Nifty Outlook for 23rd August 2010

On Friday, NIFTY made a Small Black Candlestick, having a higher lower shadow, as markets witnessed a selling pressure. NIFTY touched its 42-months high of 5545 by making a high of 5544.70 for the day. NIFTY opened flat with a negative bias and traded highly volatile for whole of the trading session. BANKING stocks witnessed a good profit booking, but at the same time METALS, REALTY & INFRA, and PHARMA sector outperformed the market. For the day NIFTY made a low of 5513.35 and closed at 5530.65.

A range bound session may be expected on Monday. A good amount set of Economic Data are to be announced in the Euro region, which may decide the further move of the market. Only Stock and Sector specific momentum will be observed as markets are trading range bound. Traders are suggested to follow a cautious approach by following Strict Stop Losses in Intraday Trading.

  

5365 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 5550 / 5565 / 5580 levels. At the same time, 5515 / 5500 / 5480 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 63.31 and 59.03, respectively.
2. MACD (26 Days & 12 Days): Their Values are 37.92 and 34.00, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 27.76, -DI: 13.98, ADX: 22.42: 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 5368.68 and 5443.39.

Stocks in Focus:

APOLLOTYRE          One may go for long, only if it trades above 72.60 for the targets of 74.30 & 74.50, with Strict Stop Loss of 71.45.

GLAXO                    One may go for long, only if it trades above 2037 for the targets of 2067 & 2075, with Strict Stop Loss of 2018.

ASHOKLEY              One may go for short, only if it trades below 69.30 for the target of 67.50, with Strict Stop Loss of 70.60.