpot trades, my seniors are taking care of the same. Good Luck to all of you.