Nifty Outlook for 28th October 2010

Yesterday, NIFTY made a Small Black Candlestick. A very good selling pressure was witnessed all over the counters except METALS. Most of the heavyweights were down almost 2-3% for the day. NIFTY opened flat with the negative bias of almost 8-15 points. While opening only, NIFTY made a high of 6123.75, but with the continued volatility and selling pressure it dragged till the levels of 5987.55, almost down 60-75 points for the day. FERTILIZER, BANKING, OMCs, REALTY & INFRA and CAPITAL GOODS Sectors were the laggards of the day. Currently, the level of 5950 is acting as a very important support level for NIFTY. For the day, NIFTY closed at 6012.65.

Purely Stock Specific and Sector Specific actions will be witnessed now as the Results Season has begun. ADANIENT, ALOKTEXT, ANDHRABANK, ARVIND, BANKBARODA, CAIRN, COLPAL, EIH, ESSARSHIP, GLAXO, GRASIM, HEXAWARE, IDBI, IRB, MLL, NHPC, NMDC, ONGC, ORCHIDCHEM, PNB, SAIL, SUNTV, TATACOMM, WHIRLPOOL & ZEEL will be announcing their results today. On the Global front, Daimler AG is going to announce its Quarterly Results in UK. In US, Dow Chemical Company, Colgate-Palmolive Company, Moody’s Corporation, Exxon Mobil Corporation, Goodyear Tire & Rubber Company, Metlife Inc., Coca-Cola Enterprises, Thompson Reuters and The Blackstone Group are going to announce their Quarterly Numbers today.

BoJ (Bank of Japan) will be announcing its Interest Rate Decision, besides National Consumer Price Index for the month of September, Jobless Rate and Industrial Production for the month of September. UK will be announcing its Nationwide Housing Prices for the month of October, Germany will be announcing its Unemployment Rate and Unemployment Change for the month of October. European Monetary Union will be announcing its Consumer Confidence, Economic Confidence and Industrial Confidence for the month of October. US will be announcing its Initial Jobless Claims and Continuing Jobless Claims Numbers. Traders are suggested to follow very cautious approach by following Strict Stop Losses in Intraday Trading.

NIFTY again dragged below its 20-Days EMA (Exponential Moving Average) of 66051.94 by making a low of 5987.55 for the day. Still the 20-Days EMA has maintained above the 50-Days SMA (Simple Moving Average), still supporting the recent positive move. The next support level lies 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 6020 / 6045 / 6080 levels. At the same time, 5980 / 5955 / 5930 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 49.56 and 55.83, respectively.
2. MACD (26 Days & 12 Days): Their Values are 46.59 and 74.02, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 24.40, -DI: 23.99, ADX: 30.72: 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 5856.39 and 6051.97.

Pre - Market Calls:

IDBI                     Buy at the levels of 177-178 for the Targets of 182 & 184, with the strict Stop Loss of 175.

HINDOILEXP      Buy only if it trades above 254 for the Targets of 260 & 262, with the strict Stop Loss of 248.