Nifty Outlook for 27th July 2010

Yesterday, on the Daily Charts, NIFTY made a Small Black Candlestick, after the formation of a Doji Candlestick, on the previous trading session. NIFTY opened by making a high of 5466.25, but could not sustain much at the above levels. A good selling pressure was witnessed in the Metals, Financials, Auto and Realty & Infra Sector, as the RBI (Reserve Bank of India) is going to announce its Credit Policy tomorrow. For the day, NIFTY made a low of 5409.20. Results of many Big Boys are to be announced in this week, which will further define the next move of the market. Hence, for the day, it closed at 5418.60 (making it a third continuous session to give closing above the levels of 5400).  

A range bound movement is expected in the next trading session. On the international front, in US, Deutsche Bank and British Petroleum are going to announce their quarterly results tomorrow. Hence, only Stock and Sector specific momentum will be observed as results season has arrived, but then too traders should follow a cautious approach by following Strict Stop Losses.

5250 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. If NIFTY closes above 5400 levels, for continuously two-three trading sessions, it may touch the levels of 5495 and 5500 in the coming days.

20-Days EMA (Exponential Moving Average) has crossed the 50-Days SMA (Simple Moving Average), supporting the recent positive move. 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 5430 / 5445 / 5460 levels. At the same time, 5400 / 5380 / 5365 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 60.70 and 61.49, respectively.
2. MACD (26 Days & 12 Days): Their Values are 56.47 and 55.35, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 26.03, -DI: 12.81, ADX: 28.75: 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 5202.59 and 5354.86.

Stocks in Focus:

BHARTIARTL                       One may go for long, at the levels of 321-322 for the targets of 332 & 335, with Strict Stop Loss of 315.

AUROPHARMA                    One may go for short, only if it trades below 917 for the targets of 905 & 897, with Strict Stop Loss of 931.

PATELENG                           One may go for short, only if it trades below 406 for the targets of 396 & 395, with Strict Stop Loss of 412.