Nifty Outlook for 14 May 2010

Yesterday, on the daily charts, NIFTY made a High Wave Candlestick Candlestick Pattern, which shows a great amount of indecision in the markets. This may be marked as a second indecisive High Wave Pattern on the Charts. A group of high wave candlesticks signal a possible reversal in the market. NIFTY opened in green with the positive bias of 50 points, and went up to 5212.70, and in the second half of the trading session it shredded off the day’s gains by making a low of 5147.95. Finally, NIFTY managed to close at 5178.90.

Both the 20-Days EMA (Exponential Moving Average) and 50-Days SMA (Simple Moving Average) levels are now acting as resistance levels for NIFTY, which it yesterday failed to break. Today’s closing again below these levels will prove the presence of underlying weakness in the markets. RSI (Relative Strength Index) and MACD (Moving Average Directional Index), are giving SELL signal along with the rising volumes, hence traders are suggested to trade cautiously by following Strict Stop Losses and avoid making fresh investments at this point of time.

For the day, intraday resistance for NIFTY comes at 5215 / 5240 / 5265 levels. At the same time, 5165 / 5140 / 5115 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 48.37 and 45.26, respectively.
2. MACD (26 Days & 12 Days): Their Values are -25.76 and -16.77, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 20.87, -DI: 27.34, ADX: 24.21: The Negative Directional Index has gained strength over the Positive Directional Index and also the Average Directional Index is now above 20, indicating strength in the current trend.
4. SMA (50 Days) & EMA (20 Days): The values of these two indicators are 5218.13 and 5192.67. Both the Moving Averages are now acting as Strong Resistance levels for NIFTY. 

Stocks in Focus:

FEDERALBNK                               Buy above 288 for the Target of 295, with the Stop Loss of 282.

ONGC                                               Buy above 1049 for the Target of 1065, with the Stop Loss of 1035.

NTPC                                                Buy above 208 for the Target of 212, with the Stop Loss of 205.

SESAGOA                                     Sell below 390 for the Target of 372 & 365, with the Stop Loss of 402.

NAGARCONST                           Sell below 166 for the Target of 162, with the Stop Loss of 169.

MCDOWELL-N                           Sell below 1220 for the Target of 1120, with the Stop Loss of 1240.