But what may be more worrying is the Nifty GAP or rather the time it is taking to fill..... The longer it takes for the markets to fill the Gap ... the deeper the correction is likely to be !
There has also been a debate as to whether the gap will be filled at all..My own presumption is that since the gap did not appear at the bottom of the down move (say near to 8000 or 9000 Sensex, we may not term it as a 'runaway' gap. So my own evaluation suggests that the gap will be filled - When? That is the 'million dollar (oops rupee)' question...
In the chart below i have tried to provide a little different perspective on the gap. This analysis suggests that if the markets take longer time to fill the gap, in fact , we may see near of 11000 to 11500 Sensex levels - i.e. somewhere between 50% and 61.80% retracement of the entire move from 8000 levels.
This analysis would get negated only if 16000 sensex is broken with huge volumes - which at present seems too far fetched!
Woops - tighten your seat belts !
Happy trading!
CA Rajiv D Khatlawala
Head of Research & Trading
JHAVERI Securities Ltd.
4 comments:
Dear Mr. Rajiv,
I have an academic question on FII trading in "derivatives" and their trading figures published by SEBI.
I am just confused with these figures and not able to figure out how to analyse them.
Kindly help me in this regard.
Trading Day - Thursday, 23rd July, 2009
FII Index Futures Bought - 91779 contracts
FII Index Futures Sold - 84576 contracts
Open Interest - FII Index Futures - 456468 contracts
Previous day Open Interest - FII Index Futures - 397319 contracts
My question is, on Thursday, FII's have net bought 7203 contracts (91779-84576).
But, how come their open interest increased by whopping 59149 contacts (456468-397319).
I would be grateful, If you could explain to me the nitty gritty of these figures and how to analyse them.
Thanks in advance.
With Regards,
Praveen Shamain
The simple explanation to this is that you should not see the NET FII buying ... See the total trades - Buy + Sell .... many of the buy trades and many of the sell trades may be 'opening' of new positions by various FIIs... hence the increase in OI by 59000 contracts
Regards
Rajiv
Thanks, Rajiv.
It makes sense.
is mphasis forming a rounding bottom backed by volumes?
Post a Comment