Nifty Outlook for 16th September 2010

Yesterday, NIFTY made a Long White Candlestick, keeping up the uptrend lasting since last seven trading sessions. For the continuous third trading session, NIFTY had a gap up opening of almost 20-30 points. For the day, NIFTY made a high of 5869.45 with majority of the heavyweights like MARUTI, RELIANCE, AXISBANK, RELCAPITAL, TCS, WIPRO, INFOSYSTCH, KOTAKBANK and GAIL. A bit of profit booking was witnessed in all the overbought Sectors like TEXTILES and OIL & GAS. Other than this, METAL and IT had an appreciable run up for the day. NIFTY took a support of 5792.20 for the day and did not even breach its important support of 5780. Finally for the day, it ended at 5860.95, making it again a robust closing for the day.

A choppy trading session may be witnessed tomorrow as RBI (Reserve Bank of India) is going to present its Credit Policy Review, 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) 5464.86 and the 20-Days EMA (Exponential Moving Average) of 5584.69. 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 5875 / 5890 / 5900 levels. At the same time, 5790 / 5775 / 5755 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 80.01 and 69.38, respectively.
2. MACD (26 Days & 12 Days): Their Values are 88.69 and 43.77, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 44.40, -DI: 11.20, ADX: 27.52: 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 5464.86 and 5584.69.

Pre - Market Calls:

STER                    Buy only if its trades above 175.60 for the Target of 178, with the strict Stop Loss of 173.

PUNJLLOYD        Buy at the level of 116.50 for the Target of 118.50, with the strict Stop Loss of 114.80.

Delivery Calls:

ABB                    Buy only if its trades above 800 for the Targets of 845 & 850 in next 15-20 days, with the strict Stop Loss of 785.

GAIL                   Buy at the level of 480 for the Targets of 512 & 517 in next 15-20 days, with the strict Stop Loss of 455.