EOD Analysis For 29th March 2012 and Outlook For 30th March 2012

OI in Nifty futures @ 38 million on open itself and then another 4 million added during the day [roll overs and premiums are quite healthy for April and May futures] VIX hovering around the 25 mark;

Critical levels and outlook remain unchanged for both Nifty and BankNifty; these corrections are very healthy for the market and dips should be used to buy on delivery basis i.e. investment purposes.

In all likelihood we are in the last leg of the corrective phase and a short term bottom can be expected to be formed around 200 DMA [5032-5092 band in worst case scenario] Only a close below 5032 will have to be observed carefully in terms of volumes and sectoral rotations; Since tomorrow is the last trading day and 1st day of April series, volumes will drop and it would be prudent to wait until Monday before taking fresh guard for April series trading.

Spring Equinox did not have much of an impact this year as compared to last year :( April will be quite volatile with upside bias in the first half and downside bias in the second half of the month [As usual, highly sensitive dates will be updated in tomorrow's post]

EOD Analysis For 28th March 2012 and Outlook For 29th March 2012

OI in Nifty futures @ open was about 34 million but soon came to 37 million within 2 hours. VIX hovering around the 25 level mark and there were some sectoral churns observed on stock specific basis.

Critical levels and outlook remain unchanged for both Nifty and BankNifty. Barring expiry whipsaws, we may see some lower volumes for the next 2 sessions as institutional fund houses will be looking to close the books for the fiscal year.

Starting 2nd April, volumes are expected to go down by about 20-25% and in all likelihood, the pending leg to the upside may begin [to be confirmed only after a close above 5348 and then 2 consecutive closes above 5408]

General Updates:

Rollar: Rollar is in a corrective bounce and seems unlikely to weaken beyond 52 levels; in the next leg of strengthening, it should be able to pierce through 48 with conviction to be confirmed after 2 consecutive closes below 50. By the end of this calendar year, we should be able to see Rollar well below 46.25 if not more IMHO

Dollar Index: Dollar Index is slated to go to 82-83 and falls will be arrested in the 78 zone in all likelihood

Gold: The fall of gold is hinting towards margin calls being triggered at hedge funds and upside seems capped at USD 1740 per ounce and should be able to find a bottom in the USD 1350-USD 1450 zone [at all dips below 1550 an ounce, one may add a few units in the portfolio through ETFs in a staggered manner to the extent its not excessively leveraged. After finding this bottom, gold in all likelihood will prepare for the next phase of upside to the north of USD 2200 / ounce [some experts are calling for 2200 before a correction but at least on the charts, it seems improbable though not impossible :D]

Silver: Upside in silver in all likelihood will be capped at USD 35-36 an ounce whilst a bottom in all likelihood will be formed in the USD 22-25 band. There are a lot of articles floating on the web talking about a paradigm shift in the way silver is valued and there will be a sudden meteoric rise in the price of silver etc etc etc; now hot money does flow into precious metals with money printing policies of fiat currencies but such a paradigm shift is very unlikely in the next couple of years at least IMHO. Debt monetization basically brings in a need to honor monetary commitments be it on the sovereign side or punters betting on fluctuations. Silver is a higher beta metal and has more industrial use - the way technologies are changing in this digital world, that paradigm shift is very unlikely! However, it is as useful as gold as a hedge against inflation and at sub-30 values per ounce, it remains a good buy in the portfolio [unfortunately, Im not aware as to whether we have Silver ETFs / MFs in India]

Euro-Zone Crisis: Unlike what is being published in the media, nothing has changed in the Euro-Zone and the crisis will come back to hit harder in the coming weeks/months once the election phase is done with in core Euro zone countries

EOD Analysis For 27th March 2012 and Outlook for 28th March 2012

OI in Nifty futures at 38 million in the first half of the day itself and VIX hovering around the 26 mark; 1 more session prior to expiry day and market seems to be generating opportunities/whipsaws depending on how one looks at it :D

Critical levels and outlook remain unchanged from yesterday for both Nifty and BankNifty

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

OI in Nifty futures hovering around 34 million on opening itself [37 million at close on expected lines as we move towards expiry] and rationalization on Nifty premiums continued today as well; BNF also had some strong corrections within the first 20 minutes of trade. 2 more days to go prior to expiry and such volatility will continue; fortunately VIX values in the morning were realistic for a change and compensated for the erroneous values last week IMHO.

