Nifty Outlook for 08th September 2010

Yesterday, on the Daily Charts NIFTY made a Bearish Shooting Star Candlestick Pattern. NIFTY opened in green with almost 20-25 points of upside. A staircase upside was witnessed in the markets which led to a new 52-Weeks High of 5625.50. A stellar performance was witnessed in the CEMENT Counter (all the stocks were almost 5-20% positive). For all of the trading session Indian Markets outperformed all of the Global peers and remained in the positive territory. For the day, NIFTY made a low of 5571.65 and closed at 5604.00, making it almost 31-Months High.

A bit of profit booking with a muted session may be witnessed tomorrow, as Germany's manufacturing orders dropped 2.2% in July from the previous month, which raises questions on the strengths of Major European banks after the recent Stress Test. At the same time, a good set of Economic Data are going to be announced in Germany and UK, which are much awaited (Trade Balance, Industrial Production). Only Stock and Sector specific momentum will be observed as markets are trading range bound. Traders are suggested to follow very cautious approach by following Strict Stop Losses in Intraday Trading.

NIFTY is now trading above its 50-Days SMA (Simple Moving Average) 5418.09 and the 20-Days EMA (Exponential Moving Average) of 5479.91. As long as NIFTY is trading above 5470 levels, traders and investors are suggested to avoid positional shorts.

20-Days EMA (Exponential Moving Average) has maintained above the 50-Days SMA (Simple Moving Average), supporting the recent positive move. MACD (Moving Average Directional Index) and RSI (Relative Strength Index) have also maintained the positive trend. 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 5625 / 5640 / 5655 levels. At the same time, 5575 / 5550 / 5530 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 65.89 and 57.56, respectively.
2. MACD (26 Days & 12 Days): Their Values are 32.10 and 21.41, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 32.76, -DI: 17.19, ADX: 18.58: 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 5418.09 and 5479.91.

Stocks in Focus:

MOSERBAER      Buy only if it trades above 68.70 for the Targets of 70.90 & 72, with the strict Stop Loss of 67.70.

BGRENERGY      Buy only if it trades above 860 for the Targets of 885 & 911, with the strict Stop Loss of 848.

BALRAMCHIN    Buy only if it trades above 91.50 for the Target of 94.20, with the strict Stop Loss of 89.90.