Nifty Index Outlook for 2-6 January 2012

By | December 31, 2011 11:18 pm
24 Comments

Happy New Year 2012 to all Site readers.

 

2011 came to an end on dismal note with Sensex recorded its second worst performance in the last 14 years, second only to 2008 .BSE and Nifty is down 24%  making it one of the worst performers in the global stock markets.  The real pain is in DEFTY ie. Nifty is Dollar term which is down 43% attributing to the Rise in INR of 19%. Foregin investor have seen there portfolio value eroding by 43% which has left a deep black hole in there pockets.

 

Below is Month on Month Performance of Nifty down 24% in absolute term

JAN 2011 Nifty -10.2%
FEB 2011 Nifty -3.1%
MAR 2011 Nifty +9.4%
APR 2011 Nifty -1.4%
MAY 2011 Nifty -4.8%
JUN 2011 Nifty +3.2%
JUL 2011 Nifty -2.9%
AUG 2011 Nifty -8.8%
SEP 2011 Nifty -1.2%
OCT 2011 Nifty +7.8
NOV 2011 Nifty -9.3%
DEC 2011 Nifty -4.3%

 What to expect out of 2012

I am a firm believer of History and Chart pattern repeat itself .2012 being a leap year which as per history is not good for Stock Market

Leap years are generally not so good for the markets if you see the years 1992,1996, 2000, 2008 all of them have been leap years which are the years where major corrections have happened in Stock Market.

  • 92 was famous for Harshad Mehta Scam
  • 2000 for Dot come Bubble Burst and Ketan Parakh scam
  • 2004 was when NDA lost and market corrected and the 11% fall in May 17
  • 2008 US financial Crisis and major slowdown.

So time to be cautious as per Historical data from past 20 years on Financial market.

 

Lets Jump into technical for coming week

 

Hourly chart

 

Hourly charts are looking extremly weak as Nifty broke and close below the important support area of 4650. Volumes were less on the day when nifty broke below 4650 so it can be considered as whipsaw if Nifty on Monday closes above 4650 F&O turnover was just 65K cores.

For this downtrend to get over Nifty needs to close above 4725 level as shown in red trendline in above chart.

Daily Chart

On daily chart Nifty is approaching the all important support level of 4531.  January as such have been a crucial month as 2011 Jan Nifty crashed 11%, 2008 Jan we had the panic fall of 25% in 2 days. So January are always exciting month and huge and wild swings are inheritant.

3  Sceanrios are Possible

1. Nifty bounced of from Monday above 4650

2. Nifty reaches near 4531 forms a double bottom and rallies

3. Nifty breaks 4531 and made a new Low for 2012 around 4430 levels.

 

I will give more possibility to 1-2 scenario looking at bearish pessimism all around.

As i always say for trader only 1 thing is Important TRDING LEVELS baki sab bakwas.

 

Nifty Daily Channels

Nifty has entered into a downward facing channel with formation of lower lows. Till lower low formation do not gets invalidated and Nifty remains in downward channel weakness will persist is market.

Channel Breakout of upside comes above 4725,Positional Shorts can use 4725 as SL for Shorts created at higher levels.

Weekly chart

Weekly chart break below 4608 will increase the probability of  breaking the 2011 Low of 4531 and making new low@ 4430 which is trendline target. Positive divergence is present on MACD (not shown in above chart)  to show its effect Nifty needs to trade above 4725.

Monthly Chart

Nifty Trend Deciding Level:4646

Weekly Resistance:4670,4725,4756,4810

Weekly Support:4565,4531,4430

 

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24 thoughts on “Nifty Index Outlook for 2-6 January 2012”

  1. Abhishek

    HI ! Bhamesh,

    Will you still confirm on your analysis about leap year or would you like to adjust same. Please confirm .

    Reply ↓
    1. Bramesh Post author

      dear sir year has jst started i stick with my view as per history… Let me add plz do not go and be adamant on views trade on system and love your trading levels…

      Reply ↓
  3. ranjan

    at the first outset let me wish a happy and marvelous New Year 2012.
    may god fulfilled all your wishes.the insight provide by you are very rare in this days of dupilication fake report and update of market.You are correct when you said that Levels are only real and correct all others things are hogwash. thanks for all this hardworking and time consuming exercise.

    Reply ↓
    1. Bramesh Post author

      Thanks a lot sir.. Trading levels are best friends for a Trader 🙂

      Wishing you a Happy prosperous and profitable 2012.

      Rgds,
      Bramesh

      Reply ↓
  4. Chandra Mohan Gupta

    Dear Ramsh,

    I am unable to copy your articles/ analysis to paste in word file for my record and future study as and when required.

