Nifty Outlook for 10th August 2010

Yesterday, on the Daily Charts NIFTY made a Long White Candlestick, which signifies that the bulls won the game against the bears, by making a high of 5492.30 for the day. Markets had a very flattish opening with a positive bias of around 7-10 points. For the whole day, NIFTY climbed and made a new 52-week high. Germany’s exports rose by 3.8% in June as compared to May, this led to a good up run in the European as well as Indian Markets. For the NIFTY made a low of 5433.25. A good buying interest was witnessed in the CEMENT and TEXILES Sector too, other than this a sector specific movement was also witnessed. Finally for the day, NIFTY closed at 5486.15.

A good trading momentum may be witnessed in the TECH, CEMENT and TEXTILES Stocks. A bit of range bound session may be witnessed tomorrow, as US Federal Reserve is going to announce its interest rate decision late in the evening. 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. 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 5500 / 5520 / 5550 levels. At the same time, 5460 / 5430 / 5400 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 63.01 and 60.13, respectively.
2. MACD (26 Days & 12 Days): Their Values are 44.25 and 44.98, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 23.10, -DI: 12.60, ADX: 26.34: 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 5295.14 and 5407.61.

Stocks in Focus:

WELCORP                     One may go for long, only if it trades above 254 for the targets of 258 & 260, with Strict Stop Loss of 250.

STER                               One may go for long, only if it trades above 180 for the targets of 185 & 186, with Strict Stop Loss of 175.

SESAGOA                      One may go for long, only if it trades above 376.50 for the targets of 390 & 392, with Strict Stop Loss of 362.