Nifty Outlook for 30th July 2010

Yesterday, on the Daily Charts, NIFTY made a Small Black Candlestick. For the whole trading session, NIFTY traded very range bound (only in the range of 20 points). Results season and F&O Expiry overlapped the movement of market. RELIANCE was again crashed due to sentimental reasons. A good run up was witnessed in the Financial Stocks. But till the ending of trading session, NIFTY managed to close above the levels of 5400 again at 5408.90.  For the day NIFTY made a high of 5415.85 and a low of 5381.55, bouncing back again from its important intraday support of 5380.

A positive movement may be witnessed tomorrow. However, US is about to announce its First Estimate of 2^nd Quarter GDP, hence, after the second half of the trading session, markets may trade a bit skittish. Only Stock and Sector specific momentum will be observed as results season is running, but then too traders should follow a cautious approach by following Strict Stop Losses. 

5330 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. It was the fourth continuous closing of NIFTY above 5400 levels; hence it may touch the levels of 5500 too in the coming sessions, continuing the positive trend.

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 5416 / 5430 / 5450 levels. At the same time, 5395 / 5380 / 5360 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 58.27 and 60.18, respectively.
2. MACD (26 Days & 12 Days): Their Values are 48.97 and 54.27, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 21.91, -DI: 13.95, ADX: 28.25: 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 5228.66 and 5369.59.

Stocks in Focus:

BANKBARODA                    One may go for long, only if it trades above 740 for the target of 750, with Strict Stop Loss of 730.

CANBK                                  One may go for long, only if it trades above 488 for the targets of 492 & 500, with Strict Stop Loss of 480.

STER                                      One may go for long, only if it trades above 180 for the target of 183.50, with Strict Stop Loss of 177.50.