Nifty Outlook for 02nd November 2010

Yesterday, NIFTY made a Small White Candlestick, with a longer lower shadow. NIFTY had a gap up opening of almost 70 points at 6092.30. A good buying interest was witnessed in BANKING, SUGAR, PHARMA, SHIPPING and CEMENT Sector. Due to gap up opening in the markets, a very sluggish session was witnessed. Trading was halted by BSE (Bombay Stock Exchange) for almost two and a half years, from 12 o’clock noon to 2.30 p.m. in the afternoon. For the day, NIFTY made a high of 6132.40, whereas a low of 6017.70. Currently, the level of 5950 is acting as a very important support level for NIFTY. For the day, NIFTY closed at 6117.55.

Markets may behave very skittish, as RBI (Reserve Bank of India) is going to come out with its Credit Policy Decision.

Purely Stock Specific and Sector Specific actions will be witnessed now as the Results Season has begun. 3IINFOTECH, ESSELPACK, JAICORP, NEYVELILIG, OFS, SPICEJET and TVTODAY will be announcing their results today. On the, Global front, Cairn Energy PLC is going to announce its Quarterly Results in UK, Audi AG is going to announce its Quarterly Results in Germany and Pfizer & Electronic Arts are going to announce their Quarterly Results in US.

Japanese Markets will be witnessing holiday on account of Culture Day tomorrow, Purchasing Manager Index Services for the month of October will be announced in UK, Factory Orders for the month of September, ADP Employment Change for the month of October, ISM Non-Manufacturing for the month of October, and Total Vehicle Sales for the month of October will be announced in US. Fed Interest rate Decision will also be announced in US.

NIFTY opened above its 20-Days EMA (Exponential Moving Average) of 6050.25 at 6092.30 and made a low of 6017.70 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 6130 / 6165 / 6190 levels. At the same time, 6098 / 6065 / 6030 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 56.98 and 54.11, respectively.
2. MACD (26 Days & 12 Days): Their Values are 33.63 and 52.00, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 27.17, -DI: 22.74, ADX: 25.86: 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 5887.85 and 6050.25.

Pre - Market Calls:

SUZLON              Buy only if it trades above 59 for the Targets of 61 & 61.70, with the strict Stop Loss of 57.50.

SINTEX                Buy only if it trades above 213 for the Targets of 218 & 220, with the strict Stop Loss of 209.

RANBAXY           Buy only if it trades above 606 for the Targets of 618 & 620, with the strict Stop Loss of 595.