Nifty on edge - Which way do DIIs want to go?
Since I recommend that people invest and trade ETFs (Nifty BeES), I’m also posting this piece here:
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The wafer thin volumes today (Thu. 13.01.11) shows that even a nett negative flow of (-)12 Cr could make the Nifty rise from 5710 levels to close at 5862 – a rise of 152 points. Earlier in this month, an equally small +ve nett inflow resulted in the Nifty dropping about the same number of points!
This is proof, if proof is needed, that when volumes are thin, the market can be easily moved by the smallest of volumes in any direction it chooses. This happens when the market consensus is balanced. i.e. buyers = sellers.
If you look at the data of FII & DII flows (purchases/sales; nett) then you will observe that DIIs have matched their nett buying to match FII nett selling, moving up or down. Or it is the other way around, with FIIs doing the balancing act. It doesn’t matter, up to a point.
Looking at the data from April 2010 to date, I was SHOCKED to find that FII nett for the whole period is that it was domestic money that’s in the market as on date! i.e. DII – FII = Rs. +1,25,803 Cr. Did you know that????
THAT fact explains how the Nifty saw a rise and not a fall. Because DIIs (Indians) believe the India story and FIIs have taken the money they can at this stage.
Unless FIIs now bring in fresh money to short the markets, this Nifty bounce back should in all likelihood continue and see a fresh bull run after some Q3R discounting when FII hot money returns. Nifty ought NOT to go down below the 5700 it tested on 11-1-11 a remarkable date indeed. Although it won’t be a straight line up from here, 2011 should see new highs sooner than people (and especially “analysts”) expect!
And certainly the prospects of a 5500 or 5300 that specialists talk about seem REMOTE. Unless DIIs also sell (dump?) like the FIIs did! Slim chance, since the BIG ones (DIIs) like the LIC will want up, as will GOI for IPO and FPOs lined up!
The trade is UP. Go long at dips. Even better, trade Nifty-ETF : Nifty BeES.
My trading system gave the BUY signal well in time. Don’t you agree? Intraday Nifty chart 12/01/2011 below [1 green = buy; 2 red = Sell]:
Trade safely!
@niftygroup @jsvasan
FB: Nse Nifty Trader
The real voyage of discovery consists not in seeking new landscapes but in having new eyes. - Marcel Proust
