Nifty Outlook for 24th November 2010 and Pre Market Calls

Yesterday, on the Daily Charts, NIFTY made a Bullish Hammer Pattern Candlestick. This pattern when forms after a downturn prove to be a good bullish reversal pattern. NIFTY had a gap down opening of almost 40-50 points in the negative side, with a good selling pressure witnessed in BANKING, REALTY, OMCs and CAPITAL GOODS Stocks. Weak global cues prevailed since morning, but it was after the news on North Korea shelling a South Korean island, that chaos made an entry. Initially, markets of the region – Kospi and Hang Seng – lost over 1.5%. The fear of war spread like fire among other markets (Asia & Europe), which fell significantly too. Indian Markets also felt the heat of the same and a strong meltdown was witnessed. NIFTY tanked almost 150-160 points by making a low of 5824.95 for the day, breaching all the important supports with a deep sharp cut. A good bounce back was witnessed with BANKING & FINANCE, SHIPPING, REALTY & INFRA and FERTILIZER Stocks. NIFTY recovered smartly from the day’s low and closed almost 100 points higher from the day’s low at 5934.75.   

Net Selling of Rs. 1493.19 Crore in Cash Segment and Net Buying of Rs. 1415.87 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.

In F&O Segment Net Selling of Rs. 1591.97 Crore and Rs. 15.25 Crore in Stock Options was witnessed, whereas Net Buying of Rs. 2475.31 Crore and Rs. 547.78 Crore was witnessed in Index Options and Stock Futures.

NIFTY NOV FUTURE premium ended neck to neck of NIFTY Spot on Tuesday.

Japan will be announcing its Corporate Service Price and Merchandise Trade Balance for the month of October. IFO-Business Climate for the month of November will be announced in Germany. UK will be coming out with its Q3 GDP and Total Business Investment and also with Index of Services for the month of September. European Monetary Union will be coming out with its Industrial New Orders for the month of September. Durable Goods Orders for the month of October, Continuing Jobless Claims, Continuing Jobless Claims, Personal Income for the month of October, Reuters/Michigan Consumer Sentiment for the month of September and New Home Sales for the month of October will be announced in US.

NIFTY is trading below its 20-Days EMA (Exponential Moving Average) of 6074.38 and the 50-Days SMA (Simple Moving Average) of 6069.70. Both the Moving Averages have converged; the next day’s move will decide the further direction of the markets. The next important support levels lie at 5725.

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 5965 / 5990 / 6020 levels. At the same time, 5900 / 5860 / 5825 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 41.99 and 46.83, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -19.99 and 29.23, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 13.35, -DI: 31.39, ADX: 25.37 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 6069.70 and 6074.38.

Pre - Market Calls:

AMARAJABAT    Buy only if it trades above 183 for the Targets of 188 & 190, with the strict Stop Loss of 180.

ORCHIDCHEM      Buy only if it trades above 325 for the Targets of 332 & 335, with the strict Stop Loss of 319.

IVRCLINFRA       Buy only if it trades above 135 for the Targets of 138 & 140, with the strict Stop Loss of 133.