Sunday, September 30, 2012

Weekly Outlook

  • Price Action
    • Open, High, Low and Close
      S&P CNX Nifty opened this week at 5691.95 (5631.75) made a higher high of 5735.15 (5720) , and made a higher low of 5638.65 (5534.9). It closed at 5703.3(5691.15) for the week. Volumes were about 48% higher than average.
  • Pivots, Moving Averages, Supports and Resistances
    • Extended Camarilla Pivots
      Supports are placed at 5694, 5686, 5677, 5650, 5638, 5628, 5607, 5568, 5532; while Resistances are placed at, 5712, 5721, 5730, 5756, 5769, 5778, 5800, 5838, 5875.
    • Moving Averages and Market Structure
      The Short term Moving Average is 5570; the Intermediate term moving average is 5170; and the long term moving average is 4970. The Structure of Overall Market is technically BULLISH .
    • Supports And Resistances
      Nifty would be range-bound if it trades between 5460 and 5670. while it would be trending up with a positive bias if it closes above 5600. The Overbought level is 5730 and Oversold level is 5400.
  • Trend and Momentum
    • Slope of Trend-line and Trend Strength
      The uptrend in the levels of S&P CNX Nifty is trying to maintain a slope of 52.5° for it's trend-line, as seen in stockcharts.com's non log charts. The ADX reading for the week is 12.87, coming off from all tine low of 9.48 registered for the week ending 7th Sept 2012.
    • Momentum Indicators and Oscillators
      The RSI(14) is at 66.74 slowly moving toward the Resistance zone of 70. The W%R 27 is at -3.30. MACD is running above 0 ahead of it's signal line. All in all the momentum indicators are bullish without a divergence as of now.
  • Volumes, Market Breadth,Turnover, Volatility and Open Interest
    • Aggregate Volumes and Averages
      The Volumes for this week were about 48% higher than average. This could either be due to surge in Institutional Activity or increased Intraday Trading, however the former seems more likely.
    • Volume Indicators and Oscillators
      The Volume indicators are slightly lagging and if a 4% correction takes place in coming weeks, which is not very unlikely, then in that case these might become confirmed divergences. The OBV hasn't surpassed it's previous swing high and MFI is coming off from 80+ levels. The CMF has registered a reading of +0.2.
    • Market Breadth
      Market Breadth was excellent at 1.56 as compared with 2.56 last week. On the back of good volumes, good market breadth, and Nifty broke out of previous high means we could have 5900 odd levels.
    • Volatility, VIX and ATR
      The True Range was merely 96 points. While ATR(14) is at 160 points. The VIX has registered a breakout, and is likely to breach 20 odd levels in coming weeks. VIX closed at 16.16 down 14% from last week.
    • Derivatives, Open Interest, and PCR ratio
      The Volumes in Derivatives were 63% higher than last week, on the back of heavy trading by Institutional desks. This indicates predictability of the trend. The Open Interest that was rising in a linear fashion during previous three weeks, has fallen by 7% this week. The PCR readings, have sort of diverged from the trend, with a ridiculously low level of .96 as compared to last weeks .98 This could indicate that Smart Money doesn't want to take a chance with writing puts. Bad Memories, I guess.
  • Inferences and Outlook
    • Nifty seems to be all set up to try 5900 in coming weeks. On the back of continuous buying by the FIIs, a more assertive Indian Government, which seemingly wants to focus on economic reforms and liberalization, it doesn't seem to be a big target. However, continuous selling by DIIs and the fact the Central Government doesn't have favorable numbers in the Parliament, makes a case for practicing caution.

Friday, September 28, 2012

EOD Analysis and Outlook

  • Price Action for 28-Sep-2012

    Nifty opened at 5684.8(5673.75), made a Higher high of 5735.15( 5693.7 was the previous high) and a Higher low of 5683.45(5639.7 was previous low), finally closing at 5703.3 (previous close was 5649.5). The Volumes were 16, 36, 60, 805(23, 89, 91, 690 ) - about 8% lower than average. Nifty closed 54 points higher than the previous close. It was a Higher bar day with average volumes. The last pattern completed was, "Three Inside Down" which sometimes has bearish connotations. Today Nifty closed in the Top Quartile of the True Range, while yesterday it closed in the Bottom Quartile of the True Range.
  • Moving Averages and Pivot Points

    The Short term average is 5670 while intermediate term is at 5360 and long term is 5190. Market Structure is technically Bullish. Supports are placed at 5694, 5686, 5677, 5650, 5638, 5628, 5607, 5568, 5532; while Resistances are placed at, 5712, 5721, 5730, 5756, 5769, 5778, 5800, 5838, 5875.
  • Futures

    The OI in futures is 2, 49, 82, 850(2, 30, 30, 150) (+13%) and Cost of Carry of the October series was 6%, while Open Interest went up by +14% . The November series Cost of Carry remain unchanged at 6% (6%) and Open Interest went up by +5% as compared to +33% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by 13%. Institutional Desks entered long positions, across the board.
  • Options

    In Options Segment, the open interest was 10,37,10,500 . The Highest Open Interest is in 6000 Strike Calls and this might define the upper cap of the October expiry range, for now. The largest change in Open Interest figures was noticed also in 6000 Strike Calls. As for Index Put Options the Highest Open Interest is in 5300 Strike Puts. The largest change was noticed in 5400 Strike Index Put Options.
  • Volatility

    Volatility is moving sideways as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. VIX closed at 16.16 a -4.4% decrease from yesterday . ATR was 64. It seems very unlikely that ATR would fall below 60 in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was excellent, even though Nifty moved 50 points toward North. The Advance-Decline Ratio was 1.56, as compared with 1.00 yesterday. Noted that the AD Ratio exhausts within three days of any breakout or breakdown!
  • Volumes

    Cash Volumes are slowly rising. Today Volumes were 8% Lower and Market Breadth was good. Money Flow Index now is at 68, with Class A Negative Divergence. The point to be noted is that it had crossed over to 70 without signalling any change in trend. While poor CMF also showed signs of life after dilly-dallying with 0 line at 0.03. Delivered Quantity to Traded Quantity was 49.32 while yesterday it was 49.04, on BSE, the readings have stabilized. While on NSE it was 26.23% while yesterday it was 35.57% . The sudden spurt in Delivered Quantity to Traded Quantity was on account of Short Covering. How did that happen, would be duly investigated.
  • US Dollar

    USD weakened against INR by about another 56p (based on RBI Reference Rate). Not much Change in Open Interest, and Open Interest at the End of the Day was 1993508 (19, 78, 690,) on NSE. This could safely be interpreted as expected in the light of bullishness in NIFTY.
  • Institutional Activity

    FII sponsored INDIA SHOPPING FESTIVAL is on. Buy anything and everything that comes your way. Stocks, Stocks' Derivatives, Interest Rate Derivatives, the list is endless. They have been BOLDLY buying at all levels . I would consider Nifty to be highly overbought at this level, but FIIs were net buyers for 1230.35 Crores. They were net Buyers for 1230.35 Crores in the October series (i.e., since 28th Sep 2012). They were net buyers in September series for 19,385.78. And they are net buyers for 72,884.92 Crores in this year. Whereas DIIs were net Sellers today for -679.06 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -679.06 Crores in current series. They were net Sellers for -8653.22 in the September series. Since 1st January 2012 they have sold for -37,431.32 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. DIIs are dressing up their books of accounts.

    FIIs have added to their long positions, there was an approximate 11% increase in their Open Positions. They were seen writing Index PUT Options, in October series. with their Open Interest in Options segment rose by +3.19%. Today they have added more short positions in Stock Futures, the change was at +4.56%. In Stock Options the FIIs were seen writing Options, arguably Calls and the change in Open Interest was 601.71%. "Write and Plunder"

  • Trend

    RSI rose to 72 odd level, with a ripe Class A Negative Divergence, whereas ADX increased to 36 from 35, VHF fell to 0.46 from 0.47 . With ADX crossing 35 and VHF at 45+, Nifty would have started blinking on the radars of Asia Pacific Funds. Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes. Nifty could form a short term top in coming sessions.
  • Outlook

    Nifty is trending up. Today volumes were about 8% lower than normal. Nifty closed 54 points higher than the previous close. Market breadth was good, and the breadth indicators are not enthusiastic about moving up. FIIs had a very good time in September Series, with good and easy profits. The Trend strength indicators are reaching for the top. The momentum indicators and volume indicators are treading in overbought zone, with Class A Negative Divergences, which imply that the Nifty is losing momentum. But it is all a part of plan, as it is expected that Nifty would correct at least 7 to 11 per cent, to accommodate Non Mauritius Based Funds! The current move could easily go up to 6000 odd levels. As was expected DIIs opened the faucets between 5725 - 5735, with 5735 as day high. On Monday, Nifty could open positive to flat , probably at least above 5678 and, it could test 5750 on the up. Nifty was in the midst of a correction due to DII's liquidating their positions around day high, and it is expected that the Bottom of this micro correction could be around 5670 .

