EOD Update Nov 12 2010

Man must be prepared for every thing in life as Nothing is durable

One of the highest weekly fall in NF since May 2010. Volume was less in NF and on the  contrary equities witnessed more volumes.In the morning NF was taking support at 6196 NF level but once broken it was a very fast journey southwards . I expected 6141 NF level since the Diwali high and we managed to reach that level and in panic it even touched 6077 NF. Almost all supports broken . Repeatedly i was emphasizing the 6141 NF level (Refer to last week post) as it was the reference level from where we had great up move till Diwali. Are we done with the lows or still some left ??.We Will discuss in the another post after this one. This is just and EOD Update. Would update the weekly chart after this one ( History Repeats )

Bullish Scenario

Look the EOD chart beautifully poised for and up-move till 6149 - 6196 - 6225 NF.Look at the volumes at EOD Three green candles accompanied by volume. Does the Bell Ring . Every low of the day is being utilized for buying by some big players .I have considered two criteria for this.

Firstly : Extremely oversold conditions and since the last 1.5 years oversold condition has managed to correct and scale up very soon unlike the overbought levels which tends to continue. 

Secondly : single day OI addition of almost 110% in 6100 calls (some body is definitely going to come to slaughter the 6100 call writers ruthlessly / same as the case with 6300 puts on Diwali). Remember we are in a secular Bull Run till 7200 odd levels in NF. 

I would term this as only a technical correction which is a healthy sign for NF and Market too.Also if 6225 NF holds then we can retest of 6347 - 6380 level.

Bearish Scenario

Owing to the two day fall in market if the major support of 6040 NF doesn't hold then 5935 - 5850 NF Region would be tested again . Below 5935 -5850 NF much deeper correction correction to 5400 NF ( very very remote chances).

For tomorrow 6141 is resistance level and above it very fast move towards 6195 - 6211 - 6225 NF would be seen. Down side looks limited owing to oversold conditions still if 6040 NF breaks then 5935 may be visited.

My position : Covered all shorts (taken at 6275 NF) at average of 6136 & 6400 calls naked and  accumulating 6100 call for target of 6225 NF