Nifty Outlook for 01st September 2010

Yesterday, on the Daily Chart, NIFTY made a Bullish Hammer Candlestick, indicating the reduction of previous bearish sentiment causing the short traders to feel increasingly uneasier with their bearish positions. NIFTY opened flat with negative bias of 15-20 points, and kept dragging till the announcement of Q1 GDP Numbers, which were at 8.8% Vs 8.6% (QoQ). NIFTY traded southwards due to negative global cues as yesterday night US President, Barack Obama urged Congress to quickly pass a jobs bill as "too many" Americans are continuing to look for work and at the same time YEN against appreciated against the DOLLAR, which led a selloff in Asian as well as the European Markets. After the opening of European Markets too, NIFTY continued its southward direction and made a low of 5348.90 for the day. After testing the important support of 5350, NIFTY against bounced back and recovered from day’s low ending at 5402.40.

A bit of flattish session is expected tomorrow. Only Stock and Sector specific momentum will be observed as markets are trading range bound. Traders are suggested to follow very cautious approach by following Strict Stop Losses in Intraday Trading.

NIFTY has broken both its 20-Days EMA (Exponential Moving Average) and 50-Days SMA (Simple Moving Average) of 5446.81 and 5348.90, respectively. If a deep insight is taken, NIFTY breached its important support of 5350 after making a low of 5348.90, but at the same time it bounced back and maintained to close above 5400 levels. For the coming trading sessions, NIFTY may trade very volatile and if closes below 5350 for continuous 2-3 trading session, will invite good selling pressure and at the same time will attract investors to invest in heavily beaten down stocks.

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 5425 / 5450 / 5480 levels. At the same time, 5380 / 5350 / 5320 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 45.68 and 52.12, respectively.
2. MACD (26 Days & 12 Days): Their Values are 13.28 and 31.26, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 16.04, -DI: 25.63, ADX: 19.93: 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 53395.77 and 5446.81.

Stocks in Focus:

ICICIBANK          Buy only if it trades above 982 for the Targets of 997 & 1000, with the strict Stop Loss of 972.

IVRCLINFRA       Buy only if it trades above 158 for the Targets of 161 & 162, with the strict Stop Loss of 155.20.

JINDALSTEL        Sell only if it trades below 676 for the Targets of 664 & 660, with the strict Stop Loss of 686.