"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5360) and 3 day Swing Low (5638), and sideways otherwise

Please read the Disclaimer. Thank You.

Thursday, September 27, 2012

EOD Analysis and Outlook

  • Price Action for 27-Sep-2012

    Nifty opened at 5673.75(5653.4), made a Higher high of 5693.7( 5672.8 was the previous high) and a Higher low of 5639.7(5638.65 was previous low), finally closing at 5649.5 (previous close was 5663.45). The Volumes were 23, 89, 91, 690 (17, 07, 71, 069) - about 33% Higher than average. Nifty closed 14 points lower than the previous close. It was a Higher bar day with high volumes. The last pattern completed was, "Three Inside Down" which sometimes has bearish connotations.
  • Moving Averages and Pivot Points

    The Short term average is 5645, while intermediate term is at 5350 and long term is 5180. Market Structure is technically Bullish. Supports are placed at 5674, 5657, 5640, 5589, 5565, 5547, 5506, 5432, 5362 while Resistances are placed at, 5708, 5725, 5742, 5793, 5817, 5835, 5876, 5950, 6021.
  • Futures

    The OI in futures is 2, 30, 30, 150(3, 30, 65, 400) (-36%) and Cost of Carry of the October series increased to 8%(7%), while Open Interest went up by +33% (+52%). The November series Cost of Carry remain unchanged at 6% (6%) and Open Interest went down by -87% as compared to +4% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went down by -36.2%. Institutional Desks carried forward only about 60% of their Open Positions into the next series.
  • Options

    In Options Segment, the open interest was 8, 24, 81, 450(15, 81, 28, 750) the Open Interest went down by about 48%. The Highest Open Interest is in 6000 Strike Calls and this might define the upper cap of the October expiry range, for now. The largest change in Open Interest figures was noticed also in 5700 Strike Calls. As for Index Put Options the Highest Open Interest is in 5300 Strike Puts. The largest change was noticed in 5300 Strike Index Put Options.
  • Volatility

    Volatility is moving sideways as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. VIX closed at 16.91 a -0.35% decrease from yesterday . ATR was 62. It seems very unlikely that ATR would fall below 60 in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was fair, even though Nifty moved sideways. The Advance-Decline Ratio was 1.0, as compared with 0.97 yesterday. Noted that the AD Ratio exhausts within three days of any breakout or breakdown!
  • Volumes

    Cash Volumes are slowly rising. Today Volumes were 33% Higher and Market Breadth was good. Money Flow Index now is at 66, with bullish signs. The point to be noted is that it had crossed over to 70 without signalling any change in trend. While poor CMF also showed signs of life after dilly-dallying with 0 line at 0.06. Delivered Quantity to Traded Quantity was 49.04 while yesterday it was 44.41, on BSE, the readings have stabilized. While on NSE it was 35.57% while yesterday it was 27.83%. This sudden spurt in DQTQ readings on NSE carry some meaning for which we would have to wait till tomorrow.
  • US Dollar

    USD weakened against INR by about another 32p (based on RBI Reference Rate). Change in Open Interest was not known , and Open Interest at the End of the Day was 19, 78, 690, on NSE, which is the lowest reading since 30th July 2012. This could safely be interpreted as expected in the light of bullishness in NIFTY.
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They have been BOLDLY buying at all levels . Today they were net buyers for 399.74 Crores. They were net Buyers for 19,385.78 Crores in the September series (i.e., since 31st Aug 2012). And they are net buyers for 71,654.57 Crores in this year. Whereas DIIs were net Sellers today for -447.87 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -8,653.22 Crores in current series. Since 1st January 2012 they have sold for -36,752.26 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. DIIs are dressing up their books of accounts.

    FIIs have squared off most of their short positions, with an average profit of 75 Points. The had been accumulating short positions at and around each Day's high in September series, ever since the nifty made a top of 5720, and accumulating long positions around each day's low in October series. They needed an expiry figure less than 5650 and they got it too. Now with Nifty slated to rise in coming sessions, they would again be targeting 75 points for profits. They were seen writing Index CALL Options and Put Options, in September series.

  • Trend

    RSI fell to 69 odd level, whereas ADX increased to 35 from 34, VHF remained unchanged at 0.47 from 0.47 . Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes. The divergences if any, would be decisive now.
  • Outlook

    Nifty is ready to blast. Today volumes were about 33% higher than normal. Nifty closed 14 points lower than the previous close. Market breadth was fair, and the breadth indicators are developing divergences with the trend, but that is also expected. FIIs had a very good time in September Series, with good and easy profits. The Trend strength indicators are reaching for the top. The momentum indicators are treading in overbought zone, with divergences, although divergences, especially negative, are a sign of uptrend. The current move could easily go up to 6000 odd levels. but looking at todays data it seems that tomorrow Nifty would have strong supplies at around 5725 -5735 levels. Tomorrow Nifty could open positive to gap up, probably at least above 5665 and day opening price could also be the day low, it could test 5725. IF it tests 5725 then it would also test 5710 afterwards, due to Institutional desks exiting their longs accumulated in last three sessions.

"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5350) and 3 day Swing Low (5638), and sideways otherwise Please read the Disclaimer. Thank You.

Expiry Day Scenario


Expiry between 5657 to 5674?

Wednesday, September 26, 2012

EOD Analysis and Outlook



  • Price Action for 26-Sep-2012

    Nifty opened at 5653.4(5674.9), made a Lower high of 5672.8( 5702.7 was the previous high) and a Lower low of 5638.65(5652.45 was previous low), finally closing at 5663.45 (previous close was 5673.9). The Volumes were 17, 07, 71, 069 (34, 13, 87, 116) - about 2% lower than average. Nifty closed 10 points lower than the previous close. It was a lower bar day with high volumes. Nifty has completed the Candlestick pattern, "Three Inside Down" which sometimes has bearish connotations.
  • Moving Averages and Pivot Points

    The Short term average is 5645, while intermediate term is at 5340 and long term is 5175. Market Structure is technically Bullish. Supports are placed at 5674, 5657, 5640, 5589, 5565, 5547, 5506, 5432, 5362 while Resistances are placed at, 5708, 5725, 5742, 5793, 5817, 5835, 5876, 5950, 6021.
  • Futures

    The OI in futures is 3, 30, 65, 400(3, 10, 20, 800) (+6.59%) and Cost of Carry of the September series increased to 41%(29%), while Open Interest went down by -19% (-11%). The October series Cost of Carry remain unchanged at 7% (7%) and Open Interest went up by 52% as compared to 77% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by +6.59%. Institutional Desks are accumulating Shorts around Day High and Longs around Day Low, with a long:short ratio of 59:41. Ao they expect Nifty to slip further down, before continuing with the trend.
  • Options

    In Options Segment, the open interest was 15, 81, 28, 750 (15, 29, 91, 250) the Open Interest went up by about 3.36%. The Highest Open Interest continues to be in 5700 Strike Calls and this might define the upper cap of the expiry range, for now. The largest change in Open Interest figures was noticed also in 5700 Strike Calls. As for Index Put Options the Highest Open Interest is in 5600 Strike Puts. The largest change was noticed in 5600 Strike Index Put Options. Instituitional Desks were seen writing both Calls and Options for the Current Series, and probably they were writing 5700 Calls and 5600 Puts. PCR fell to .97 from .99, although as a rule of thumb it should have crossed 1.3 by now. My Expiry guess -- 5640.
  • Volatility

    Volatility is moving sideways as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. VIX closed at 16.97 a -0.82% decrease from yesterday . ATR was 63. It seems very unlikely that ATR would fall below 60 in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was fair, even though Nifty moved sideways. The Advance-Decline Ratio was 0.97, as compared with 1.10 yesterday. Noted that the AD Ratio exhausts within three days of any breakout or breakdown!
  • Volumes

    Cash Volumes are slowly rising. Today Volumes were 2% lower and Market Breadth was good. Money Flow Index now is at 65, with bullish signs. The point to be noted is that it has crossed over to 70 without signalling any change in trend!!!!!!. While poor CMF also showed signs of life after dilly-dallying with 0 line at 0.07. Delivered Quantity to Traded Quantity was 44.41 while yesterday it was 47.81, on BSE, the readings have stabilized. While on NSE it was 27.83%, while yesterday it was 31.27%. There was some cooling off in the readings of DQTQ as compared to last few sessions.
  • US Dollar

    USD strengthened against INR by about another 4p (based on RBI Reference Rate). Change in Open Interest was 5.9 %, and Open Interest at the End of the Day was 24, 49, 209,(23, 12, 289) on NSE.
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They have been BOLDLY buying at all levels . Today they were net buyers for 688.49 Crores. They are net Buyers for 18,986.04 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 71,254.83 Crores in this year. Whereas DIIs were net Sellers today for -695.9 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -8,205.35 Crores in current series. Since 1st January 2012 they have sold for -36,304.39 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. DIIs are dressing up their books of accounts.


