Market Outlook for the month of February

February 1, 2012   ·   0 Comments

Trading Strategy:

http://stockssavvy.comMarkets opened on an optimistic note mainly due to strong global cues and traded with positive bias as rupee continued to appreciate till the end of the session. As a result, indices closed almost at the highest point of the day. Going forward, if indices manage to sustain above 17384 / 5220 level, then they are likely to rally towards the next resistance zone of 17702 – 17908 / 5326 – 5400. On the other hand, 16965 / 5120 level may act as support in coming trading sessions. Traders are advised to adopt stock specific approach and follow strict stop losses.

Yesterday, unexpectedly our benchmark indices opened significantly higher in-line with strong cues from other Asian  markets. This positive momentum stayed throughout the day to close almost at the highest point of the day. On the sectoral front, Banking, Realty and Auto counters contributed heavily in yesterday’s strong up move. There was no sector in the negative  erritory. The advance to decline ratio was strongly in favor of advancing advancing counters. (A=1804 D=1034)

 

Weekly Trend:

The trend deciding level for the day is 17,123/5,178 levels. If trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,281 – 17,368/5,236 – 5,274 levels. However, if trades below 17,123/5,178 levels for the first half-an-hour of trade then it may correct up to 17,036 – 16,878/5,141 – 5,083 levels.

In yesterday’s session, Bank Nifty opened on an optimistic note in line with our benchmark indices and gained strength as the day progressed to close near the highest point of the day. Positive results from ICICI BANK provided further fillip and the index surged even higher. Bank Nifty is now very near to its resistance zone of 9970 – 10080. Hence we expect some consolidation or minor correction as the index approaches these levels. On the downside 9703 – 9625 levels are likely to act as support in coming trading session.

 Nifty Trend for February:

The Implied Volatility of at the money options is decreased from 21.33% to 20.48%.  The PCR-OI has being increased from 1.22 to 1.28 points.  The total OI of the market is `1,07,691.50cr. and the stock futures OI are `28,809/-cr.

FII’s were net buyers in cash market segment; they were net buyer’s worth of `624/- cr. in yesterday’s trading session. On derivatives front they were net buyers in both index futures and index options. On options front 5100-5200 put option have seen descent amount of buildup in open interest, while in call option 5300 strike have seen maximum buildup and 5100 call option have seen some unwinding in open interest in yesterday’s trading session.

 

Last month, we asked readers not to short the market & predicted consolidation in January series. After January F&O series got expired on 19th January, Market rallied 300 points on Nifty. I hope readers would have enjoyed the call.

The highest Open interest is at 5000 Puts & 5300 levels which shows the support & resistance for the month of February. This is month of Budget & nifty is going to give very fast moves. Position in F&O market is light which signify there could be significant move of around 400 points on nifty with any positive or negative news. We will still ask readers not to short the market in this series as any small positive news can pull up nifty. Traders are advised to keep light positions & trade with strict stop losses.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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