Nifty Outlook for 04th October 2010

On Friday, NIFTY made a Long White Candlestick on the daily charts, and moved to 32-Months High of 6153.10. After a neutral decision on D-Day on the 60-years old Ayodhya Issue, investors were buoyed and a good buying interest was witnessed in METALS, REALTY & INFRA, BANKING & FINANCE, PHARMA, SUGAR, IT and AUTO (driven particularly by excellent sales numbers) Sectors. A muted starting of the trading session was marked with almost 15-20 points in the positive bias. For whole of the trading session, NIFTY continued its northwards move and gained almost 115-120 points for the day. For the day, NIFTY made a low of 6029.95 and ended the session at 6143.40.

Again a positive movement is expected in the markets for the next trading session. Chinese Markets will be closed till 07^th October, 2010 on the Occasion of National Day. A good sectoral movement will again be witnessed; hence, 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) 5614.32 and the 20-Days EMA (Exponential Moving Average) of 5883.65. 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 6175 / 6190 / 6200 levels. At the same time, 6115 / 6090 / 6050 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 78.76 and 76.13, respectively.
2. MACD (26 Days & 12 Days): Their Values are 145.26 and 141.70, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 39.80, -DI: 9.10, ADX: 47.95: 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 5614.32 and 5883.65.

Pre - Market Calls:

APOLLOTYRE                  Buy only if it trades above 85.20 for the Targets of 87.70 & 88.50, with the strict Stop Loss of 83.60.

VIDEOIND                      Buy only if it trades above 283.50 for the Targets of 289 & 292, with the strict Stop Loss of 281.

WOCKPHARMA             Buy only if it trades above 320 for the Targets of 330 & 336, with the strict Stop Loss of 311.