Nifty Outlook for 07th June 2010

On Friday, on the daily charts, NIFTY made a Spinning Top Candlestick, which signifies the presence of a lot of uncertainty in the markets. Markets are unable to decide the next move at this point of time and are purely news driven. For the day NIFTY made a high of 5147.90 and a low of 5091.60. On Friday evening, Hungary’s new Government announced about its debt crisis, which was the reason of bloodbath in the European markets, also the US Markets battered on the weak Job Data. Both of these pieces of news are yet to be discounted in the Asian markets, hence a good selloff may be seen on Monday. 

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, which it also tried to touch on Friday, but was unable to do and made a high of only 5147.90 and closed at 5135.50 for the session. 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 5160 / 5185 / 5200 levels. At the same time, 5095 / 5070 / 5040 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 54.20 and 47.35, respectively.
2. MACD (26 Days & 12 Days): Their Values are -26.31 and -59.94, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 26.51, -DI: 29.36, ADX: 26.37: 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 5172.01 and 5054.63. Both the Moving Averages are now acting as Strong Resistance levels for NIFTY.

Stocks in Focus:

ABIRLANUVO       Accumulate only above 750 for the Target of 788 & 790, with the Stop Loss of 735.      

The stock can still be accumulated above the given levels for long term (6-12 months period) for higher targets.

BAJAJHIND           Accumulate only above 112 for the Target of 120, with the Stop Loss of 105.

The stock can still be accumulated above the given levels for long term (6-12 months period) for higher targets.

HINDPETRO          Buy only above 372 for the Target of 382, with the Stop Loss of 336.