Nifty Outlook for 13th September 2010

On Friday, NIFTY made a White Candlestick on the Daily Charts. Keeping up the uptrend NIFTY moved towards a new high of 5647.45. For the day, it opened flat with the positive bias of 20 points. For whole of the trading session, Markets traded very sideways with METAL & MINING Stocks beaten down till the second half of trading session. After the opening up of the European Markets, NIFTY bounced back from the day’s low of 5608.10, upside particularly led by BANKING Sector. Other than that, FERTILIZER, CHEMICAL & SUGAR Stocks also showed a good run up. Finally, for the day, NIFTY closed at 5640.05, making it a real strong closing for the day.

A good tussle may be witnessed between the Buyers and the Sellers in the next trading session, as India announced its Industrial output for July, which rose to 13.8 percent from a year earlier, sharply higher than the previous month's 7.1 percent. At the same time, Japan also announced its Q2 GDP, which was as expected by the markets. On the other side, China also came out with good set of economic data like industrial output, fixed asset investment, along with consumer and wholesale-price inflation data. China's central bank could be planning an announcement on interest rates before markets open on Monday in response to what could be surging inflation. 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 has moved much above its 50-Days SMA (Simple Moving Average) 5431.77 and the 20-Days EMA (Exponential Moving Average) of 5506.18. As long as NIFTY is trading above 5525 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 5650 / 5675 / 5688 levels. At the same time, 5625 / 5605 / 5588 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 68.64 and 61.15, respectively.
2. MACD (26 Days & 12 Days): Their Values are 45.49 and 24.22, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 31.75, -DI: 15.69, ADX: 20.42: 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 5431.77 and 5506.18.

Premarket Calls:

HCLTECH             Buy at the level of 410 for the Targets of 416 & 418, with the strict Stop Loss of 406.

M&M                  Buy only if it trades above 658 for the Targets of 671 & 674, with the strict Stop Loss of 651.

ADANIENT          Buy at the level of 661 for the Targets of 674 & 678, with the strict Stop Loss of 650.