Yesterday, on the Daily Charts NIFTY made a Long Black Candlestick, representing the presence of weakness in the markets. Day before yesterday’s Candle (Hanging Man Candlestick Pattern) got the confirmation yesterday with the formation of Long Black Candlestick. NIFTY had an opening of 40 points in the upside and within seconds it remained only 20 points up. PHARMA Sector was the star performer of the day. Sectors like BANKING & FINANCE, FERTILIZER and OMCs also witnessed a good upside movement. NIFTY traded very range bound with the negative bias till the first half of the trading session. In the second half, NIFTY had a sudden bounce of almost 50 points and made a high of 6127.05. In the last hour of the session, NIFTY skidded till the level of 6008.15, with majority of the Index Constituents and Trading Stocks losing almost 2-3% for the day. Selling Pressure in majority of the Sectors like METALS, IT, CAPITAL GOODS, REALTY & INFRA and BANKING & FINANCE was witnessed. Finally for the day NIFTY closed at 6027.30.
Purely Stock Specific and Sector Specific actions will be witnessed now as the Results Season has begun. ASHOKLEY, BOMDYEING, CANBANK, GSFC, HCLTECH, HINDZINC, IBREALEST, KOTAKBANK, POWERGRID & YESBANK will be announcing their results today.
A good set of economic data are going to be announced all over the globe tomorrow. Producer Price Index for the month of September will be announced in Germany, M4 Money Supply and Public Sector Net Borrowing for the month of September will be announced in UK and MBA Mortgage Applications will be announced in US.
The People's Bank of China lifted deposit and lending rates by a quarter point yesterday. The surprise policy move brought the one-year yuan lending rate to 5.56% from 5.31% and the one-year deposit rate to 2.5% from 2.25. The announcement was the first policy tightening since December 2007, which will be effective from Oct. 20. The hike by China fueled worries that the world’s fastest growing economy was trying to slow down. The effect of this move will also be witnessed tomorrow as this move of China made the US Dollar appreciate against a basket of currencies.
NIFTY has breached its 20-Days EMA (Exponential Moving Average) of 6046.20 by making a low of 6008.15. The next support levels lie at 5930/5820 and at 50-Days SMA (Simple Moving Average) of 5781.03.
20-Days EMA (Exponential Moving Average) has maintained above the 50-Days SMA (Simple Moving Average), still 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 6050 / 6085 / 6100 levels. At the same time, 6000 / 5980 / 5960 will act as major intraday support levels.
What does Indicators Say?
- RSI (14 Days & 9 Days): The values are 52.43 and 62.69, respectively.
- +DI: 27.27, -DI: 21.30, ADX: 40.91: 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:
GLENMARK Buy at the level of 310 for the Targets of 316 & 320, with the strict Stop Loss of 304.
DLF Sell only if it trades below 365 for the Targets of 358 & 355, with the strict Stop Loss of 372.
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