Nifty Outlook for 04th June 2010

Yesterday, on the daily charts, NIFTY made a White Opening Marubozu Candlestick, which signifies strength in the market, which was particularly led by the banks and mid cap stocks. NIFTY had a gap up opening of almost 70 points and was range bound for whole of the trading session, between which it made a high of 5125.70, but was not able to cross it which is a strong resistance for NIFTY. In the second half of the trading session too market was not able to get a push back from the strong opening of the European Markets (almost 1.5-2%).  Finally, NIFTY closed at 5110.50 for the day. Yesterday, NIFTY also crossed its 20-Days EMA (Exponential Moving Average) of 5046.11 too.

On the Weekly Charts too, NIFTY is signaling a cautious approach towards the markets in coming days, as it is taking strong support at 40-Days EMA of 4935.98, which if breaches decisively will call for a Major Correction.

The 50-Days SMA (Simple Moving Average) level is acting as strong resistance level for NIFTY. MACD (Moving Average Directional Index) and RSI (Relative Strength Index) are now turning in the positive zone. Traders may take delivery basis position in the stocks turning from their oversold territory and make smart gains, with a bounce in market, expected to come if NIFTY crosses its 20-Days SMA (Simple Moving Average) successfully.

For the day, intraday resistance for NIFTY comes at 5135 / 5150 / 5175 levels. At the same time, 5095 / 5065 / 5040 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 52.77 and 45.64, respectively.
2. MACD (26 Days & 12 Days): Their Values are -37.88 and -65.07, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 25.92, -DI: 30.70, ADX: 28.01: 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 5173.80 and 5046.11. Both the Moving Averages are now acting as Strong Resistance levels for NIFTY.

Stocks in Focus:

CROMPGREAV      Buy only above 252 for the Target of 256, with the Stop Loss of 249.

HDIL                        Accumulate only above 235 for the Target of 260 & 270, with the Stop Loss of 220.

LICHSGFIN            Buy only above 975 for the Target of 990 & 1000, with the Stop Loss of 963.

MPHASIS                Buy only above 580 for the Target of 591 & 605, with the Stop Loss of 570.

RELCAPITAL         Buy at the levels of 677-678 for the Target of 700, with the Stop Loss of 660.