Nifty Outlook for 21st September 2010

Yesterday, On the Daily Charts, NIFTY made a Long White Candlestick, proving the underlying strength in the Markets. For the day, NIFTY opened flat with a positive bias of 12-15 points and kept up the good run with METAL, TELECOM, CEMENT and SUGAR Stocks supporting the move. For whole of the trading session, a good northwards movement was witnessed. Many other Big Boys which were muted in this great upside movement also moved up like RELIANCE, ABB, LT, RPOWER, RCOM and RNRL. For the day, NIFTY made a low of 5884.95 and finally closed strongly at 5980.45.

A good sector wise momentum may be witnessed. A muted session may be witnessed as in US Federal Reserve is going to announce its Interest Rate Decision.  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) 5500.93 and the 20-Days EMA (Exponential Moving Average) of 5667.28. As long as NIFTY is trading above 5780 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) has also maintained the positive trend. But at the same time, RSI (Relative Strength Index) reverted from the overbought zone. Traders are suggested to trade cautiously in the markets, as markets have surpassed all the major resistances and have entered in the Over Bought Zone.

For the day, intraday resistance for NIFTY comes at 6000 / 6025 / 6040 levels. At the same time, 5965 / 5940 / 5925 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 81.18 and 73.84, respectively.
2. MACD (26 Days & 12 Days): Their Values are 120.75 and 73.64, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 45.51, -DI: 8.42, ADX: 34.91: The Positive Directional Index has gained strength over the Negative Directional Index and also the Average Directional Index is above 20, indicating the development of strength in the current trend.
4. SMA (50 Days) & EMA (20 Days): The values of these two indicators are 5500.93 and 5667.28.

Pre - Market Calls:

CIPLA                  Buy only if it trades above 316.50 for the Targets of 321 & 322, with the strict Stop Loss of 313.

HEROHONDA     Buy at the levels of 1831-1832 for the Targets of 1850 & 1860, with the strict Stop Loss of 1820.

INDIACEM          Buy at the level of 120 for the Targets of 122.60 & 123, with the strict Stop Loss of 119.