Nifty Outlook for 24th August 2010

Yesterday, on the Daily Charts, NIFTY made a Small White Candlestick, having a higher lower shadow. NIFTY traded highly range bound throughout the trading session. It opened flat with a positive bias, with just 15-20 points positive. NIFTY touched crossed its 42-months high of 5545 by making a high of 5549.80 for the day. BANKING stocks witnessed a good profit booking, but at the same time METALS, TEXTILE, OMCs and SUGAR sectors outperformed the market. For the day NIFTY made a low of 5519.40 and closed at 5543.50.

A range bound session is expected tomorrow. A good trading momentum can be witnessed in the OMCs again, as Petrol Prices may be hiked by `1.00 by this weekend and at the same time in the EXPORT FOCUS Sectors, like, JEWELLERY, LEATHER, TEXTILE, CHEMICALS, etc. 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, 5525 / 5500 / 5480 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 64.45 and 60.11, respectively.
2. MACD (26 Days & 12 Days): Their Values are 41.38 and 33.79, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 27.07, -DI: 13.42, ADX: 23.22: 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 5375.59 and 5452.92.

Stocks in Focus:

ABIRLANUVO         One may go for long, only if it trades above 840 for the targets of 852 & 860, with Strict Stop Loss of 828.

BHARTIARTL           One may go for long, only if it trades above 320 for the targets of 326 & 328, with Strict Stop Loss of 316.