Nifty Outlook for 07th July 2010

Yesterday, on the Daily Charts NIFTY made a Long White Candlestick, which signals that the prices advanced significantly from open to close during the day under strong buying pressure and buyers were aggressive. NIFTY opened very flattish with 3-5 points of positive bias. With a good up move in Asian Markets and stellar opening of European Markets, NIFTY had a good northwards movement. Buying attraction was visible in major Blue Chips and a bit of selling pressure was witnessed in the Fertilizer Stocks. NIFTY rejoiced the global rally and made a high of 5297.45. Finally, for the day NIFTY closed at 5289.05.

A good trading momentum will be observed in Sector Specific and other specific stocks, as results season has arrived but then too traders should follow a cautious approach by following Strict Stop Losses. 5180 is the major Support which has to be breached to prove the weakness, and unless the NIFTY is trading above this level, the Markets are positive. 

NIFTY again took the support of its 20-Days EMA of 5235.66, by making a low of 5231.50 for the day, but managed to close well above it. 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 5300 / 5315 / 5330 levels. At the same time, 5265 / 5250 / 5230 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 56.19 and 55.95, respectively.
2. MACD (26 Days & 12 Days): Their Values are 42.61 and 56.36, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 23.37, -DI: 17.12, ADX: 16.48: 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 5140.09 and 5235.66.

Stocks in Focus:

BHARTIARTL           One may go long only if it trades above 272 for the targets of 278 & 280, with tight Stop Loss of 268.

UNIPHOS                   One may go short only if it trades below 174 for the targets of 170, with tight Stop Loss of 177.