Nifty Outlook for 25th June 2010

Yesterday, on the daily charts, NIFTY made a Doji Candlestcik, signaling the presence of uncertainty in the markets. Till the second half of the trading session, markets were very range bound (was only 14-15 points positive) and only stock specific movements were observed. For the day, NIFTY made a high of 5348.30. In the second half, after the opening of European Markets, markets observed a good selling pressure and made a low of 5284.55, but it didn’t break its important support of 5280. NIFTY again bounced back during the closing hour, with heavyweights showing good strength.  Finally, for the day NIFTY managed to close at 5320.60, again the closing above 5315 levels.

As expected, profit booking was seen in the stocks due to F&O Expiry. Markets may be a bit range bound tomorrow, with announcement of US GDP Data to be in evening. A good trading momentum will be observed in Sector Specific and other specific stocks, but then too traders should follow a cautious approach by following strict Stop Losses. 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.

20-Days EMA (Exponential Moving Average) has crossed the 50-Days SMA (Simple Moving Average), giving a positive clue for short term. MACD (Moving Average Directional Index) and RSI (Relative Strength Index) have turned positive. 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 5345 / 5365 / 5385 levels. At the same time, 5300 / 5280 / 5268 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 62.67 and 60.59, respectively.
2. MACD (26 Days & 12 Days): Their Values are 66.35 and 38.43, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 30.69, -DI: 18.82, ADX: 20.92: 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 5139.31 and 5193.11. 

Stocks in Focus: 

CANBK                      One may go long only if it trades above 432 for the targets of 435 & 436, with the Stop Loss of 430.

BANKBARODA        One may go short only if it trades below 685 for the target of 670, with the Stop Loss of 695.