On Friday, NIFTY made a Long Black Candlestick, which signifies the presence of strong selling pressure in the market. The formation of this Long Black Candlestick has formed a sort of Bearish Three Black Crows Candlestick Formation, if a look at last three Candlesticks is taken. This formation is indicative of the fact that the market has been at a high price for too long and the market may be approaching a top or is already at the top. A decisive downward move is reflected by the first black candlestick. The next two days show further decline in prices due to profit taking. Bullish mood of the market cannot be sustained anymore. NIFTY had a quiet opening with some of the sectors witnessing strong selling pressure since morning. An extremely choppy session was witnessed for whole of the day. At the eleventh hour of trading, a robust selling pressure crept into the markets backed by the Rumor of the Resignation of the Prime Minister, Mr. Manmohan Singh, which dipped the NIFTY to the day’s low of 5863.95. Finally, for the day the session ended at 5890.30. A strong dip was seen in BANKING, REALTY & INFRA, TELECOM, METALS, IT, CAPITAL GOODS and TEXTILES Sector. It was the third consecutive session, in which NIFTY closed below its previous day’s close.
Net Buying of Rs. 367.91 Crore in Cash Segment and of Rs. 733.53 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.
In F&O Segment Net Buying of Rs. 3.54 Crore in Index Futures, Rs. 479.09 Crore in Index Options and Rs. 258.02 Crore in Stock Futures was witnessed, whereas Net Selling of Rs. 7.12 Crore was witnessed in Stock Options.
NIFTY NOV FUTURE premium ended neck to neck of NIFTY Spot on Friday.
A bit of selling pressure can be witnessed again as Peoples Bank of China; China’s Central Bank hiked its reserve requirement ratio by 50 Basis Points.
No major economic data is going to be announced today, except the announcement of Consumer Confidence for the month of November by European Monetary Union.
NIFTY is trading below its 20-Days EMA (Exponential Moving Average) of 6097.40 and the 50-Days SMA (Simple Moving Average) of 6058.80. The next important support levels lie at 5840 and 5725.
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 5900 / 5935 / 5970 levels. At the same time, 5840 / 5815 / 5790 will act as major intraday support levels.
What does Indicators Say?
- RSI (14 Days & 9 Days): The values are 37.48 and 48.62, respectively, showing a negative crossover.
- MACD (26 Days & 12 Days): Their Values are -3.96 and 48.77, respectively. a negative crossover is indicated by both the Moving Averages.
- +DI: 16.08, -DI: 32.64, ADX: 23.58: 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.
- SMA (50 Days) & EMA (20 Days): The values of these two indicators are 6058.80 and 6097.40.
Pre - Market Calls:
BANKBARODA Sell only if it trades below 930 for the Targets of 910 & 905, with the strict Stop Loss of 940.
EDUCOMP Buy only if it trades above 608 for the Targets of 620 & 625, with the strict Stop Loss of 602.
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