Nifty Outlook for 09th September 2010

Yesterday, on the Daily Charts NIFTY made a Doji Candlestick Pattern, proving the presence of uncertainty in the markets. NIFTY opened flat in green with almost 10-15 points of upside. A muted session with a bit profit booking (which also made some of the trading counters extremely volatile) was witnessed. NIFTY again tested its important resistance of 5625 as yesterday, but could not even cross it. For the day, NIFTY made a low of 5567.75 and closed at 5607.85, making it almost 31-Months High.

A bit of profit booking with a muted session may be witnessed tomorrow, as a good set of Economic Data are going to be announced in Japan (Q2 GDP Data), UK (Trade Balance, BoE Interest Rate Decision) and US (August Trade Balance). 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) 5424.00 and the 20-Days EMA (Exponential Moving Average) of 5429.09. 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, 5580 / 5560 / 5535 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 66.18 and 59.28, respectively.
2. MACD (26 Days & 12 Days): Their Values are 38.41 and 21.98, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 38.41, -DI: 16.48, ADX: 19.39: The Positive Directional Index has gained strength over the Negative Directional Index and also the Average Directional Index is nearing 20, indicating the development of strength in the current trend.
4. SMA (50 Days) & EMA (20 Days): The values of these two indicators are 5424.00 and 5429.09.

Stocks in Focus:

HCLTECH             Buy only if it trades above 408 for the Targets of 414 & 416, with the strict Stop Loss of 405.

MAX                    Buy only if it trades above 166 for the Targets of 170 & 171.60, with the strict Stop Loss of 163.20.

IDBI                     Buy only if it trades above 136 for the Targets of 137.50 & 138.20, with the strict Stop Loss of 135.