Nifty Outlook for 04th August 2010

Yesterday, on the Daily Charts NIFTY made Small White Candlestick, representing a bit of profit booking after making a high of 5459.20 at the opening of trading session. For the whole of the trading session till the second half, NIFTY traded very range bound in about 20 points only. After the opening of the European Markets, NIFTY dipped a bit and made a low of 5426.40 for the day. Market witnessed a good sector and stock specific movement. Finally for the day, NIFTY closed at 5439.55.

A good trading momentum may be witnessed in the Tech and Pharmaceutical Stocks. 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. 

5315 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. 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 5440 / 5460 / 5475 levels. At the same time, 5416 / 5400 / 5380 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 59.96 and 59.01, respectively.
2. MACD (26 Days & 12 Days): Their Values are 42.94 and 50.59, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 22.76, -DI: 14.47, ADX: 25.88: 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 5259.80 and 5381.44.

Stocks in Focus:

HCL-INSYS                    One may go for long, only if it trades above 109 for the target of 112.90, with Strict Stop Loss of 106.60.

WOCKPHARMA           One may go for long, at the levels of 155-156 for the targets of 164 & 166, with Strict Stop Loss of 149.

CMC                                   One may go for short, only if it trades below 1680 for the targets of 1660 & 1650, with Strict Stop Loss of 1692.