Nifty Outlook for 15th October 2010

Yesterday, on the Daily Charts NIFTY made a Small Black Candlestick. A good profit booking was witnessed in the markets. NIFTY had a gap up opening of almost 25-30 points and then it moved northwards within minutes to the new 52-week high or say 32-months high of 6284.10. After touching this high NIFTY turned southwards with a good amount of profit booking witnessed in the sectors like CAPITAL GOODS & AUTO. Till the last hour of the session, NIFTY tested its important support level of 6230 twice and breached it in the last hour of trading marking a low of 6157.90 for the day. Finally for the day NIFTY closed at 6177.35.  

Purely Stock Specific and Sector Specific actions will be witnessed now as the Results Season has begun. A good trading momentum can be witnessed in IT Sector tomorrow. A good set of economic data are going to be announced all over the globe tomorrow as well. Foreign Exchange Reserves for the month of September will be announced in China, Industrial Production and Capacity Utilization for the month of August will be announced in Japan, Consumer Price Index for the month of September and Trade Balance for the month of August will be announced by European Monetary Union, Consumer Price Index, Retail Sales Data and Monthly Budget Statement for the month of September with the announcement of Business Inventories for the month of August will be announced 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) 5745.16 and the 20-Days EMA (Exponential Moving Average) of 6177.35. 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 6190 / 6210 / 6235 levels. At the same time, 6135 / 6115 / 6090 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 65.83 and 70.45, respectively.
2. MACD (26 Days & 12 Days): Their Values are 124.61 and 138.61, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 36.39, -DI: 13.62, ADX: 47.41: 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 5745.16 and 6043.44.

Pre - Market Calls:

TATACHEM         Buy at the levels of 434-435 for the Targets of 445 & 448, with the strict Stop Loss of 427.

PATNI                  Buy only if it trades above 473 for the Targets of 484 & 488, with the strict Stop Loss of 462.

BPCL                    Sell only if it trades below 720 for the Targets of 708 & 705, with the strict Stop Loss of 730.