Thought for the day
"Why can we remember the tiniest
detail that has happened to us, and not remember how many times we have told it
to the same person."
—Francois de La Rochefoucauld (French,
1613-1680)
Word for the day
Eutaxy (n)
Good order or management.
Malice
towards none
Winter is certainly arriving early this
year and promises to be harsh
First random thought this morning
Take
one common person from the streets of Lahore and Delhi.
I
will wholeheartedly support all war cries against Pakistani people, if any one
of the studio experts, warmongers rallying at social media and feudal lords of
Mumbai, could tell me any difference between these two persons.
On past many occasions we have observed that the change in monthly
average trading value is a useful leading indicator for Nifty movement in the
coming month.
Any divergence in the monthly movement of Nifty and monthly average
traded value is usually bridged in the next following 1-3months, depending on
the movement in VIX.
If VIX also moves sharply with Nifty, then the divergence may take
little longer to bridge. Otherwise, the convergence is seen in 4-6week period.
The following chart of Nifty movement since February this year shows
that the convergence An analysis of past six months would show that the
divergence is usually bridged in the following 4week period.
MTD in September 2016 Nifty has gained 1% from August closing, whereas
the MTD average trading value is higher by 2% MoM. Presently the value of Nifty
(8831.55) and monthly trading average for September MTD (8831.52) are the same.
Any further correction in Nifty from here will lead to widening of divergence
and improve the chances of a converging pattern next month.
I see the up move facing some resistance around 8866 level and a strong
resistance around 8978-8999 range. 8774 is immediate support and 8630-8640 a
strong support base.
A close above 8774 this month shall see Nifty breaking 9K barrier in
next 4-6weeks and mark a new high, before a meaningful correction sets in.
As suggested last week (see here) Bank Nifty appears
to be losing momentum. Watch closely for a weekly close outside 19560-20340
range to decide the next course of action. Near term banks are avoidable for
trading.
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