    FIIs were seen taking positions in both directions. My understanding is that they have been accumulating short positions at and around Day's high in Current series, and accumulating long positions around day's low in next series. Now if expiry level comes below 5650, they make handsome gains, with nifty rising on Friday, they again make handsome gains. They were seen writing Index CALL Options and Put Options, with their Open Interest in Options segment rose by 1.92%. Today they have built more short positions in Stock Futures, the change was at +2.38%. In Stock Options the FIIs were seen writng CALL options as well as PUT Options, which is very usual for a day before expiry.
  • Trend

    RSI fell to 70 odd level, whereas ADX increased to 34 from 32, VHF increased to 0.47 from 0.46 . Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes. The divergences if any, would be decisive now.
  • Outlook

    Nifty is ready to blast. Today volumes were about 2% lower than normal. Nifty closed 10 points lower than the previous close. Market breadth was fair, and the breadth indicators are developing divergences with the trend, but that is also expected. FIIs are having a hectic time, with their volumes in futures getting double of average. We would definitely see a lot of volatility tomorrow, with my guess for expiry at 5640. The Trend strength indicators are reaching for the top, although they are in no hurry to form a top. The momentum indicators are slowly inching toward overbought zone, with divergences, although divergences, especially negative, are a sign of uptrend. The current move could easily go up to 6500 odd levels. but looking at todays data it seems that expiry should be below 5700. Tomorrow Nifty could open flat to positive, and if it trades below 5655, in the first half hour, it could test 5641 and 5615 and on the up it could test 5670.
"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5340) and 3 day Swing Low (5638), and sideways otherwise Please read the Disclaimer. Thank You.

Tuesday, September 25, 2012

EOD Analysis and Outlook

  • Price Action for 25-Sep-2012

    Nifty opened at 5674.9(5691.95), made a Lower high of 5702.7( 5709.85 was the previous high) and a Lower low of 5652.45(5662.75 was previous low), finally closing at 5673.9 (previous close was 5669.6). The Volumes were 34, 13, 87, 116(21, 04, 19, 441) - about 95% higher than average. Nifty closed 4 points higher than the previous close. It was a lower bar day with high volumes.
  • Moving Averages and Pivot Points

    The Short term average is 5640, while intermediate term is at 5330 and long term is 5175. Market Structure is technically Bullish. Supports are placed at 5674, 5657, 5640, 5589, 5565, 5547, 5506, 5432, 5362 while Resistances are placed at, 5708, 5725, 5742, 5793, 5817, 5835, 5876, 5950, 6021.
  • Futures

    The OI in futures is 3, 10, 20, 800(2, 86, 43, 150) (+8.3%) and Cost of Carry of the September series increased to 29%(26%), while Open Interest went down by -11% (-3%). The October series Cost of Carry remain unchanged at 7% (7%) and Open Interest went up by 77% as compared to 53% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by +8.3%. Institutional Desks seems to have covered ALL their Shorts in the September series and gone long, again in subsequent series.
  • Options

    In Options Segment, the open interest was 15, 29, 91, 250(15, 29, 72, 800) the Open Interest went up by about 0.01%. The Highest Open Interest continues to be in 5700 Strike Calls and this might define the upper cap of the expiry range, for now. The largest change in Open Interest figures was noticed also in 5700 Strike Calls. As for Index Put Options the Highest Open Interest is in 5500 Strike Puts. The largest change was noticed in 5700 Strike Index Put Options. There were significant additions in 6000 and above Strike Calls for November series. PCR fell to .99 from 1, although as a rule of thumb it should have crossed 1.3 by now.
  • Volatility

    Volatility is going up as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. VIX closed at 17.11 a -1.72% decrease from yesterday . ATR was 65. It seems very unlikely that ATR would fall below 60 in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was fair, even though Nifty moved sideways. The Advance-Decline Ratio was 1.10, as compared with 1.52 yesterday. Noted that the AD Ratio exhausts within three days of any breakout or breakdown!
  • Volumes

    Cash Volumes are slowly rising. Today Volumes were 95% higher and Market Breadth was good. Money Flow Index now is at 71. The point to be noted is that it has crossed over to 70 without signalling any change in trend!!!!!!. While poor CMF also showed signs of life after dilly-dallying with 0 line at 0.05. Delivered Quantity to Traded Quantity was 47.81, while yesterday it was 46.02, on BSE, the readings have stabilized. While on NSE it was 31.27%, while yesterday it was 24.57%%. NSE DQTQ readings suggest people are buying whatever they can.
  • US Dollar

    USD strengthened against INR by about another 24p (based on RBI Reference Rate). Change in Open Interest was 0.5%, and Open Interest at the End of the Day was 23, 12, 289(23, 00, 887) on NSE. With this kind of data it seems USDINR might breach 50 level very soon!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They have been BOLDLY buying at all levels . Today they were net buyers for 5845.58 Crores. They are net Buyers for 18,297.55 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 70,566.34 Crores in this year. Whereas DIIs were net Sellers today for -1374.11 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -7509.45 Crores in current series. Since 1st January 2012 they have sold for -35,608.49 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. DIIs are dressing up their books of accounts.


    FIIs were seen unwinding their short positions(!) in current as well as October series, and building outright long positions in October Series in Index Futures, and their Open Interest rose by whopping 16.04%. They were seen unwinding Index CALL Options with their Open Interest in Options segment fell by -1.34%, perhaps they they were unwinding 5700 CALLS. Today they have built more long positions (Changing Counters) in Stock Futures, the change was at 3.92%. In Stock Options the FIIs were seen unwinding CALL options, although marginally with an decrease in Open Interest by about 3.68% today.
  • Trend

    RSI fell to 72 odd level, whereas ADX increased to 32 from 31, VHF increased to 0.46 from 0.45 . Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes. The divergences if any, would have no meaning with these kinds of readings.


  • Outlook

    Nifty is ready to blast. Today volumes were about 95% higher than normal. Nifty closed 4 points Higher than the previous close. Market breadth was good, and the breadth indicators are developing divergences with the trend, but that is also expected. FIIs are having a hectic time, with their volumes in futures getting double of average. We would definitely see a lot of volatility in the coming sessions. The Trend strength indicators are reaching for the top, although they are in no hurry to form a top. The momentum indicators are slowly inching toward overbought zone, with divergences, and these divergences would carry no meaning unless, the directional indicators and trend strength indicators diverge. The current move could easily go up to 6500 odd levels. but looking at todays data it seems that expiry could be below 5700. Tomorrow Nifty could open flat to negative, and toward the latter half it could test 5720 odd levels. Nifty is within a range of 5652 to 5720, it was second inside day with respect to Friday's range, so probably tomorrow we could see some ice breaking. All in all Nifty is extremely Bullish as of now.


"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5330) and 3 day Swing Low (5575), and sideways otherwise Please read the Disclaimer. Thank You.

