Nifty Outlook for 15th September 2010

Yesterday, NIFTY made a Shooting Star Pattern, after a continuous rise of last six trading sessions. This pattern indicates that though the market opened with a gap from the previous day and made a good high, but it could not sustain well to keep up the trend. NIFTY again opened with a Gap of around 30-40 points. For the day, NIFTY made a high of 5838.45 with majority of the heavyweights like MARUTI, STER, JPASSOCIAT, RELCAPITAL, TATAMOTORS, TCS, WIPRO, INFOSYSTCH, KOTAKBANK, SUZLON and DLF. As expected a good profit booking was witnessed in the BANKING Stocks. Other than this, OMCs also had an appreciable run up for the day. NIFTY took a support of 5760.30 for the day and did not even breach its important support of 5755. Finally for the day, it ended at 5795.55, making it again a robust closing for the day.

A bit of profit booking may be witnessed in the next trading session. As RBI (Reserve Bank of India) is going to present its Credit Policy Review on the other day (Thursday), a good trading momentum can be witnessed in the Interest Rate Sensitive Sectors like BANKING, REALTY & INFRA and AUTOMOBILE. 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) 5453.42 and the 20-Days EMA (Exponential Moving Average) of 5555.61. As long as NIFTY is trading above 5650 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 5820 / 5840 / 5875 levels. At the same time, 5780 / 5760 / 5735 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 77.35 and 66.72, respectively.
2. MACD (26 Days & 12 Days): Their Values are 73.67 and 35.46, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 44.79, -DI: 12.23, ADX: 25.05: 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 5453.42 and 5555.61.

Pre - Market Calls:

MRPL                  Buy only if its trades above 80.90 for the Target of 82.50, with the strict Stop Loss of 79.40.

JPASSOCIAT       Buy at the level of 127 for the Targets of 130.70 & 131.70, with the strict Stop Loss of 125.

BPCL                    Buy only if it trades above 778 for the Targets of 798 & 800, with the strict Stop Loss of 767.