Nifty Outlook for 24th September 2010

On the Daily Charts, NIFTY made a Short Black Candlestick, after making a Doji Candlestick Pattern yesterday. NIFTY had a muted opening with a negative bias of almost 10-15 points. A good selloff or say profit booking was witnessed in the markets. For the day, NIFTY slid almost 50 points till the level of 5932.40 (day’s low), as the PMI numbers announced in EMU were at seven-month low. REALTY & INFRA, The RELIANCE Pack, TELECOM, SUGAR, TEXTILE saw a good selling pressure. A bit of volatile session was witnessed in the mid of the trading session. In the last hour of trading session, NIFTY again bounced from the day’s low, as Supreme Court (SC) deferred the Ayodhya Verdict to 28^th September, 2010 from 24^th September, 2010. For the day, NIFTY posted a closing of 5959.55.

A bit of selling pressure may be witnessed tomorrow, due to profit booking. Chinese markets will be witnessing trading holiday tomorrow. A good sector wise momentum may be witnessed. 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) 5536.73 and the 20-Days EMA (Exponential Moving Average) of 5749.65. As long as NIFTY is trading above 5880 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 5970 / 5990 / 6015 levels. At the same time, 5930 / 5905 / 5875 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 75.13 and 76.06, respectively.
2. MACD (26 Days & 12 Days): Their Values are 140.01 and 106.51, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 39.26, -DI: 9.40, ADX: 41.12: 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 5536.73 and 5749.65.

Pre - Market Calls:

CROMPGREAV               Buy only if it trades above 321 for the Targets of 327 & 330, with the strict Stop Loss of 315.

KOTAKBANK                 Sell at the level of 485 for the Target of 475, with the strict Stop Loss of 491.