Monday, September 24, 2012

EOD Analysis and Outlook

  • Price Action for 24-Sep-2012

    Nifty opened at 5691.95(5577), made a Lower high of 5709.85( 5720 was the previous high) and a Higher low of 5662.75(5575.45 was previous low), finally closing at 5669.6 (previous close was 5691.15 ). The Volumes were 21, 04, 19, 441 - about 31% higher than average. Nifty closed 21 points lower than the previous close. It was an inside day with high volumes.
  • Moving Averages and Pivot Points

    The Short term average is 5620, while intermediate term is at 5325 and long term is 5165. Market Structure is technically Bullish. Supports are placed at 5674, 5657, 5640, 5589, 5565, 5547, 5506, 5432, 5362 while Resistances are placed at, 5708, 5725, 5742, 5793, 5817, 5835, 5876, 5950, 6021.
  • Futures

    The OI in futures is 2, 86, 43, 150(2, 69, 08, 900) (+6.44%) and Cost of Carry of the September series increased to 26%(17%), while Open Interest went down by -3% (1%). The October series Cost of Carry remain unchanged at 7% (7%) and Open Interest went up by 53% as compared to 54% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by +6.44%. Institutional Desks seems to have covered ALL their longs in the October series and gone short, again in subsequent series.
  • Options

    In Options Segment, the open interest was 15, 29, 72, 800(15, 08, 98, 950) the Open Interest went up by about 1.37%. The Highest Open Interest continues to be in 5700 Strike Calls and this might define the upper cap of the expiry range, for now. The largest change in Open Interest figures was noticed also in 5700 Strike Calls. As for Index Put Options the Highest Open Interest is in 5500 Strike Puts. The largest change was noticed in 5600 Strike Index Put Options. There were significant additions in 6000 and above Strike Calls for November series. PCR rose to 1 (unity) from 0.95, although as a rule of thumb it should have crossed 1.3 by now.
  • Volatility

    Volatility is going up as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. VIX closed at 18.83 a 0.1% increase from yesterday and second highest value since 1st July 2012. ATR shot up to 66, registering second highest reading since 1st of August 2012. It seems very unlikely that ATR would fall in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was good, as expected. The Advance-Decline Ratio was 1.52, as compared with 2.3 yesterday. The AD Ratio goes through the roof on breakouts, and this time it's blasted the chandelier too, or so it seems. Noted that the AD Ratio exhausts within three days of any breakout or breakdown!
  • Volumes

    Cash Volumes are slowly rising. Today Volumes were 31% higher and Market Breadth was good. Money Flow Index finally - finally crossed 70 level and now is at 79, a move that was long awaited. The point to be noted is that it has crossed over to 70 without signalling any change in trend!!!!!!. While poor CMF also showed signs of life after dilly-dallying with 0 line at 0.04. Delivered Quantity to Traded Quantity was 46.02, while yesterday it was 46.31, on BSE, the readings have stabilized. While on NSE it was 24.57%, while yesterday it was 24.95%%. DQTQ readings suggest of an aversion to take deliveries at this stage amongst traders and "commercials".
  • US Dollar

    USD weakened against INR by about another 62p (based on RBI Reference Rate). Change in Open Interest was -6.7%, and Open Interest at the End of the Day was 23, 00, 887(24, 65, 810) on NSE. Yesterday it was observed, I guess and this is purely a guess that these guys are going long in USD. USDINR pair has convincingly breached 55.15, on the back of some very heavy volumes! ", so they were actually covering the shorts!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They have been BOLDLY buying at all levels . Today they were net buyers for 1595.72 Crores. They are net Buyers for 12,451.97 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 64,720.76 Crores in this year. Whereas DIIs were net Sellers today for -1156.45 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -6135.34 Crores in current series. Since 1st January 2012 they have sold for -34,234.38 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. So probably DIIs are looking to buy at lower levels than currently prevailing levels. Perhaps they are getting ready for the impending Correction.

    FIIs were seen unwinding their long and short positions(!) in current as well as October series, and building short positions in October Series in Index Futures, and their Open Interest rose by whopping 14.04%. They were seen unwinding Index PUT Options with their Open Interest in Options segment fell 0.66, perhaps they they were unwinding 5600 puts. Today they have built more short positions in Stock Futures, the change was at 2.22%. In Stock Options the FIIs were seen unwinding PUT options, although marginally with an decrease in Open Interest by about 3.39% today.
  • Trend

    RSI fell to 72 odd level, whereas ADX increased to 31 from 29, VHF increased to 0.45 from 0.46 . Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes.


  • Outlook

    Nifty is mildly trending up. Today volumes were about 31% higher than normal. Nifty closed 21 points Lower than the previous close. Market breadth was good, but the breadth indicators are developing divergences with the trend, but that is also expected. FIIs are having a hectic time, with their volumes in futures getting double of average. We would definitely see a lot of volatility in the coming sessions. The Trend strength indicators have formed some kind of bottom, moving away from their recent low values, although they are in no hurry to form a top. The momentum indicators are slowly inching toward overbought zone, with divergences. The current move could easily go up to 5920 odd levels. but looking at todays data it seems that expiry could be below 5700. Tomorrow Nifty could gap up around 5690 - 5700, and toward the latter half it could test 5620 odd levels. If todays high of 5710 is not breached and if Nifty falls to 5620, it would be a good time to take long (yes Long) positions in Futures, with proper money management.


"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5325) and 3 day Swing Low (5535), and sideways otherwise Please read the Disclaimer. Thank You.

Sunday, September 23, 2012

Weekly Outlook



  • Price Action
    • Open, High, Low and Close
      S&P CNX Nifty opened this week at 5631.75 (5361.9) made a higher high of 5720 (5586.65) on Saturday, and made a higher low of 5534.9 (5332.1). It closed at 5691.15 (5577.65) for the week. Volumes were about 21% higher than average. This is the highest weekly closing since 2 MAY 2011.
  • Pivots, Moving Averages, Supports and Resistances
    • Extended Camarilla Pivots
      Supports are placed at 5674, 5657, 5640, 5589, 5565, 5547, 5506, 5432, 5362, while Resistances are placed at, 5708, 5725, 5742, 5793, 5817, 5835, 5876, 5950, 6021.
    • Moving Averages and Market Structure
      The Short term Moving Average is 5500; the Intermediate term moving average is 5160; and the long term moving average is 4955. The Structure of Overall Market is technically BULLISH .
    • Supports And Resistances
      Nifty would be range-bound if it trades between 5400 and 5600. while it would be trending up with a positive bias if it closes above 5600. The Overbought level is 5670 and Oversold level is 5330.
  • Trend and Momentum
    • Slope of Trendline and Trend Strength
      Nifty is trying to maintain a slope of 45° for it's trendline, as seen in icharts.in's non log charts. The ADX reading for the week is 11.58, coming off from all tine low of 9.48 registered for the week ending 7th Sep 2012.
    • Momentum Indicators and Oscillators
      The RSI(14) is at 66.42 slowly moving toward the Resistance zone of 70. The W%R 27 is at -3.04. MACD is running above 0 ahead of it's signal line. All in all the momentum indicators are bullish without a divergence as of now.
  • Volumes, Market Breadth,Turnover, Volatility and Open Interest
    • Aggregate Volumes and Averages
      The Volumes for this week were about 21% higher than average, and it was just a 4 day week. This could either be due to surge in Institutional Activity or increased Intraday Trading, however the former seems more likely.
    • Volume Indicators and Oscillators
      The Volume indicators are slightly lagging and if a 4% correction takes place in coming weeks, which is not very unlikely, then in that case these might become confirmed divergences. The OBV hasn't surpassed it's previous swing high and MFI is coming off from 80+ levels. The CMF has registered a reading of +0.14.
    • Market Breadth
      Market Breadth was excellent at 2.26 as compared with 1.19 last week. On the back of good volumes, good market breadth, and Nifty broke out of previous high means we could have 5900 odd levels on the ticker very soon.
    • Volatility, VIX and ATR
      The True Range was merely 185 points. While ATR(14) is at 168 points. The VIX has registered a breakout, and is likely to breach 20 odd levels in coming weeks. VIX closed at 18.93.
    • Derivatives, Open Interest, and PCR ratio
      The Volumes in Derivatives were 44% higher than last week, although it was just a 4 day week. This indicates predictability of the trend. The Open Interest has risen in a linear fashion in last three weeks. The PCR readings, have sort of diverged from the trend, with a ridiculously low level of .98 as compared to last weeks 1.02. This could indicate that Smart Money doesn't want to take a chance with writing puts. Bad Memories, I guess.
  • Inferences and Outlook
    • Nifty seems to be all set up to try 5900 in coming weeks. On the back of continuous buying by the FIIs, a more assertive Indian Government, which seemingly wants to focus on economic reforms and liberalisation, it doesn't seem to be a big target. However, continuous selling by DIIs and the fact the Central Government doesn't have favourable numbers in the Parliament, makes a case for practising caution.

