Nifty Outlook for 30th September 2010

On the Daily Charts, NIFTY made a Long Black Candlestick, and tested the important support of 5975 for the day. A mute opening was witnessed at the counter, but in few minutes after the opening NIFTY made a high of 6071.55. For whole of the trading session, NIFTY traded very range bound, sliding southwards and made a low of 5979.65. A very volatile session was witnessed as F&O Expiry was on the very next day. For the day, NIFTY made a low of 5979.65 and ended at 5991.30.

A bit of skittish session may be witnessed, as its Last Thursday of the Month (the F&O Expiry Day) and also the D-Day for 60-Years old Ayodhya Issue. A good set of economic data are going to be announced in Japan (Vehicle Production, Housing Starts, Construction Orders) in Germany (Unemployment Change) and in US (Initial & Continuous Jobless Claims). 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) 5587.68 and the 20-Days EMA (Exponential Moving Average) of 5838.03. 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, 5975 / 5960 / 5945 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 71.82 and 75.87, respectively.
2. MACD (26 Days & 12 Days): Their Values are 141.80 and 135.32, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 37.00, -DI: 9.50, ADX: 46.29: 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 5587.68 and 5838.03.