Nifty Outlook for 19th August 2010

Yesterday, on the Daily Charts, NIFTY made a Long White Candlestick. NIFTY opened flat with a positive bias and then moved range bound. A good amount of short covering was seen in the stocks but NIFTY kept muted till the last hour of trading session. For the day, NIFTY made a low of 5414.15. In the last hour of the trading session, an excellent bounce was witnessed in the NIFTY from the day’s low which lifted it till the levels of 5487.95. Finally, for the day NIFTY closed at 5479.15. Sectors like FERTILIZERS & CHEMICALS, TECH, METALS, OMCs & BANKING (especially small banking stocks) showed a good upside.

A muted session may be witnessed tomorrow, as Euro Zone is going to announce it’s some of the Economic Data. 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 5480 / 5500 / 5520 levels. At the same time, 5460 / 5435 / 5415 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 59.26 and 56.27, respectively.
2. MACD (26 Days & 12 Days): Their Values are 28.11 and 35.60, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 23.67, -DI: 15.91, ADX: 20.75: 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 5351.22 and 5423.05.

Stocks in Focus:

FEDERALBNK          One may go for long, only if it trades above 350 for the targets of 356 & 358, with Strict Stop Loss of 345.

GAIL                           One may go for long, only if it trades above 463 for the targets of 468 & 470, with Strict Stop Loss of 459.

RANBAXY                One may go for long, only if it trades above 475 for the targets of 485 & 490, with Strict Stop Loss of 468.