Critical levels and outlook remain unchanged for both Nifty and BankNifty; to the extent 5150 holds out [worst case scenario 5032-5092 hold out, medium term trend is on the upside IMHO] However strength to be confirmed only after taking out 5348 [most important is 5408 for 2 consecutive sessions] Full throttle weakness with a close below 5032!!]

From an investment perspective, dips can be good buying opportunities especially in the infrastructure and banking themes. [IMHO best bets continue to be NiftyBees, BankBees, InfraBees for a major portion of the capital as they automatically capture at least the systemic risks - most of the experienced investors will advise the same thing and I am just following their footsteps.]

Last but not the least, an alternate price/time possibility with the condition for invalidation specified considering that normal Rate of Change for Nifty on EOD basis evens out to apprx 10 points per trading  day over a longer period of time

EOD Analysis for 23rd March 2012 and Outlook For 26th March 2012

Happy Gudi Paadava / Ugadi to all

OI in Nifty futures hovering around 37 million within first 2 hours of open today; IMHO with expiry 4 trading sessions away, we should be able to see more OI in Nifty futures regardless of direction taken by Nifty; significant rationalization on futures premium finally.

Most likely, falls will be arrested in the 5177-5196 band or a shade lower at 5150-5166 i.e. the 200 DMA [50 as well as 100 EMAs have crossed over the 200 DMA and hence whilst the ultra-short term trend is down, the medium term trend seems to be on the upside - this is important from an investment point of view!!]

Breach of 5177-5196 band on closing basis will take down the support to 5032-5092 band and IMHO this should be a heavy bounce back zone; a close below 5032 will most likely trigger more falls and this may not happen in the next couple of weeks. Strength in Nifty to be confirmed only after taking out 5348 and then 5408 [2 consecutive closes above 5408 is the key for Nifty IMHO]

Likewise for BNF, strength only after 2 consecutive closes above 10400; weakness with 2 consecutive closes below 10150; interestingly both Nifty and BNF are not confirming strength/weakness on either side; 1 close in either direction is a false alarm usually and we have seen quite a bit of that this week

Just some images that I had prepared last night to fill in for Raghuji [though Im not in a position to put counts on minute degrees - that will have to wait for him to resume full throttle action after his much deserved vacation :D]

Illustration1: This is a continuation of the same image that I have been using since 28th Feb

Illustration2: Nifty Moving Averages

EOD Analysis For 22nd March 2012 and Outlook For 23rd March 2012

OI in Nifty futures was 34 million on open itself and another 1 million added after Europe opened


Critical levels and outlook remain unchanged and it Nifty is not able to cross over the 5400 hurdle; in fact once 5325-5348 zone was breached on downside, it was a free fall; it will be interesting to see the price action tomorrow; to the extent 5177-5196 holds out on closing basis, bulls may stage a comeback;

BNF 10150 pounded once and if it happens for 2 consecutive sessions, expect another free fall of 200 odd points! The fall in BNF is alarming because it shaved off much more than what is reflected on the ticker from the highs of the day!!

EOD Analysis For 21st March 2012 and Outlook For 22nd March 2012

OI in Nifty futures was at 35 million in the morning session and both NF and BNFfutures trading at significant premium. Critical levels and outlook remain unchanged from yesterday's post.

As mentioned earlier as well, 21st March to 23rd March is a critical period and the trend set here usually lasts for 2 weeks. Rather than rushing into positions, one should slowly build positions as critical levels are taken out i.e. 5348-5408 so on and so forth.

[One can go through the blog archives of February 2012 where there are 2 specific posts on important dates for 2012 and Nifty Support/Resistance levels]