Nifty Outlook for 29th November 2010 and Pre Market Calls

On Friday, NIFTY made a Black Candlestick, with a long lower shadow on the Daily Chart. A flat opening with the positive bias of almost 12-15 points (at 5828.55) was witnessed, with majority of the Index stocks trading in green territory. A sudden sell off was witnessed in the next hour which dragged NIFTY to the day’s low of 5690.35 (almost 100 points in the negative territory). Almost all the stocks were down by 5-20%. It may also be termed as Fund Selling. Sectors like BANKING & FINANCE, AUTO, REALTY & INFRA, SHIIPING, SUGAR, PHARMA & METALS dipped the most. From the day’s low NIFTY bounced back again in to the green and made a high of 5838.50. Again in the second half of trading session, with European Markets in the red, NIFTY dipped at the eleventh hour of trading and ended the session at 5751.95. Downgrading of LIC  and its exposure to Realty Industry of Rs. 1600 Crore led to a good panic sell off in the BANKING & FINANCE and REALTY & INFRA Stocks.

Net Selling of Rs. 628.77 Crore in Cash Segment and Net Buying of Rs. 3714.81 Crore in F&O Segment by FIIs was witnessed on Friday's Trading Session.

In F&O Segment Net Buying of Rs. 162.84 Crore in Index Futures, of Rs. 3272.19 Crore in Index Options, and of Rs. 358.66 Crore in Stock Futures Segment was witnessed,  whereas Net Selling of Rs. 83.89 Crore in Stock Options Segment was witnessed. 

NIFTY DEC FUTURE ended with the premium of 20.40 points to the Spot NIFTY. 

Technically speaking, 5800 was a good physiological support level for NIFTY, which it breached on the closing basis, hence, proving further weakness in the markets. For whole of the day, it traded at 5800 levels but breaching it on the closing basis, proves the presence of weakness in the markets. The ongoing uncertain and bad economic domestic environment is weighing much on the markets, failing the technical bullish signals too (Bullish Hammer Candlestick Pattern made on Wednesday, 24^th November 2010). Each day NIFTY is breaching its important support levels, hence, traders are suggested to trade cautiously in the markets and investors are suggested to avoid investing heavily at his time in the markets.

On the Economic Front, JAPAN will be coming out with its Jobless Rate and Industrial Production for the month of October, Hometrack Housing Prices for the month of November and M4 Money Supply for the month of October will be announced in UK. EUROPEAN MONETARY UNION will be coming out with Consumer Confidence and Industrial Confidence for the month of November.

NIFTY is trading below its 20-Days EMA (Exponential Moving Average) of 6003.74 and the 50-Days SMA (Simple Moving Average) of 6068.34. Both the Moving Averages are indicating a negative crossover, with short term moving average crossing the long term moving average from upside. NIFTY broke the important support of 5725 by making a low of 5690.35, now the next important support levels lie at 5650 and 5550.

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 5760 / 5800 / 5830 levels. At the same time, 5700 / 5680 / 5650 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 34.13 and 41.54, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -64.05 and -9.76, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 10.36, -DI: 32.44, ADX: 29.39 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 6003.74 and 6068.34.

Pre - Market Calls:

TCS                      Buy only if it trades above 1060 for the Targets of 1080 & 1090, with the strict Stop Loss of 1045.

JSWSTEEL           Sell only if it trades below 1100 for the Targets of 1080 & 1070, with the strict Stop Loss of 1115.

BHUSANSTL       Sell at the levels of 424-423 for the Targets of 410 & 405, with the strict Stop Loss of 430.