Friday, September 21, 2012

EOD Analysis and Outlook


  • Closing Data for 21-Sep-2012

    Nifty opened at 5577, made a Higher high of 5720( 5581.35 was the previous high) and a Higher low of 5575.45(5534.9 was previous low), finally closing at 5691.15 (previous close was 5554.25 ). The Volumes were 27, 80, 23, 825 - about 79% higher than average. Nifty closed 137 points Higher than the previous close.
  • Moving Averages and Pivot Points

    The Short term average is 5590, while intermediate term is at 5315 and long term is 5165. Market Structure is technically Bullish. Supports are placed at 5674, 5657, 5640, 5589, 5565, 5547, 5506, 5432, 5362 while Resistances are placed at, 5708, 5725, 5742, 5793, 5817, 5835, 5876, 5950, 6021.
  • Futures

    The OI in futures is 2, 69, 08, 900(2, 51, 79, 800) (+6.87%) and Cost of Carry of the September series increased to 17%(16%), while Open Interest went up by 1% (1%). The October series Cost of Carry decreased to 7% (8%) and Open Interest went up by 54% as compared to 6% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by +6.87%. Institutional Desks seems to have covered their longs in the October series and gone short, again.
  • Options

    In Options Segment, the open interest was 15, 08, 98, 950(14, 25, 03, 450) the Open Interest went up by about 5.89%. The Highest Open Interest continues to be in 5700 Strike Calls and this might define the upper cap of the expiry range, for now. The largest change in Open Interest figures was noticed also in 5900 Strike Calls. As for Index Put Options the Highest Open Interest is in 5500 Strike Puts. The largest change was noticed in 5700 Strike Index Put Options. There was good addition in Open Interest of 5600 Puts in October series of about 62%. PCR fell to 0.95 from 1.17, although as a rule of thumb it should have crossed 1.3 by now. It seems like this is the 5th Minute Elliott Wave of the C minor Elliott Wave.
  • Volatility

    Volatility is going up as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. VIX closed at 18.93 a 1.66% increase from yesterday and highest value since 1st July 2012. ATR shot up to 60, registering highest reading since 1st of August 2012. It seems very unlikely that ATR would fall in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was excellent, as expected. The Advance-Decline Ratio was 2.3, as compared with .53 yesterday. The AD Ratio goes through the roof on breakouts, and this time it's blasted the chandelier too, or so it seems. Noted that the AD Ratio exhausts within three days of any breakout or breakdown!
  • Volumes

    Cash Volumes are slowly rising. Today Volumes were 79% higher and Market Breadth was excellent. Money Flow Index finally - finally crossed 70, a move that was long awaited. The point to be noted is that it has crossed over to 70 without signalling any change in trend!!!!!!. While poor CMF also showed signs of life after dilly-dallying with 0 line at 0.09. Delivered Quantity to Traded Quantity was 46.31, while yesterday it was 46.59, on BSE, which is a normal value!!! While on NSE it was 24.95%, while yesterday it was 28.99%. DQTQ readings suggest of an aversion to take deliveries at this stage amongst traders and "commercials".
  • US Dollar

    USD weakened against INR by about t another 43p (based on RBI Reference Rate). Change in Open Interest was +6.8%, and Open Interest at the End of the Day was 24, 65, 810(23, 08, 515) on NSE. I guess and this is purely a guess that these guys are going long in USD. USDINR pair has convincingly breached 55.15, on the back of some very heavy volumes!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They have been BOLDLY buying at all levels . Today they were net buyers for 2327.82 Crores. They are net Buyers for 10,856.25 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 63,125.04 Crores in this year. Whereas DIIs were net Sellers today for -1127.28 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -4978.89 Crores in current series. Since 1st January 2012 they have sold for -33,077.93 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. So probably DIIs are looking to buy at lower levels than currently prevailing levels. Perhaps they are getting ready for the impending Correction.

    FIIs were seen covering their long positions in current as well as October series, and building short positions in October Series in Index Futures, and their Open Interest rose by 6.11%. They were seen writing Index Options with their Open Interest in Options segment rose by 6.46%, perhaps they have writing 5700 Calls again. Today they have built some short positions in Stock Futures, the change was at 2.24%. In Stock Options the FIIs are briskly writing options, as if it is a plundering opportunity, with an increase in Open Interest by about 13.31% today. Most Probably they are writing Stock covered call Options for now.
  • Trend

    RSI has risen to 75 odd level, whereas ADX increased to 29 from 27, VHF increased to 0.46 from 0.43 . Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes.


  • Outlook

    Nifty is mildly trending up. Today volumes were about 79% higher than normal. Nifty closed 137 points Higher than the previous close. Market breadth was EXCELLENT, but the breadth indicators are developing divergences with the trend, but that is also expected. FIIs have started adding to their short positions in October Series. We would see a lot of volatility in the coming sessions. The Trend strength indicators have formed some kind of bottom, moving away from their recent low values, although they are in no hurry to form a top. The momentum indicators are slowly inching toward overbought zone, with divergences. The current move could easily go up to 5920 odd levels. but looking at todays data it seems that expiry could be below 5700.

"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5315) and 3 day Swing Low (5535), and sideways otherwise. Thank You.

Thursday, September 20, 2012

EOD Analysis and Outlook


  • Closing Data for 20-Sep-2012

    Nifty opened at 5536.95 , made a lower high of 5581.35 ( 5620.55 was the previous high) and a lower low of 5534.9(5586.45 was previous low), finally closing at 5554.25 (previous close was 5600.05 ). Volumes were about 14% higher than average. Nifty closed 46 points lower than the previous close. The Volumes were 16, 56, 84, 942.
  • Moving Averages and Pivot Points

    The Short term average is 5545, while intermediate term is at 5310 and long term is 5160. Market Structure is technically Bullish. Supports are placed at 5554, 5531, 5508, 5438, 5405, 5380, 5323, 5221, 5125. Resistances are placed at, 5601, 5624, 5648, 5718, 5751, 5776, 5832, 5934, 6031.
  • Futures

    The OI in futures is 2, 51, 79, 800(2, 46, 97, 650) (+1.95%) and Cost of Carry of the September series increased to 16%(9%), while Open Interest went up by 1% (5%). The October series Cost of Carry increased to 8% (6%) and Open Interest went up by 6% as compared to 11% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by +1.95%. Institutional Desks seems to have covered their shorts in the current series and gone long in the October Series.
  • Options

    In Options Segment, the open interest was 14, 25, 03, 450(14, 23, 19, 100) the Open Interest went up by about 0.13%. The Highest Open Interest continues to be in 5700 Strike Calls and this might define the upper cap of the current range, for now. The largest change in Open Interest figures was noticed also in 5600 Strike Calls. As for Index Put Options the Highest Open Interest is in 5300 Strike Puts. The largest change was noticed in 5500 Strike Index Put Options. There was good addition in Open Interest of 5400 Puts in October series. PCR rose to 1.17 from 1.08, although as a rule of thumb it should have crossed 1.3 by now. It seems people are taking this blog seriously, and acting what I had been asking them to do...write puts...and they have obliged! Remember this blog is for entertainment purposes only.
  • Volatility

    Volatility is going up as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. VIX closed at 18.62 a 5% increase from yesterday. ATR is again keeping below 60. This might indicate that ATR could move sideways in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was poor, as expected. The Advance-Decline Ratio was .53, as compared with 1.6 yesterday. The AD Ratio goes through the roof on breakouts, but this time it's stuck in chandelier, or so it seems. Noted that the AD Ratio exhausts within three days of any breakout or breakdown!
  • Volumes

    Cash Volumes are slowly rising. Today Volumes were 14% higher but Market Breadth was poor. Money Flow Index remained unchanged at 65, surprisingly still below 70 although taking 60 with ease. It has not signalled a bullish reversal as yet!!!. While CMF is dilly-dallying with 0 line at 0.035. Delivered Quantity to Traded Quantity was 46.59, while yesterday it was 44.66, on BSE, which is a normal value!!! While on NSE it was 28.99%, while yesterday it was 31.52%. DQTQ readings are slowly rising , suggesting delivery based trading.
  • US Dollar

    USD strengthened against INR by about another 8p (based on RBI Reference Rate). Change in Open Interest was -1.1%, and Open Interest at the End of the Day was 23, 08, 515(23, 28, 261) on NSE. USDINR pair has convincingly breached 55.15, on the back of some very heavy volumes!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They have been boldly buying at all levels. Today they were net sellers for -73.67 Crores. They are net Buyers for 8528.43 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 60, 797.22 Crores in this year. Whereas DIIs were net Sellers today for -331.11 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -3851.61 Crores in current series. Since 1st January 2012 they have sold for -31, 950.65 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. So probably DIIs are looking to buy at lower levels than currently prevailing levels. Perhaps they are getting ready for the impending Correction.

    FIIs were seen covering their short positions in current series, and building long positions in October Series in Index Futures, and their Open Interest rose by 5.27%. They were seen exiting Index Options with their Open Interest in Options segment fell by -1.23%, perhaps they have unwinded their 5700 Index Calls. Today they have built some short positions in Stock Futures, the change was at .53%. In Stock Options the FIIs are briskly writing options, as if it is a plundering opportunity, with an increase in Open Interest by about 3.74% today. Most Probably they are writing Stock Put Options for now.
  • Trend

    RSI has fallen to 68 odd level, whereas ADX increased to 27.22 from 26.14, VHF decreased to 0.43 from 0.46 . Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes.


