Nifty Outlook for 28th December 2010 and Pre Market Calls

Yesterday, NIFTY made a High Wave Candlestick Pattern on the Daily Charts. The pattern implies a loss of sense of direction and that there is a great amount of indecision in the market. NIFTY had a muted opening with the positive bias of almost 20-25 points. A very tepid session was again witnessed yesterday, with METALS, BANKING and REALTY & INFRA stocks facing Profit Booking. SUGAR, TEXTILE and PACKAGING Stocks had a positive movement for the day. NIFTY dipped two times in the last session, due to the news that People’s Bank of China (China’s Central Bank) increased both its one-year lending and one-year deposit rates by a Quarter-Point. This sudden increment in the rates spread a shockwave around the World Markets, the effect of which was very well witnessed in the METALS Stocks. For the day, NIFTY made a high of 6045.75, while a low of 5991.10. The session finally closed at the levels of 5998.10.

Net Buying of Rs. 246.31 Crore in Cash Segment and of Rs. 224.28 Crore in F&O Segment by FIIs was witnessed on Monday's Trading Session.

In F&O Segment Net Buying of Rs. 357.31 Crore and of Rs. 355.05 Crore was witnessed in Index Futures and  Index Options, respectively, while, Net Selling was witnessed in Stock Futures and Stock Options of Rs. 465.39 Crore and Rs. 22.79 Crore, respectively.     

NIFTY DEC FUTURE ended with the premium of 9.55 points to the Spot NIFTY.

Technically, NIFTY bounced back, but with lack of buying interest and very sluggish volumes. NIFTY is now trading above its 20-days EMA (Exponential Moving Average) of 5960.79, but it was not able to cross the resistance of its 50-Days SMA (Simple Moving Average) of 6015.19 on the Closing Basis. Now the next resistances for NIFTY come at 6080 and 6100 levels, whereas the level of 5850 is acting as a Good Support Level.

On the Economic Front, JAPAN will be coming out with its Labor Cash Earnings for the month of November. UK will be witnessing a Trading Holiday on account of Boxing Day. S&P/Case-Shiller Home Prices Indices for the month of October, Consumer Confidence, Richmond Fed Manufacturing Index for the month of December and ABC/Washington Post Consumer Confidence will be announced in US.

NIFTY is trading above its 20-Days EMA (Exponential Moving Average) of 5960.79. Now the next resistance for NIFTY comes at its 50-Days SMA (Simple Moving Average) of 6015.19, which it crossed yesterday by making a high of 6045.75 but could not close above it. Both the Moving Averages are indicating a negative crossover, with short term moving average crossing the long term moving average from upside.

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 6020 / 6050 / 6080 levels. At the same time, 5980 / 5945 / 5920 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 52.79 and 50.95, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -0.43 and -20.27, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 19.05, -DI: 21.56, ADX: 20.41: 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 6015.19 and 5960.79. Both the Moving Averages are showing Negative Crossover.

Pre - Market Calls:

CIPLA   Buy only if it trades above 372 for the Targets of 380 & 385,with the strict Stop Loss of 368.

On the Daily Charts, CIPLA has made a Long White Candlestick, with a slight spurt in volume. The prices are trading above their 50-Days SMA (Simple Moving Average) and 20-Days of 350.52 and 358.96, respectively. The stock is facing a strong resistance of 372, which was touched by the stock by making a high of 371.90 and it closed at 370.10 for the day. The 14-Days RSI (Relative Strength Index) is quoting at 59.99 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (18.55) is below the Negative Directional Index (21.59), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 16.64 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 CIPLA only if it trades above 372 for the Targets of 380 & 385, with the strict Stop Loss of 368. 

MOSERBAER   Buy only if it trades above 57.50 for the Targets of 59.50 & 60.50,with the strict Stop Loss of 56.80.

On the Daily Charts, MOSERBAER has made a Long White Candlestick, with a good spurt in volume. The prices crossed its 20-Days EMA (Exponential Moving Average) of 56.94 by making a high of 58.20 and closing at 57.35. The stock is facing a strong resistance of 57.50 and crossed it yesterday by making a high of 58.20. The 50-Days SMA (Simple Moving Average) is quoting at 61.61. The 14-Days RSI (Relative Strength Index) is quoting at 48.59 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (18.65) is below the Negative Directional Index (23.59), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 30.65 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 MOSERBAER only if it trades above 57.50 for the Targets of 59.50 & 60.50, with the strict Stop Loss of 56.80. 

DISHTV   Buy only if it trades above 68.50 for the Targets of 70.50 & 71.50,with the strict Stop Loss of 67.80.

On the Daily Charts, DISHTV has made a Long White Candlestick, with a slight spurt in volume. The prices are trading above their 50-Days SMA (Simple Moving Average) of 64.38 and also crossed their 20-Days EMA (Exponential Moving Average) of 66.79 by making a high of 68.40 and closing at 67.85. The stock is facing a strong resistance of 68.50, which if crossed will invite more buying pressure in the stock. The 14-Days RSI (Relative Strength Index) is quoting at 53.24 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (19.78) is below the Negative Directional Index (23.86), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 18.50 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 DISHTV only if it trades above 68.50 for the Targets of 70.50 & 71.50, with the strict Stop Loss of 67.80.