Nifty Outlook for 29th September 2010

On the Daily Charts, NIFTY made a Doji Candlestick, indicating the presence of uncertainty in the markets. Much muted session was witnessed till the second half of the trading session; no major movement was witnessed in any of the Sector too. A very quiet starting was witnessed in the markets. For the day, NIFTY made a high of 6049.80 while a low of 5991.30 and breached the levels of 6000, with the opening of the European Markets. It can be said that the muted session converted into a volatile session after the opening of the European Markets.  For the day, at the end NIFTY closed at 6029.50.

A bit of skittish session may be witnessed, as F&O Expiry is nearing. A good set of economic data are going to be announced in Japan like, Industrial Production and Retail Trades and in Europe, i.e. EMU’s Consumer Confidence, Economic Confidence and Industrial Confidence and Current Account Balance and Q2 GDP). 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) 5575.22 and the 20-Days EMA (Exponential Moving Average) of 5821.89. 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 6035 / 6050 / 6075 levels. At the same time, 5980 / 5960 / 5945 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 77.40 and 76.89, respectively.
2. MACD (26 Days & 12 Days): Their Values are 146.53 and 130.33, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 38.34, -DI: 10.46, ADX: 45.31: 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 5575.22 and 5821.89.

Pre - Market Calls:

M&M                  Buy at the levels of 712 for the Targets of 726 & 730, with the strict Stop Loss of 706.

BANKINDIA        Buy at the levels of 516 for the Targets of 526 & 530, with the strict Stop Loss of 506.

CASTROL             Buy only if it trades above 513 for the Targets of 527 & 530, with the strict Stop Loss of 500.