Market Outlook for the month of November,2011

November 1, 2011   ·   0 Comments

FII’s continue to buy in cash market segment; they were net buyer’s worth of `359/- cr. in yesterday’s trade. On Derivatives front they were net sellers in index future but the quantum of selling was quite less, while in index options they continue to be net buyers and we fill is more of buying of call options as IV is quite low.

www.stockssavvy.comOn Options front some buildup was seen in Nifty 5400 and 5500 call options, while in put options 5200 have seen the maximum buildup. FII’s continue to buy in cash market segment; they were net buyers worth of `359/- cr. in yesterday’s trade. On Derivatives front they were net sellers in index future but the quantum of selling was quite less, while in index options they continue to be net buyers and we fill is more of buying of call options as IV is quite low.

Nifty expiry in the last month was as expected. It consolidated between the range of 4700-5200. After the expiry, market shoots almost 200 points on Nifty in a single day. Right now, the highest open Interest is at 5400 Call & 5000 Puts which signifies the immediate Resistance & Support for the market. After 2-3 months, markets have shown some strength & we have seen a range shifting upwards a lil which is a positive sign.

With positive news flowing in from West, it looks highly unlikely that we may go to 4700 levels again in November. After some days of consolidation, we may again try to take the previous high of 5400 on Nifty in this series. It is good time to start a long. We were buyers of specific stocks – Reliance, HDFC Bank/Mutual funds in the last fall. We started accumulated from 5400 levels & have bought aggressively near 4700 levels. Both the stocks has outperformed Nifty & shown good jump from the lows & same is the case in the mutual funds.

Disclaimer: I was buying Tax saving mutual funds in every dip & has an average buying on around 16,900 levels. I will accumulate more if there is another dip to 4800-4900 levels in this month series.

Broadly speaking, we are in the consolidation phase. I am stunned how exact the bull phase is turning out to be. A bull cycle is generally of 8.4 years for stock markets. After the bubble burst of previous bull cycle, it has been observed that in the first 2 years markets comes & forms a new high. Then in the corrective phase, markets consolidates in a range for the next 3 years. Same type of charts were observed after the bubble burst of 2000.  It was only after 2005, when nifty took out it previous highs on consistent basis & then a emphatic bull run started for the next 3 years.  With the same chart formation, we may not see New high in the Nifty for the next 2 years. Participation from the retail is low which should be ideal time of selective buying & should be used as accumulation Zone. I will post a contrarian call for investment soon on the forum.

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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