  • Outlook

    Nifty is mildly trending up. Between 5300 and 5500 Nifty would continue to trade without a distinct trend (sideways). Today volumes were about 14% higher than normal. Nifty closed 46 points lower than the previous close. Market breadth was poor, but that was expected. FIIs have started adding to their long positions in October Series. Sooner than later, Nifty should start to trend up again. The Trend strength indicators have formed some kind of bottom, moving away from their recent low values, although they are in no hurry to form a top. Nifty could trade between 5531 to 5624 on Friday.







"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5310) and 3 day Swing Low (5535), and sideways otherwise

Click Here to read the Disclaimer. Thank You.

Tuesday, September 18, 2012

EOD Analysis and Outlook


  • Closing Data for 18-Sep-2012

    Nifty opened at 5602.4 , made a lower high of 5620.55 ( 5652.2 was the previous high) and a higher low of 5586.45(5585.15 was previous low), finally closing at 5600.05 (previous close was 5610 ). Volumes were about 22% higher than average. Nifty closed 10 points lower than the previous close. It was an inside day with a doji. Such a candlestick patterns generally occur during the midway of a trend, before a holiday or a weekend.
  • Moving Averages and Pivot Points

    The Short term average is 5540, while intermediate term is at 5300 and long term is 5160. Market Structure is technically Bullish. Supports are placed at 5554, 5531, 5508, 5438, 5405, 5380, 5323, 5221, 5125. Resistances are placed at, 5601, 5624, 5648, 5718, 5751, 5776, 5832, 5934, 6031.
  • Futures

    The OI in futures is 2,46,97,650(2,40,04,200) (+2.89%) and Cost of Carry of the September series increased to 9%(4%), while Open Interest went up by 2% (5%). The October series Cost of Carry increased to 6% (5%) and Open Interest went up by 11% as compared to 5% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by +2.89%. Getting ready for the continuation of the trend.
  • Options

    In Options Segment, the open interest was 14,23,19,100(14,06,32,950) the Open Interest went up by about 1.2%. The Highest Open Interest continues to be in 5700 Strike Calls and this might define the upper cap of the current range, for now. The largest change in Open Interest figures was noticed also in 5700 Strike Calls. As for Index Put Options the Highest Open Interest is in 5300 Strike Puts. The largest change was noticed in 5500 Strike Index Put Options. There was good unwinding in 5600 calls in current series, yesterday. PCR rose to 1.08 from 0.94, although as a rule of thumb it should have crossed 1.3 by now. Strange - nobody wants to write puts!
  • Volatility

    Volatility is going up as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. ATR again fell below 60, although, and if it doesn't maintain a reading above 60, it may fall down again . This might indicate that ATR could move sideways in coming sessions. To overgeneralize, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate or Primary degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was very good. The Advance-Decline Ratio was 1.6, as compared with 1.45 yesterday. The AD Ratio goes through the roof on breakouts, but this time it's stuck in chandelier, or so it seems. Noted that the AD Ratio exhausts within three days of any breakout or breakdown! Poor me had been writing this for the entire last week ,"Nifty is on a verge of a breakout, and if it closes above 5479 in the coming sessions then we would see 5600 on the board pretty soon." Koi Shak?
  • Volumes

    Cash Volumes had been drying up lately. But today and yesterday were exceptions. Today Volumes were 22% higher and Market Breadth was also good. Money Flow Index jumped to 65.20 from 63.88, surprisingly still below 70 although taking 60 with ease. It has not signaled a bullish reversal as yet!!!. While CMF is dilly-dallying with 0 line at 0.043. Delivered Quantity to Traded Quantity was 44.66, while yesterday it was 48.50, on BSE, which is a normal value!!! While on NSE it was 31.52%, while yesterday it was 30.53%. DQTQ readings are slowly rising , suggesting delivery based trading.
  • US Dollar

    USD strengthened against INR by about another 28p. Change in Open Interest was -1.1%, and Open Interest at the End of the Day was 23,28,261(23,53,903) on NSE. USDINR pair has convincingly breached 55.15, on the back of some very heavy volumes!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They are boldly buying at all levels. Today they were net buyers for 1049.17 Crores. They are net Buyers for 8602.1 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 60,870.89 Crores in this year. Whereas DIIs were net Sellers today for -670.72 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -3520.5 Crores in current series. Since 1st January 2012 they have sold for -31,619.54 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. So probably DIIs are looking to buy at lower levels than currently prevailing levels. Perhaps they are getting ready for the impending Correction.

    FIIs were seen building their long positions in Index Futures, once again, and their Open Interest rose by 3.95%. They were seen exiting Index Options with their Open Interest in Options segment fell by 0.83%. Today they have built some short positions in Stock Futures, the change was at 2.30%. In Stock Options the FIIs are briskly writing options, as if it is a plundering opportunity, with an increase in Open Interest by about 4.70% today(and it was a plundering opportunity). Most Probably they are writing Stock Put Options for now.
  • Trend

    RSI is stuck at 74 odd level, whereas ADX increased to 26.14 from 23.64, VHF increased to 0.46 from 0.43 . Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than average volumes.


  • Outlook

    Nifty is mildly trending up. Between 5300 and 5500 Nifty would continue to trade without a distinct trend (sideways). Today volumes were about 22% higher than normal. Nifty closed 10 points lower than the previous close. Market breadth was good. Sooner than later, Nifty should start to trend up again. The Trend strength indicators have formed some kind of bottom, moving away from their recent low values, although they are in no hurry. Nifty could trade between 5648 to 5508 on Thursday.






"According to Elliott Wave theory, Nifty is in [3rd Minute Wave] of the {C Minor Wave} of (B Intermediate Wave) of the [4th Primary Wave] of {1st Cycle Wave} of (1st Super Cycle Wave) of (1st Grand Super Cycle Wave)". Nifty would be bullish if it is above the Intermediate Term Average (5300) and 3 day Swing Low (5526), and sideways otherwise

Click Here to read the Disclaimer. Thank You.

Monday, September 17, 2012

EOD Analysis and Outlook


  • Closing Data for 17-Sep-2012

    Nifty opened at 5631.75 (GAPPED) , made a higher high of 5652.2 ( 5586.65 was the previous high) and a higher low of 5585.15(5526.95 was previous low), finally closing at 5610 (previous close was 5577.65 ). Volumes were about 83% higher than average. Nifty closed 32.35 points higher than the previous close.
  • Moving Averages and Pivot Points

    The Short term average is 5510, while intermediate term is at 5300 and long term is 5150. Market Structure is technically Bullish. Supports are placed at 5554, 5531, 5508, 5438, 5405, 5380, 5323, 5221, 5125. Resistances are placed at, 5601, 5624, 5648, 5718, 5751, 5776, 5832, 5934, 6031.
  • Futures

    The OI in futures is 2,40,04,200(2,27,72,250) (+5.41%) and Cost of Carry of the September series remained unchanged at 4%, while Open Interest went up by 5%. The October series Cost of Carry remain unchanged at 5% and Open Interest went up by 5% as compared to 30% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by 5.41%%. Seems like market participants are divided about the next move.
  • Options

    In Options Segment, the open interest was 14,06,32,950(13,48,55,550) the Open Interest went up by about 4.28%. The Highest Open Interest continues to be in 5700 Strike Calls and this might define the upper cap of the current range. The largest change in Open Interest figures was noticed also in 5700 Strike Calls. As for Index Put Options the Highest Open Interest is in 5300 Strike Puts. The largest change was noticed in 5600 Strike Index Put Options. There was good unwinding in 5600 calls in current series. PCR fell to 0.94 from 1.02, although as a rule of thumb it should have gone up. Strange - nobody wants to write puts! Imagine what the matinee idol Dilip Kumar would have said, like he did in the movie Mashaal, "arey koi hai... jo puts likh de?". I remember the ancient curse, "May you live interesting times", and so here we are...This view is based on observing the Options Derivatives of the current, mid and far series.
  • Volatility

    Volatility shot up as per expectations. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. ATR touched 60 today, but if it doesn't maintain a reading above 60, it may fall down again . This might indicate that ATR could move sideways in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate or Primary degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth was very good. The Advance-Decline Ratio was 1.45, as compared with 1.18 yesterday. The AD Ratio goes through the roof on breakouts, but this time it's stuck in chandelier, or so it seems. Noted that the AD Ratio exhausts within three days of any breakout or breakdown! Poor me had been writing this for the entire last week ,"Nifty is on a verge of a breakout, and if it closes above 5479 in the coming sessions then we would see 5600 on the board pretty soon." Koi Shak?
  • Volumes

