Nifty Outlook for 14th June 2010

On Friday, on the daily charts, NIFTY made a White Opening Marubozu Candlestick, signaling that it was a typical bull day and strength of the bulls is enough to cause some concern among the bears. NIFTY had a positive opening of about 60 to 70 points with flattish global cues with positive bias. Markets made a high of 5139.05 before the announcement of Monthly IIP Data, which was (17.4% Vs 13.5% on monthly basis), but after the announcement of data, a selling pressure was observed in reality and small banking stocks, which drag the NIFTY to the day’s low of 5078.75. Not much of the global cues were helpful to make the markets a decided move. Finally, for the day NIFTY closed at 5119.35. For the next day, markets seem to be positive, which may help investors to earn good intraday gains.

Now if NIFTY closes above 5150 levels for the next 2-3 consecutive trading sessions, it may touch the levels of 5215 and 5235 in a short time.

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 5139.05 and closed at 5119.35 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 5150 / 5185 / 5200 levels. At the same time, 5100 / 5085 / 5045 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 53.69 and 48.91, respectively.
2. MACD (26 Days & 12 Days): Their Values are -13.65 and -31.60, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 25.28, -DI: 27.95, ADX: 22.75: 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 5149.26 and 5052.54. Both the Moving Averages are now acting as Strong Resistance levels for NIFTY.

 Stocks in Focus:

AXISBANK     One may go long only above 1260 for the target of 1280 & 1286, with the Stop Loss of 1242.

BHEL              One may go long only above 2400 for the target of 2420 & 2426, with the Stop Loss of 2388.

BHUSANSTL            One may go long only above 1375 for the target of 1395 & 1410, with the Stop Loss of 1353.

BHEL              One may go long only above 2400 for the target of 2420 & 2426, with the Stop Loss of 2388.

WOCKPHARMA One may go long only above 136 for the target of 139 & 141, with the Stop Loss of 133.50.

BPCL              One may short only below 538 for the target of 532, with the Stop Loss of 542.

GAMMONIND One may short only below 194 for the target of 192, with the Stop Loss of 196.