Nifty Outlook for 17 May 2010

Yesterday, on the daily charts, NIFTY made a Long Black Candlestick, which indicates a strong selling pressure and the presence of panic in the markets. NIFTY opened flat in the morning at 5180.55, till the first half of trading session it was subdued and in the second half selling pressure was witnessed with the opening of European Markets. After the announcement of Spain’s negative inflation data, markets slipped around 108 points in the last hour of trade and slipped till 5070.95.

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 failed to break in the last week. 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 5115 / 5145 / 5165 levels. At the same time, 5045 / 5020 / 5000 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 42.31 and 44.67, respectively.


2. MACD (26 Days & 12 Days): Their Values are -30.14 and -21.60, respectively. a negative crossover is indicated by both the Moving Averages.


3. +DI: 18.66, -DI: 31.13, ADX: 24.27: 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 5219.66 and 5183.22. Both the Moving Averages are now acting as Strong Resistance levels for NIFTY.

Stocks in Focus:

NATIONALUM Sell below 404 for the Target of 397 & 394, with the Stop Loss of 409.

GESHIP Sell below 306 for the Target of 302 & 300, with the Stop Loss of 309.

SINTEX Sell below 296 for the Target of 285, with the Stop Loss of 302.