Nifty Outlook for 08th October 2010

Yesterday, on the Daily Charts, NIFTY made a Small Black Candlestick. For the day, NIFTY had a quite opening of about 5-10 points with the positive bias. NIFTY traded highly volatile and tested its strong support level of 6160 for twice and in the last trading hour, after breaching the support it dragged till the levels of 6107.50 for the day (the day’s low). A good selling pressure was witnessed in the METALS and REALTY & INFRA stocks at the same time. For the day, NIFTY ended the session at 6120.30, which proves that the weakness in the markets may last for the next trading session too.  

A bit of skittish session may be witnessed tomorrow. A good set of Economic data will be announced in the Global Markets like; announcement of HSBC Manufacturing PMI for September month in China, announcement of Trade Balance for August month in Germany, announcement of Non-Farm Payrolls for September month,  Unemployment Rate for the same month and Wholesale Inventories in US. 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) 5658.19 and the 20-Days EMA (Exponential Moving Average) of 5956.58. NIFTY is continuously showing good strength, and in the long term may also cross its previous life time high of 6357. On the flip side, the level of 6000 is acting as a strong support level.

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 6140 / 6170 / 6195 levels. At the same time, 6090 / 6070 / 6040 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 70.02 and 75.86, respectively.
2. MACD (26 Days & 12 Days): Their Values are 146.09 and 146.28, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 37.33, -DI: 12.60, ADX: 50.79: 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 5672.65 and 5972.17.

Pre - Market Calls:

ADANIENT          Buy only if it trades above 698 for the Targets of 712 & 715, with the strict Stop Loss of 685.

HEROHONDA     Buy only if it trades above 1850 for the Targets of1870 & 1875, with the strict Stop Loss of 1840.

HDFC                   Sell only if it trades below 720 for the Targets of 710 & 705, with the strict Stop Loss of 730.