Nifty Outlook for 27th October 2010

Yesterday, NIFTY made a Small Black Candlestick. A very quiet and sluggish session was witnessed with a good selling pressure in METALS & REALTY Stocks. Sectors like BANKING & FINANCE, FERTILIZER & SUGAR witnessed a good buying interest. NIFTY opened flat with the positive bias of almost 8-10 points and remained range bound for whole of the trading session. For the day, NIFTY made a low of 6074.65, while a high of 6138. Currently, the level of 5950 is acting as a very important support level for NIFTY. For the day, NIFTY closed at 6082.

Purely Stock Specific and Sector Specific actions will be witnessed now as the Results Season has begun. BATAINDIA, CUMMINSIND, DABUR, GLENMARK, GODREJIND, GSPL, HCL-INFOSYS, HINDUSTANCOPPER, IFCI, INDHOTEL, MAX, PATNI, SRTRANSFIN & UNIONBANK will be announcing their results today.

Retail Sales Data for the month of September will be announced in Japan, M3 Money Supply for the month of September will be announced by European Monetary Union, Consumer Price Index for the month of October will be announced in Germany, Durable Goods Order and New Home Sales Data for the month of September will be announced in US. Traders are suggested to follow very cautious approach by following Strict Stop Losses in Intraday Trading.

NIFTY traded above its 20-Days EMA (Exponential Moving Average) of 6056.11 for whole of the trading session, even the 20-Days EMA has maintained above the 50-Days SMA (Simple Moving Average), still supporting the recent positive move. The next support levels lie at 5920.

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 6100 / 6130 / 6160 levels. At the same time, 6050 / 6020 / 5090 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 54.85 and 57.40, respectively.
2. MACD (26 Days & 12 Days): Their Values are 56.19 and 82.69, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 26.82, -DI: 19.14, ADX: 33.01: 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 5844.42 and 6056.11.

Pre - Market Calls:

INDHOTEL          Buy only if it trades above 102 for the Targets of 104 & 106, with the strict Stop Loss of 100.

ASHOKLEY          Buy only if it trades above 79 for the Targets of 81 & 82, with the strict Stop Loss of 77.50.

MCDOWELL-N    Buy only if it trades above 1620 for the Targets of 1645 & 1655, with the strict Stop Loss of 1600.