Nifty Outlook for 14th September 2010

Yesterday, NIFTY made a White Opening Marubozu Candlestick on the Daily Charts, showing a good strength in the markets. It was a Gap up Opening for the markets of about 40-50 points, with the strong and supportive Global Cues. An excellent run up witnessed yesterday was the Cumulative Impact of good set of Economic Data announced in Asian Markets. India’s Industrial output rose in July 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. The rally was particularly led by BANKING Sector worldwide as new bank capital requirements agreed by global regulators brought relief to Asia's financial sector, as fears lenders might be forced into fresh capital raising were put to rest. All these factors were the major reason for the overwhelming up run witnessed in the markets, which led the NIFTY to the day’s high of 5770.60. TEXTILE and REALTY & INFRA Stocks also showed a good run up. Finally, for the day, NIFTY closed at 5760.00, making it a robust closing for the day.

A bit of profit booking with a muted session may be witnessed in the next trading session. A good set of economic numbers are going to be announced in Japan (July’s Industrial Production and Capacity Utilization), in UK (Consumer Price Index, July’s Industrial Production) and in US (the Retail Sales Numbers). 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) 5442.23 and the 20-Days EMA (Exponential Moving Average) of 5530.36. As long as NIFTY is trading above 5550 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 Convergence Divergence) 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 5785 / 5800 / 5820 levels. At the same time, 5735 / 5715 / 5680 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 75.72 and 64.07, respectively.
2. MACD (26 Days & 12 Days): Their Values are 60.08 and 28.75, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 40.85, -DI: 13.38, ADX: 22.58: 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 5442.23 and 5530.36.

Pre - Market Calls:

CENTURYTEX      Buy only if its trades above 530 for the Targets of 542 & 545, with the strict Stop Loss of 520.

JETAIRWAYS      Buy at the level of 790 for the Targets of 809 & 814, with the strict Stop Loss of 776.

DLF                      Buy only if it trades above 335 for the Targets of 341 & 343, with the strict Stop Loss of 329.