Nifty Outlook for 28th September 2010

On the Daily Charts, NIFTY made an Inverted Hammer Candlestick, showing a reversal signal in the markets. Markets as expected had a gap up opening, with almost 30-35 points with the positive bias. NIFTY made a high of 6073.50, with METALS and REALTY & INFRA Stocks keeping up their northwards movement. For whole of the trading session, NIFTY moved very range bound with only 15-20 points of upside movement. A bit of profit booking was witnessed in some of the BANKING & FINANCE Stocks. For the day, it made a low of 6018.30, and did not even breach the level of 6000, hence keeping supporting the present strength in the markets. In last week, NIFTY faced the resistance of 6032.80 and 6037.40, respectively and yesterday it was able to close above the level of 6030 at 6035.65, hence, giving a strong clue for the next trading sessions too.

A bit of skittish session may be witnessed tomorrow. A good set of economic data are going to be announced in UK (Current Account Balance and Q2 GDP) and in US (Consumer Confidence Data), which may define the further move of the markets. Again 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) 5562.36 and the 20-Days EMA (Exponential Moving Average) of 5800.04. NIFTY is continuously showing good strength, and in the long term may also touch the levels of 6200.

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 6050 / 6075 / 6095 levels. At the same time, 6020 / 6000 / 5980 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 78.31 and 76.76, respectively.
2. MACD (26 Days & 12 Days): Their Values are 146.55 and 123.91, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 40.77, -DI: 8.19, ADX: 44.39: 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 5562.36 and 5800.04.

Pre - Market Calls:

JSWSTEEL           Buy only if it trades above 1328 for the Targets of 1340 & 1345, with the strict Stop Loss of 1318.

HINDZINC           Buy only if it trades above 1135 for the Target of 1150, with the strict Stop Loss of 1122.

GLENMARK        Buy only if it trades above 300 for the Targets of 306 & 310, with the strict Stop Loss of 294.