Nifty Outlook for 21st June 2010

On Friday, NIFTY made a Doji Candlestick on the Daily Charts, signaling the presence of uncertainty in the markets. NIFTY opened very flat with the positive bias of around 5 to 7 points. Markets were very skeptical, as the investors were expecting some important announcements from Mr. Mukesh Ambani on the 36^th AGM (Annual General Meeting) of Reliance Industries, after the patch up between Ambani Brothers. Last week, the ADAG Group stocks (RELCAPITAL, RELINFRA, RCOM, RPOWER, RNRL, RELMEDIA) were a major part of the continuous four trading sessions rally. On the last day of the week, a good profit booking was observed in all these stocks. NIFTY made a high of 5302.30 for the day, but failed to cross its important resistance of 5300. After the Reliance’s AGM, a good profit booking was seen which dragged NIFTY till 5245.50 levels. In the second half, of the trading session, markets stabilized a bit and NIFTY hovered in the range of just 10 to 20 points. Finally, for the day NIFTY closed at 5262.60.

A bit of profit booking is expected on Monday’s trading session. 5315 is the major resistance to be crossed by NIFTY to prove a real bull run in the markets. Closing above this level for continuous 2-3 trading sessions will support this view.

MACD (Moving Average Directional Index) and RSI (Relative Strength Index) have turned positive. As long as NIFTY closes above 5175 levels, it may prove this rally to be a true one and the news based one. Traders may take delivery basis position in the stocks turning from their oversold territory and make smart gains.

For the day, intraday resistance for NIFTY comes at 5300 / 5325 / 5350 levels. At the same time, 5230 / 5200 / 5185 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 61.13 and 56.72, respectively.
2. MACD (26 Days & 12 Days): Their Values are 39.96 and 1.51, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 31.03, -DI: 21.31, ADX: 19.59: 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 5139.00 and 5127.04. 

Stocks in Focus:

BANKBARODA        One may go short only if it trades below 701 for the target of 692, with the Stop Loss of 709.

BOMDYEING             One may go short only if it trades only below 495 for the target of 485, with the Stop Loss of 501.