    Cash Volumes had been drying up lately. But today and yesterday were exceptions. Today Volumes were 83% higher and Market Breadth was also good. Money Flow Index jumped to 63.88 from 53.43, surprisingly still below 70 although taking 60 with ease. It has not signalled a bullish reversal as yet!!!. While CMF is dilly-dallying with 0 line at 0.09. Delivered Quantity to Traded Quantity was 48.50, while yesterday it was 52.18, on BSE, which is a normal value!!! While on NSE it was 30.53%, while yesterday it was 27.84%. These readings suggest as if nothing has happened! "Interesting Times" Huh.
  • US Dollar

    Rupee strengthened against US Dollar by about another 75p. Change in Open Interest was -2.2%, and Open Interest at the End of the Day was 23,53,903 (24,05,857) on NSE. USDINR pair has convincingly breached 55.15, on the back of some very heavy volumes!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They are boldly buying at all levels. Today they were net buyers for 2252.17 Crores. They are net Buyers for 7552.93 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 59,821.72 Crores in this year. Whereas DIIs were net Sellers today for -837.72 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -2849.78 Crores in current series. Since 1st January 2012 they have sold for -30,948.82 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are buying like MAD. Most of the volumes figures are originating from their desks. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market irrespective of price levels. So probably DIIs are looking to buy at lower levels than currently prevailing levels. Perhaps they are getting ready for the impending "Intermediate C" Corrective Elliott Wave. FIIs were seen building their long positions in Index Futures, once again, and their Open Interest rose by 4.94%. They were seen writing Index Options with their Open Interest in Options segment rose by 6.58%. Today they have built some long positions in Stock Futures, the change was at 1.19%. In Stock Options the FIIs are briskly writing options, as if it is a plundering opportunity, with an increase in Open Interest by about 12.76% today(and it was a plundering opportunity). Most Probably they are writing puts for now.
  • Trend

    RSI is at 75.92, whereas ADX increased to 23.64 from 20.95, VHF increased to 0.43 from 0.38, seems to have formed the bottom. Nifty seems to be in a mild uptrend. The volumes are gradually picking up, with an odd day having a volume lower than 30 DMA of volumes.


  • Outlook

    Nifty is mildly trending up. Between 5300 and 5500 Nifty would continue to trade without a distinct trend (sideways). Today volumes were about 83% higher than normal. Nifty closed 32.35 points higher than the previous close. Market breadth was good. All this indicates a pause or little correction, even if it just happens during intra-day trading. The Trend strength indicators have formed some kind of bottom, moving away from their recent low values, although they are in no hurry. Nifty could trade between 5648 to 5508 on Tuesday.




"In some of the early work on stock market cycles, the U.S. National Bureau of Economic Research found that stock market prices tend to move early in business cycles: stock prices are a leading indicator. Market Analysts have been searching for leading indicators for stock prices; they are searching for a leading indicator of a leading indicator."(pp5, MTA Journal, issue 1, January 1978) Nifty would be bullish if it is above the Intermediate Term Average (5290) and 3 day Swing Low (5421), and sideways otherwise Please read the Disclaimer on the top right hand corner. Thank You.

Sunday, September 16, 2012

Weekly Outlook


  • Closing

    S&P CNX Nifty opened this week at 5361.9 (5276.5) made a higher high of 5586.65 (5366.3) on Friday, and made a higher low of 5332.1 (5215.7) on Tuesday. It closed at 5577.65 (5358.7) for the week. Volumes were about 4% lower than 30 week running average. This is the highest weekly closing since 25 July 2011.
  • Volume Analysis

    Chaikin Money Flow has risen to +0.077 (-0.048 ), MFI is about 69 (69) unchanged from last two weeks, and OBV has broken out of the double top. MFI has broken out of it's February high of 70.44. This indicates that Nifty could break out of 5600 in coming weeks.
  • Trend and Momentum

    Weekly RSI is at 63 (56) and ADX is now at 10.26 after making an all time low of 9.48 . RSI has recorded the highest reading since Dec 2010. This indicates that sooner than later Nifty would start to trend.

  • Moving Averages and Other Pivots

    Supports are placed at 5554, 5531, 5508, 5438, 5405, 5380, 5323, 5221, 5125. while Resistances are placed at, 5601, 5624, 5648, 5718, 5751, 5776, 5832, 5934, 6031.

  • Volatility

    Chaikin's Volatility is at -7.86 (-30.86), still in negative territory, VIX continued to trend down, although it is moving sideways in daily charts, but as long as it is below 20, it would continue to move sideways. This implies that there is no panic among the various market participants and things are going much according to their expectations.
  • Market Breadth

    The Market Breadth was poorer than last week. It was 1.19 on Friday, as compared to 1.96 last week.
  • Institutional Activity

    The FIIs continue on their shopping festival, while DIIs are selling everything they own. Even on Friday, while everybody and all their slaves were buying DIIs were busy unloading.
  • Outlook
    1. Nifty would be range bound as long as it is trading between, 5300 and 5500. Below 5250 one should not hold long positions in derivatives, but may continue to hold positions in cash and delivery. Nifty would get oversold around 5150 and overbought around 5648.
    2. Major triggers this week are RBIs review of Monetary Policy on Monday and Indian Bank Loan Growth on Friday, and Nifty may be very volatile this week, as it is trying to break out.
    3. 5650 is an important level, if Nifty closes above this level next week, then it could try 5900 odd levels in coming weeks.




Please read the Disclaimer on the top right hand corner. Thank You

EOD Analysis and Outlook

  • Closing Data for 14-Sep-2012

    Nifty opened at 5528.35 (GAPPED) , made a higher high of 5586.65 ( 5447.45 was the previous high) and a higher low of 5526.95(5421.85 was previous low), finally closing at 5577.65 (previous close was 5435.35 ). Volumes were about 80% higher than normal. Nifty closed 142 points higher than the previous close.
  • Moving Averages and Pivot Points

    The Short term average is 5420, while intermediate term is at 5290 and long term is 5150. Market Structure is technically Bullish. Supports are placed at 5554, 5531, 5508, 5438, 5405, 5380, 5323, 5221, 5125. Resistances are placed at, 5601, 5624, 5648, 5718, 5751, 5776, 5832, 5934, 6031.
  • Futures

    The OI in futures is 2,27,72,250(2,07,48,450) (+9.75%) and Cost of Carry of the September series remain decreased to 4%, while Open Interest went up by 8%. The October series Cost of Carry decreased by 1% at 5% and Open Interest went up by 30% as compared to 4% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up by 9.75%. Seems like market participants are divided about the next move.
  • Options

    In Options Segment, the open interest was 134855550(13,21,03,050) the Open Interest went up by about 2.08%. The Highest Open Interest continues to be in 5600 Strike Calls and this might define the upper cap of the current range. The largest change in Open Interest figures was noticed in 5800 Strike Calls. As for Index Put Options the Highest Open Interest is in 5300 Strike Puts. The largest change was noticed in 5600 Strike Index Put Options. It seems that Put Writers are expecting the range to remain between 5600 to 5800, while Call writers are expecting the range to remain between 5300 and 5600. PCR fell at 1.02 from 1.08, although as a rule of thumb it should have gone up. I remember the ancinet curse, "May you live interesting times", and so here we are...This view is based on observing the Options Derivatives of the current, mid and far series.
  • Volatility

    Volatility continues to be low. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. ATR touched 60 today, but if it doesn't maintain a reading above 60, it may fall down again . This might indicate that ATR could move sideways in coming sessions. To overgeneralise, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate or Primary degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth wasn't very good. The Advance-Decline Ratio was merely 1.18, as compared with 0.67 yesterday. The AD Ratio goes through the roof on breakouts, but this time it's stuck in chandelier, or so it seems. Noted that the AD Ratio exhausts within three days of any breakout or breakdown! Poor me had been writing this for a week ,"Nifty is on a verge of a breakout, and if it closes above 5479 in the coming sessions then we would see 5600 on the board pretty soon." Koi Shak?
  • Volumes

    Cash Volumes had been drying up lately. But today was an exception. Today Volumes were 80% higher and Market Breadth wasn't that good. Money Flow Index jumped to 53.43 from 43.34, surprisingly still below 70 it has not signalled a bullish reversal as yet!!!. While CMF is dilly-dallying with 0 line at 0.116. Delivered Quantity to Traded Quantity was 52.18, while yesterday it was 50.22, on BSE, which is a normal value!!! While on NSE it was 27.84%, while yesterday it was 30.49%. These readings suggest as if nothing has happened! "Interesting Times" Huh.
  • US Dollar

