Market Outlook for the month of January, 2012

January 2, 2012   ·   0 Comments

www.stockssavvy.comThe fall seen during the latter part of the week, after testing the 20 – Day EMA, suggests that 16020 – 16070 / 4800 – 4820 levels have now become a significant resistance zone for the markets. Therefore, the upward momentum is likely to resume only if indices manage to sustain above this resistance zone. In this case, we may witness a further rally towards 16286 – 16421/ 4881 – 4920 levels. At present, we are observing that indices have closed marginally below the 61.80% Fibonacci retracement level of 15485 / 4634. The next immediate support is at 15331 / 4589, which is the 78.60% Fibonacci retracement level.

On the Daily chart, the 61.80% and 78.60% Fibonacci retracement levels of the rise from 15135 to 16049 / 4531 to 4801 are at 15485 / 4634 and 15331 / 4589, respectively.

Further, the recent bottom of 15135 / 4531 would act as a crucial support for the markets. The negative momentum may reinforce on the violation of this support. In this case, indices may slide towards the next support levels of 14870 – 14400 / 4430 – 4300

FII’s were net sellers in cash market segment on Friday’s trading session; they were net sellers worth of 178/- cr. On Derivatives front they were net sellers in index futures, while in index options they were net buyers.

On Options front deep out-of-the money put options of 4100 and 4200 strike price have added good amount of open interest, while in call options at-the money and out-of-the money call option of 4700 and 5000 strikes have seen maximum buildup of open interest.

Highest Open interest is at 4500 Puts & 5000 Calls which should be the broad range of Nifty for the Month of January. Lows of 4530 will be difficult to break for the Nifty in the month of January. Even in worst case scenario, we don’t see Nifty breaking 4400 – 4500 range in the month of January. Any positive news can actually cover lots of shorts in the market. One should avoid shorting the Nifty for the month of January.

We wish everyone a Happy and Prosperous .

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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