Nifty Outlook for 22nd October 2010

Yesterday, on the Daily Charts NIFTY made a Long White Candlestick, representing the presence of buying pressure in the markets. Currently, the level of 5950 is acting as a very important support level for NIFTY. At the time of opening only NIFTY made a low of 5984.90 within seconds and then bounced back above 6000 levels. BANKING & FINANCE Sector was the biggest gainer of the day. Other than that, all the Index constituents’ shares were the biggest movers for the day like HINDUNILVR, CIPLA, and RELIANCE. NIFTY traded sluggishly for whole of the trading session and ran up to the levels of 6113.50 (day’s high). It can be said that after witnessing a good selling pressure continuously since last five trading sessions, a good buying interest was witnessed again in the markets. For the day, NIFTY closed at 6101.50.

Purely Stock Specific and Sector Specific actions will be witnessed now as the Results Season has begun. BANKINDIA, MAHABANK, BIOCON, CHENNPETRO, INDIANB, PIRHEALTH, SOBHA, TNPL, TATAELXSI, VIJAYABANK & WIPRO will be announcing their results today. Traders are suggested to follow very cautious approach by following Strict Stop Losses in Intraday Trading.

NIFTY crossed its 20-Days EMA (Exponential Moving Average) of 6045.95 by making a high of 6113.50 and closing at 6101.50, proving the presence of buying interest in the markets. The next support levels lie at 5930/5820.

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 6120 / 6150 / 6190 levels. At the same time, 6060 / 6035 / 5985 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 57.01 and 59.36, respectively.
2. MACD (26 Days & 12 Days): Their Values are 68.94 and 105.76, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 28.86, -DI: 21.03, ADX: 36.74: 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 5805.08 and 6045.95.

Pre - Market Calls:

ANDHRABANK               Buy only if it trades above 174 for the Targets of 178 & 180, with the strict Stop Loss of 170.

CROMPGREAV               Buy only if it trades above 323 for the Targets of 330 & 335, with the strict Stop Loss of 317.