    Rupee strengthened against US Dollar by about 72p. Change in Open Interest was 3.9%, and Open Interest at the End of the Day was 2405857(23,14,633) on NSE. It seems that USDINR tried to breakdown below 55.15, unless we get two more closings below that level, we can't be certain!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They are boldly buying at all levels. Today they were net buyers for 2833.72 Crores. They are net Buyers for 5300.76 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 57,569.55 Crores in this year. Whereas DIIs were net Sellers today for -688 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -2012.06 Crores in current series. Since 1st January 2012 they have sold for -30111.1 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are back to their own ways. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. And this year, FIIs are not only "absorbing the DII liquidation', but buying free float from the market as well. So probably DIIs are looking to buy at lower levels than currently prevailing levels. Perhaps they are getting ready for the impending "Intermediate C" Corrective Elliott Wave. FIIs were seen building their long positions in Index Futures, once again, and their Open Interest rose by 7.45%. They were seen writing Index Options with their Open Interest in Options segment rose by 7.56%. Today they have built some long positions/covered their shorts in Stock Futures, the change was at 1.53%. In Stock Options the FIIs are briskly writing options, as if it is a plundering opportunity, with an increase in Open Interest by about 5.31% today(and it was a plundering opportunity). Most Probably they are writing puts for now.
  • Trend

    RSI is at 74.31, whereas ADX increased to 20.95 from 18.54, VHF increased to 0.38 from 0.28, seems to have formed the bottom. Nifty seems to be in a mild uptrend. The volumes are continuing to be low, with an odd day having a volume higher than 30 DMA of volumes. The Current upswing isn't backed by any significant increase in volumes, though.
  • Outlook

    Nifty is mildly trending up. Between 5300 and 5500 Nifty would continue to trade without a distinct trend (sideways). Today volumes were about 80% higher than normal. Nifty closed 142 points higher than the previous close. Market breadth wasn't very good. All this indicates a pause or little correction, even if it just happens during intraday trading. The Trend strength indicators have formed some kind of bottom, moving away from their recent low values, althoough they are in no hurry. Nifty could gap up around 5648 on Monday. Probably, the next big trigger would be the RBI Monetary Policy due tomorrow.


Nifty would be bullish if it is above the Intermediate Term Average (5290) and 3 day Swing Low (5393), and sideways otherwise
Please read the Disclaimer on the top right hand corner. Thank You.



Thursday, September 13, 2012

EOD Data and Outlook

  • Closing Data for 13-Sep-2012

    Nifty opened at 5435.2, made a higher high of 5447.45 (5435.55 was the previous high) and a higher low of 5421.85(5393.95 was previous low), finally closing at 5435.35 (previous close was 5431). Volumes were about 11% lower than normal. Nifty closed 4 points higher than the previous close.
  • Moving Averages and Pivot Points

    The Short term average is 5395, while intermediate term is at 5285 and long term is 5150. Market Structure is technically Bullish. Supports for this week are placed at 5345, 5331, 5317, 5276, 5256, 5242, 5208, 5148, 5091. While Resistances are placed at, 5476, 5461, 5442, 5400, 5386, 5373.
  • Futures

    The OI in futures is 2,07,48,450(2,03,73,900) (+1.84%) and Cost of Carry of the September series remain unchanged at 7%, while Open Interest also went up by 1%. The October series Cost of Carry remain unchanged at 6% and Open Interest went up by 4% as compared to 2% yesterday.The overall Open Interest in S&P CNX Nifty Index Futures went up marginally by 1.8%. Seems like market participants are waiting for a fresh trigger.
  • Options

    In Options Segment, the open interest was 13,21,03,050(12,63,12,600) the Open Interest went up by about 4.58%. A major build up of positions in 5600 Strike Calls might define the upper cap of the current range. The largest change in Open Interest figures was noticed in 5600 calls. As for Index Put Options 5200 Strike Puts continue to be written in a brisk manner. The largest change was noticed in 5400 Strike Index Put Options. It seems that Put Writers are expecting the range to remain between 5400 and 5600! PCR is back at 1.08 from 1.03, although as a rule of thumb it should have gone up. This view is based on observing the Options Derivatives of the current, mid and far series.
  • Volatility

    Volatility continues to be low. Now VIX is actually moving sideways below 20, and unless breaks this level of 20, there isn't much to notice about. ATR is keeping below 60 . This might indicate that ATR could move sideways in coming sessions. To overgeneralize, low volatility is generally observed to occur at Market tops, and perhaps during range bound movement and vice versa. Moreover Nifty hasn't seen a Corrective "B Elliott Wave" at Intermediate or Primary degree. So this is uncharted or unknown territory for most Investors and Swing Traders.
  • Market Breadth

    Market Breadth fell drastically today. The Advance-Decline Ratio was 0.67, as compared with 1.40 yesterday. Seemingly, the AD Ratio exhausts within three days of any breakout or breakdown! Nifty is on a verge of a breakout, and if it closes above 5479 in the coming sessions then we would see 5600 on the board pretty soon. Another possibility could be that Nifty might spend week between 5400 and 5500.
  • Volumes

    Cash Volumes had been drying up lately. But today was an exception. Today both Volumes and Market Breadth were poor. Money Flow Index jumped to 43.34 from 37.47, surprisingly refusing to move up it has not signalled a bullish reversal as yet!!!. While CMF is dilly-dallying with 0 line at 0.025. Delivered Quantity to Traded Quantity was 50.22, while yesterday it was 49.77, on BSE, which is a normal value. While on NSE it was 30.49%, while yesterday it was 28.95%%. These readings point to the fact things are normal, for the time being at least.
  • US Dollar

    Rupee weakened against US Dollar by about 18p. Change in Open Interest was 0.1%, and Open Interest at the End of the Day was 23,14,633 (23,11,798) on NSE. It seems that USDINR is trading sideways between 55.15 and 56.10, so unless either side is taken out speculators won't be much interested!
  • Institutional Activity

    For FIIs it seems to be a shopping festival. They are boldly buying at all levels. Today they were net buyers for 361.48 Crores. They are net Buyers for 2467.04 Crores in the current series (i.e., since 31st Aug 2012). And they are net buyers for 54,735.83 Crores in this year. Whereas DIIs were net Sellers today for -156.05 Crores (sigh, I am sick of reporting that they have been selling for years). They are net sellers for -1324.06 Crores in current series. Since 1st January 2012 they have sold for -29423.1 Crores. DIIs have been slowly and continuously liquidating their positions. Even FIIs were a bit hesitant in the beginning of the current series, but now they are back to their own ways. FIIs hold positions for a longer period of time. They do what sometimes is referred to as Long Term Buy and Hold (LTBH). And DIIs attempt to outsmart them by over trading. But DIIs are continuously liquidating their positions since December 2010. So probably DIIs are looking to buy at lower levels than currently prevailing levels. Perhaps they are getting ready for the impending "Intermediate C" Corrective Elliott Wave. FIIs were seen building their long positions in Index Futures, once again, and their Open Interest rose by 2.48%. They were seen writing Index Options with their Open Interest in Options segment rose by 069%. Today they have built some Short positions/changed counters in Stock Futures, although figures are negligible. In Stock Options the FIIs are briskly writing options, as if it is a plundering opportunity, with an increase in Open Interest by about 4.01% today. Most Probably they are writing puts for now.
  • Trend

    RSI is at 64.63, whereas ADX increased to 18.54 from 17.59, VHF increased from 0.27 to 0.28, seems to have formed the bottom. Nifty seems to be in a mild uptrend. The volumes are continuing to be low, with an odd day having a volume higher than 30 DMA of volumes. The Current upswing isn't backed by any significant increase in volumes, though.
  • Outlook

    Nifty is mildly trending up. Between 5215 and 5415 Nifty would continue to trade without a distinct trend (sideways). Today volumes were about 11% lower than normal. Nifty closed 4 points higher than the previous close. Market breadth was unexpectedly poor. All this indicates a pause or little correction, even if it just happens during intraday trading. Moreover there are negative divergences in most momentum indicators. The Trend strength indicators have formed some kind of bottom, moving away from their recent low readings, although they are in no hurry. It's quite cyclical, or so it seems, for last three weeks, Nifty tends to lose momentum on Thursdays. Probably, the next big trigger would be the RBI Monetary Policy review on 17th Sep. And tomorrow we have WPI and FX reserve data. WPI is expected to be 6.95%, and FX reserve data released during the last month suggested a balance of at least 290.46B.


Nifty would be bullish if it is above the Intermediate Term Average (5285) and 3 day Swing Low (5332), and sideways otherwise
Please read the Disclaimer on the top right hand corner. Thank You.