Nifty Outlook for 08th July 2010

Yesterday, on the Daily Charts NIFTY made a Long Black Candlestick, which signals that the prices declined significantly following the opening showing that sellers were aggressive. NIFTY opened very flattish with 11-15 points of negative bias. Markets witnessed a profit booking, with good selling pressure due to which NIFTY made a low of 5233.45 for the day. All the stocks which buzzed day before yesterday, witnessed a good profit booking. NIFTY shredded off all the gains, which led it to the day’s high of 5297.45 day before yesterday. Finally, for the day NIFTY closed at 5241.10.

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 5265 / 5285 / 5300 levels. At the same time, 5225 / 5200 / 5180 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 51.94 and 55.15, respectively.
2. MACD (26 Days & 12 Days): Their Values are 37.83 and 53.19, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 21.92, -DI: 16.06, ADX: 16.41: 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 5140.60 and 5236.18.

Stocks in Focus:

APOLLOTYRE         One may go long only if it trades above 68.40 for the targets of 70.30 & 70.80, with tight Stop Loss of 67.

SRF                            One may go long only if it trades above 240 for the targets of 244 & 246, with tight Stop Loss of 237.