On Friday, NIFTY has again made a High Wave Candlestick Pattern. A group of high wave candlesticks signal a possible reversal in the market. Once again a very Choppy Session was witnessed. IT Stocks were again the Star performers of the day. Markets were trading with the negative bias till the announcement of RBI’s (Reserve Bank of India’s) Mid-Term Credit Policy Review. In the mid-term credit policy review, RBI reduced the SLR (Statutory Liquidity Ratio) from 25% to 24%. Immediately, after the announcement, Markets, especially the BANKING & FINANCE and REALTY & INFRA Stocks reacted positively and led NIFTY to touch the levels of 5911, after sustain near those levels, NIFTY again dipped to the day’s low of 5855.05. After the opening of European Markets, they turned Green at the last hour of our trading session. This resulted in a bounce back, which may technically be termed as Short Covering too, which led NIFTY to make day’s high of 5956.15. For the day, NIFTY made a high of maintained to close at 5948.75.
Net Selling of Rs. 316.79 Crore in Cash Segment while Net Buying of Rs. 1106.84 Crore in F&O Segment by FIIs was witnessed on Friday's Trading Session.
In F&O Segment Net Buying of Rs. 1215.66 Crore and of Rs. 250.99 Crore was witnessed in Index Options and Stock Futures, respectively, while, Net Selling was witnessed in Index Futures and Stock Options of Rs. 345.24 Crore and of Rs. 14.57 Crore, respectively.
NIFTY DEC FUTURE ended with the premium of 18.05 points to the Spot NIFTY.
Technically, NIFTY bounced back, but with lack of buying interest and very sluggish volumes. It is not able to make a closing above 5960 levels, which if takes place can again move NIFTY to the levels of 6080/6100, but at the same time, the level of 5750 is acting as a strong support which if breaches again on the closing basis; NIFTY may test the levels of 5500. Now, NIFTY is again expected to touch the levels of 5800 in the short term.
On the Economic Front, in JAPAN, BoJ (Bank of Japan) will be coming out with its Monetary Policy and at the same time, JAPAN will be announcing its Coincident Index for the month of October. Producer Price Index for the month of November will be announced in GERMANY. EUROPEAN MONETARY UNION will be coming out with its Current Account for the month of October. Mortgage Approvals will be announced on UK.
NIFTY is trading below its 20-Days EMA (Exponential Moving Average) of 5937.38 and the 50-Days SMA (Simple Moving Average) of 6033.99. 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 5720 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. Brutal selling in BANKING stocks, which maintained the markets to life time high, indicates a very cautious approach to be followed while trading in the markets at this stage. Investors are also suggested to avoid making fresh investments at this stage.
For the day, intraday resistance for NIFTY comes at 5980 / 6020 / 6050 levels. At the same time, 5920 / 5880 / 5850 will act as major intraday support levels.
What does Indicators Say?
- RSI (14 Days & 9 Days): The values are 49.79 and 46.61, respectively, showing a negative crossover.
- MACD (26 Days & 12 Days): Their Values are -31.99 and -38.57, respectively. a negative crossover is indicated by both the Moving Averages.
- +DI: 17.22, -DI: 26.40, ADX: 26.29: 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 6033.99 and 5937.38. Both the Moving Averages are showing Negative Crossover.
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