Nifty Outlook for 08th December 2010 and Pre Market Calls

Yesterday, NIFTY made a Black Candlestick with a longer lower shadow, which signifies that the market reverted from day’s low. The Candle can also be called as a High Wave Candlestick, which shows that there was a great amount of indecision in the market.  NIFTY had a flat opening in the negative bias. With most of the BANKING & FINANCE and REALTY & INFRA stocks beaten down, NIFTY dragged till the levels of 5939.70 with almost 50 points in the downside. With the opening of European Markets, NIFTY again bounced back from day’s low and made a high of 6001. A very volatile session was witnessed with the BANKING & FINANCE and REALTY & INFRA Stocks bleeding throughout the trading session. Finally, for the day NIFTY ended at 5992.25.

Net Selling of Rs. 522.83 Crore in Cash Segment and of Rs. 740.19 Crore in F&O Segment by FIIs was witnessed on Tuesday's Trading Session.

In F&O Segment Net Selling was witnessed in Index Futures, Stock Futures and Stock Options Segment of Rs. 791.13 Crore, Rs. 76.66 Crore and Rs. 10.66 Crore, respectively, while, Net Buying of Rs. 138.27 Crore was witnessed in the Index Options Segment.  

NIFTY DEC FUTURE ended with the premium of 43.55 points to the Spot NIFTY. 

Technically, NIFTY witnessed a bounce back from the levels of 5690 to 6070, after facing a continuous downfall from 6358 to 5690 levels. Now the level of 5960 is acting as a strong support which if breaches again on the closing basis, NIFTY may again test the levels of 5720.

On the Economic Front, JAPAN will be coming out with its Q3 GDP Data. Investment Lending and Home Loans for the month of October will be announced in AUSTRALIA. GERMANY will be Current Account, Trade Balance and Industrial Production for the month of October. BRC Shop Price Index will be announced in UK.

NIFTY is trading below its 20-Days EMA (Exponential Moving Average) of 5979.92 and the 50-Days SMA (Simple Moving Average) of 6063.30. 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 5960 on the Closing Basis.

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. 

For the day, intraday resistance for NIFTY comes at 5980 / 6020 / 6050 levels. At the same time, 5950 / 5920 / 5880 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 48.92 and 46.91, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -31.56 and -52.56, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 19.58, -DI: 25.70, ADX: 26.15: 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 6063.30 and 5979.92. Both the Moving Averages are showing Negative Crossover.

Pre - Market Calls:

PIRHEALTH       Buy only if it trades above 470 for the Targets of 480 & 486, with the strict Stop Loss of 463.

On the Daily Charts, PIRHEALTH has made a White Opening Marubozu Candlestick, with a slight spurt in volume. The formation of this Candlestick Pattern after a good downtrend in the share price, reflects a possible reversal in the price movement. The prices even crossed their 20-Days EMA (Exponential Moving Average) of 457.10 by making high of 468.90 and closing at 466.25 for the day. The 50-Days SMA (Simple Moving Average) is quoting at 485.31. If the stock crosses this level, it will again enter into a positive territory. The 14-Days RSI (Relative Strength Index) is quoting at 51.92 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (18.96) is still below the Negative Directional Index (29.97), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 43.46 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 PIRHEALTH only if it trades above 470 for the Targets of 480 & 486, with the strict Stop Loss of 463.

YESBANK   Sell only if it trades below 305 for the Targets of 298 & 295, with the strict Stop Loss of 310.

On the Daily Charts, YESBANK has made a Long Black Candlestick, with a good spurt in volume. The last three candles collectively resembles the formation of Three Black Crows Pattern, which is indicative of the fact that the stock has been at a high price for too long and the stock 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 stock cannot be sustained anymore. The prices are trading below their 20-Days EMA (Exponential Moving Average) and 50-Days SMA (Simple Moving Average) of 329.06 and 347.34, respectively. A further southward movement can be expected in the stock if it breaches its important support of 305. The 14-Days RSI (Relative Strength Index) is quoting at 37.79 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (14.31) is below the Negative Directional Index (32.24), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 36.52 on the Daily Charts. ADX’s value above 20 and near 40 indicates that the underlying trend is strengthening.  

Hence, it is recommended to sell YESBANK only if it trades below 305 for the Targets of 298 & 295, with the strict Stop Loss of 310.

KOTAKBANK                       Sell only if it trades below 460 for the Targets of 450 & 445, with the strict Stop Loss of 468.

On the Daily Charts, KOTAKBANK has made a Long Black Candlestick, with a good spurt in volume. The prices are making lower lows since touching their life time high, which till yesterday appears as a Triangular Formation. The stock breached its 20-Days EMA (Exponential Moving Average) of 477.94 by making a low of 461.55 and closing at 463.95 for the day. The 50-Days SMA (Simple Moving Average) is quoting at 489.07. A further southward movement can be expected in the stock if it breaches its important support of 460. The 14-Days RSI (Relative Strength Index) is quoting at 42.17 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (12.55) is below the Negative Directional Index (25.92), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 28.73 on the Daily Charts. ADX’s value above 20 and near 40 indicates that the underlying trend is strengthening.  

Hence, it is recommended to sell KOTAKBANK only if it trades below 460 for the Targets of 450 & 445, with the strict Stop Loss of 468.