    Shall appreciate if you please provide this feature also in you site for users like me.

    Thanks and regards

    Chandra Mohan Gupta

    Reply ↓
    1. Bramesh Post author

      Dear Sir,

      It was brought to my attention by readers of site that people are using the Calls posted on site to give paid calls.

      I am against giving paid calls so i have disabled the feature.

      You can bookmark the links the post you want as a reference for future.

      Rgds,
      Bramesh

      Reply ↓
  6. Chandra

    Dear Ramesh,

    i have a small request. I get mails regularly showing links for various blogs in SB community. Is it not a good idea to identify yourself in the very first line of your post as a practice so we know which link to open? From my mail, i have to click on all links to see which is yours. —Thanks

    Reply ↓
    1. Bramesh Post author

      Dear Sir,

      You can register in the Feedburner Link which say POST IN YOUR INBOX present in right side middle of site.

      The post will get delivered in your inbox as soon as they get published.

      Rgds,
      Bramesh

      Reply ↓
  7. Chandra

    Dear Ramesh,

    Wish you Happy New Year 2012. I came to know a new friend in you in 2011. Most analysts do not come so close to our heart as you do. Your sincerity is appreciated.

    On the subject, you reflected the buffet policy and referred to the herd mentality of the general public. But i wonder if your leap year concept aligns with the same herd mentality. If so, what is your particular view based on technicals and fundamentals? 1.BUY and KEEP (or) 2.WAIT for some more time for those who want to go really long.

    Reply ↓
    1. Bramesh Post author

      Dear Sir,

      Thanks for your Kind words, It helps me in keep going forward and continue with my analysis.

      As i always says for a trader its just levels which count and matters rest all are observation which should be kept in mind to improve our profits and minimizing our losses.

      As an investor/trader no one can catch absolute top and bottom on consistent basis so if you are investor use dips to make entry in market in your fundamentally researches stocks.

      Keep putting 20% at these levels and always save money for rainy days.

      Rgds,
      Bramesh

      Reply ↓
  8. Veeraraghvan

    Dear Sir,

    Wish you happy and prosperous new year.

    i used to read your technicals it was very useful. hope you will continue to provide the details.

    today you have provided leaf year details from 1992 but you have not provided 1996 details. please provide us.

    this will help all readers.

    With Regards
    veeraraghavan

    Reply ↓
    1. Bramesh Post author

      Dear Sir

      Wishing you a Happy and prosperous new Year 2011.

      In 1996 Sensex return was -.2%

      Close on 1995 -3110
      Close on 1996 – 3085

      Rgds,
      Bramesh

      Reply ↓
    1. Bramesh Post author

      Thanks a lot sir for you appreciation.

      Do let me know any improvements required,as senior trader like you have loads of valuable experience to share.

      Have a Profitable year 2012

      Rgds,
      Bramesh

      Reply ↓
  11. Chandra Mohan Gupta

    Sir, Thanks for publishing such an analysed study over the markets status in the coming day and specially during the period when whole world was busy in enjoying the celebration of the New year.

    This shows your sincerity and dedication towards the real enjoyments towards your commitment of publishing your articles in general interest of traders than the bubbles of emotional enjoyments. I salute you….

    But unable to understand why Monthly charts is given in the article without any of your views…..

    Chandra Mohan Gupta
    cmgupta.blogspot.com

    Reply ↓
    1. Bramesh Post author

      Thanks Sir,

      I am passionate about trading sharing my analysis which keeps me working even on 31 December.

      As per Monthly chart the lower lows formation is in effect combined with trendline breakdown which was my intention to add monthly chart.

      Have a Profitable year 2012

      Rgds,
      Bramesh

      Reply ↓
    1. Bramesh Post author

      Dear Sir,

      Thanks a lot for your generous wishes.

      Wishing You and Your family a happy and prosperous year 2012.

      My best wishes for your advisory service.

      Have a Profitable year 2012

      Rgds,
      Bramesh

      Reply ↓
  13. pratik

    hello, wish u very happy new year. i’ll pray to god u can make as much money as rakesh jhunjunwala made. every day is mirecle so find that and take tht opportunity to enjoy. happy trading for the whole year…… and also thanks for the guide new commer (trader) like me and keep adding new new analysis whole year…..

    Reply ↓
    1. Bramesh Post author

      Dear Pratik,
      Thanks a lot for your wishes. Money is always secondary aspect best is to share knowledge and make people earn also. I would be happy if my analysis help people/trade to make money.

      My best wishees for 2012,You excel in your job as an equity analyst.

      Have a Profitable year 2012

      Rgds,
      Bramesh

      Reply ↓

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