Yesterday, NIFTY made a Bullish Star Morning Star Candlestick Pattern, which suggests that bulls have taken over. The reliability of this pattern is very high, but still a confirmation in the form of a white candlestick with a higher close or a gap-up is suggested. NIFTY had a gap up opening of almost 45-50 point, but immediately it went off from day’s high and got stuck trading flat till the announcement of November IIP (Index of Industrial Production) Data. The IIP Numbers were at 2.7% Vs 11.3% (YoY) and 2.5% Vs 10.8% (MoM), worse than what the market expected. Immediately after the announcement of Data, Markets took a knock and NIFTY entered into the negative terrain of 30-35 points. CAPITAL GOODS, OIL & GAS, METALS, REALTY & INFRA were the hardest hit Sectors. Till the second half of trading session, NIFTY dipped to the day’s low of 5711.30 with BANKING sector also knocking down. NIFTY reverted from the day’s low half an hour before the opening of the European Markets. A positive news flow in European Markets backed with Short Covering led to an Intraday Rally in the Markets. The Portuguese government sold 1.25 billion euros ($1.62 billion) of government bonds, in a key test of credit markets amid speculation the country could eventually be forced to seek a fiscal bailout. Also, Germany's economy grew 3.6% in 2010 in price-adjusted terms, posting its biggest surge since the nation's reunification. NIFTY spiked almost 110-115 points till the ending of the trading session touching the day’s high of 5874.20. A good spurt in the prices were seen all over the counters, whether it be METALS, BANKING, REALTY, TEXTILE, SUGAR, FERTILIZER, OIL & GAS and IT. Even, NIFTY also broke its important support of 5800 on the closing basis. Finally, for the day NIFTY closed at the levels of 5863.25.
Net Selling of Rs. 371.50 Crore in Cash Segment and Net Buying of Rs. 834.86 Crore in F&O Segment by FIIs was witnessed on Wednesday’s Trading Session.
In F&O Segment Net Buying of Rs. 351.43 Crore and of Rs. 715.60 Crore was witnessed in Index Options and Stock Futures, respectively, while, Net Selling was witnessed in Index Futures and Stock Options of Rs. 217.16 Crore and of Rs. 15.01 Crore.
NIFTY JAN FUTURE ended in Premium of 11 points to the Spot NIFTY.
Technically, both the Moving Averages tried to give a Positive Crossover, but could not succeed and after converging have again given a Negative Crossover now. As expected a pullback was witnessed which may extend till the levels of 5960 or 6000. Now the immediate support level comes at 5720 (on the closing basis).
On the Economic Front, AUSTRALIA will be coming out with its Unemployment Rate and Employment Change for the month of November. Machine Tool Orders and Domestic Corporate Goods Price Index for the month of December will be announced in JAPAN. UK will be coming out with its NIESR GDP Estimate for the month of December, Industrial and Manufacturing Production for the month of November. Apart from this, BoE (Bank of England) will also be coming out with its Interest Rate Decision. ECB (European Central Bank) will be coming out with its Interest Rate Decision in EUROPEAN MONETARY UNION. US will be coming out with its Initial Jobless Claims, Continuing Jobless Claims, Producer Price Index for the month of December and Trade Balance for the month of November.
Q3 2011 Results Season will be commencing from Tomorrow, with INFOSYSTCH, SAIL, SINTEX and CMC posting their Quarterly Numbers tomorrow. Traders are suggested to trade cautiously by following Strict Stop Losses and Booking Fast Profits, whereas, Investors are suggested to avoid making Fresh Investments at this point of time in the Markets and Book Profits at each high of the market.
NIFTY is now again trading below its 20-Days EMA (Exponential Moving Average) and 50-Days SMA (Simple Moving Average) of 6002.61 and 5963.23. Both the Moving Averages have again given a Negative Crossover, as Short Term Moving average has crossed the Long Term Moving Average from upside to the southward direction. MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) have again turned southbound, signaling a bit of more selling pressure to come in.
For the day, intraday resistance for NIFTY comes at 5890 / 5920 / 5950 levels. At the same time, 5830 / 5780 / 5750 will act as major intraday support levels.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 42.57 and 45.63, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -27.05 and 16.96, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 15.86, -DI: 34.53, ADX: 21.58: 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 6002.61 and 5963.23. Both the Moving Averages are showing Negative Crossover.
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