Yesterday, on the Daily Charts NIFTY made a Shooting Star Pattern Candlestick, which signifies that the market opened near its low, then strongly rallied up and finally moved down to close near the opening level. Formation of this candlestick pattern, signals to follow a cautious approach for the next trading session. With the support of strong global cues NIFTY made a gap up opening of almost 80 points and made a high of 6187.75 for the day. Immediately, markets cooled off a bit and NIFTY remained only 30-50 point in the upside. METALS, BANKING & FINANCE, PACKAGING and CHEMICAL & FERTILIZER Stocks were the Star performers of the day. Markets traded very sluggishly after the gap up opening. For the day, NIFTY made a low of 6103.85 and finally ended the trading session at 6135.52.
A bit of skittish session may be witnessed tomorrow. NIFTY will be trading in a small range with a highly volatile trading momentum, unless a direction (either southwards or northwards) is decided. Japan will be announcing Consumer Confidence for the month of September, Bank Lending for the year, Money Supply and Core Machinery Orders for the month of August. At the same time Consumer Price Index and Wholesale Price Index will be announced in Germany and UK. UK is also going to announce its Retail Price Index for the month of September and also the Trade Balance for the month of August. 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) 5701.90 and the 20-Days EMA (Exponential Moving Average) of 5999.07. 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 6150 / 6190 / 6220 levels. At the same time, 6120 / 5090 / 5075 will act as major intraday support levels.
What does Indicators Say?
- RSI (14 Days & 9 Days): The values are 69.79 and 73.37, respectively.
- +DI: 35.45, -DI: 14.20, ADX: 49.39: 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.
Pre - Market Calls:
HEROHONDA Buy at the level of 1880 for the Targets of 1920 & 1930, with the strict Stop Loss of 1867.
STER Buy at the level of 180 for the Targets of 184 & 185, with the strict Stop Loss of 178.
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