Nifty Outlook for 01st December 2010 and Pre Market Calls

Yesterday, NIFTY made a White Spinning Top Candlestick, which is a reversal or a continuation pattern. It mainly indicates the presence of indecision in the markets. As this formation appears after a good downtrend it can be said that it implies weakness among the bears and it is a warning about a potential change or interruption in trend. However, the confirmation of the same is required on the very next day. A Gap up opening of almost 40-50 points was witnessed, but the stocks were trading in good pressure before the announcement of Q2 GDP (Gross Domestic Product). After the announcement of Data which was at 8.90% Vs 8.70% (on YoY basis), NIFTY dipped to the day’s low of 5768.35, with all the frontline stocks dipping a bit and making day’s low. After touching the day’s low markets immediately bounced back with a good buying interest witnessed in BANKING & FINANCE, REALTY & INFRA, METALS and AUTO Stocks. NIFTY made a high of 5892.25 for the day and managed to close at 5837.56.

Net Buying of Rs. 889.46 Crore in Cash Segment and of Rs. 1444.75 Crore in F&O Segment by FIIs was witnessed on Tuesday's Trading Session.

In F&O Segment Net Buying was witnessed in all the segments of Rs. 529.72 Crore, Rs. 335.53 Crore, Rs. 575.16 Crore and Rs. 4.33 Crore in Index Futures, Index Options, Stock Futures and Stock Options Segment, respectively. 

NIFTY DEC FUTURE ended with the premium of 52.39 points to the Spot NIFTY. 

On the Economic Front, CHINA will be announcing its HSBC Manufacturing PMI for the month of November, JAPAN will be coming out with its Vehicle Sales and Monetary Base for the month of November with Q3 Capital Spending Data. Nationwide Housing Prices and Purchasing Managers Index Manufacturing for the month of November will be announced in UK. EUROPEAN MONETARY UNION will be coming out with Purchasing Managers Index Manufacturing for the month of November. Retail Sales for the month of October will be announced in GERMANY. US will be coming out with its MBA Mortgage Applications, ADP Employment Change for the month of November, Nonfarm Productivity and Unit Labor Cost for the third Quarter, Construction Spending for the month of October, ISM Manufacturing and Prices Paid and Total Vehicle Sales for the month of November, Purchasing Managers Index Manufacturing for the month of November.

NIFTY is trading below its 20-Days EMA (Exponential Moving Average) of 5975.34 and the 50-Days SMA (Simple Moving Average) of 6064.89. Both the Moving Averages are indicating a negative crossover, with short term moving average crossing the long term moving average from upside. The first immediate resistance for the NIFTY comes at 5975.

MACD (Moving Average Convergence Divergence) has entered into negative territory now. 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 5850 / 5880 / 5920 levels. At the same time, 5800 / 5760 / 5720 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 41.99 and 41.35, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -69.62 and -33.66, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 12.32, -DI: 28.28, ADX: 31.50: 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 6064.89 and 5975.34. Both the Moving Averages are showing Negative Crossover.

Pre - Market Calls:

MUNDRAPORT   Buy only if it trades above 154 for the Targets of 158 & 160, with the strict Stop Loss of 152.

On the Daily Charts, MUNDRAPORT has made a Long White Candlestick, with a good spurt in volume. The candles has a long lower shadow, which indicates that the prices bounced back from the day’s low 139.15 and made a high 153.90, while closed at 152.40 for the day. The prices crossed its 20-Days EMA (Exponential Moving Average) of 150.58 by making a high of 153.90 for the day and closing above it at 152.40. The 50-Days SMA (Simple Moving Average) is quoting at 161.19. If the stock crosses this level, it will again enter into a positive territory. The 14-Days RSI (Relative Strength Index) is quoting at 49.68 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (12.62) is still below the Negative Directional Index (33.96), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 34.93 on the Daily Charts. ADX’s value above 20 and near 40 indicates that the underlying trend is strengthening.  

Hence, it is recommended to buy MUNDRAPORT only if it trades above 154 for the Targets of 158 & 160, with the strict Stop Loss of 152.

PFC   Buy only if it trades above 340 for the Targets of 348 & 350, with the strict Stop Loss of 334.

On the Daily Charts, PFC has made a Large White Candlestick, with an excellent spurt in volume. The stock maintained its upside of the day for whole of the trading session very firmly. The prices are trading below their 20-Days EMA (Exponential Moving Average) and 50-Days SMA (Simple Moving Average) of 344.13 and 356.06, respectively. The 14-Days RSI (Relative Strength Index) is quoting at 44.22 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (12.05) is still below the Negative Directional Index (31.27), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 34.24 on the Daily Charts. ADX’s value above 20 and near 40 indicates that the underlying trend is strengthening.  

Hence, it is recommended to buy PFC only if it trades above 340 for the Targets of 348 & 350, with the strict Stop Loss of 334.

AREVAT&D   Buy only if it trades above 310 for the Targets of 316 & 320, with the strict Stop Loss of 305.

On the Daily Charts, AREVAT&D has made a Long White Candlestick, with a good spurt in volume. The prices successfully crossed the consolidation zone and maintained to close above it at 307.75, while made a high of 309.90 for the day. The sock opened below its 20-Days EMA (Exponential Moving Average) of 295.95 at 294.95 and moved above it along with the 50-Days SMA (Simple Moving Average) of 298.35 by making a high of 309.90 and closing at 307.75. The 14-Days RSI (Relative Strength Index) is quoting at 63.28 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (21.66) is still below the Negative Directional Index (24.92), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 19.84 on the Daily Charts. ADX’s value above 20 and near 40 indicates that the underlying trend is strengthening.  

Hence, it is recommended to buy AREVAT&D only if it trades above 310 for the Targets of 316 & 320, with the strict Stop Loss of 305.