Yesterday, NIFTY made a Long Black Candlestick Pattern, which signals panic or capitulation, as it appears after a long decline. NIFTY had a negative opening of almost 30-50 points, backed by INFOSYSTCH Q3 FY11 Numbers, which were not according to the market expectation. An immediate dip was witnessed with the opening, but a recovery of almost 30-35 points (making a high of 5857.75) was witnessed just before the announcement of Weekly Inflation Numbers. Markets slipped in Red, with BANKING Stocks dipping almost 3-5%, and before opening of European Markets NIFTY took a dip of almost 100 points. BANKING and IT stocks witnessed a deep cut again. For the day, NIFTY made a low of 5736.70. Again a Fear of more tightening by RBI (Reserve Bank of India) gripped among the BANKING Stocks, and they took away the markets. Finally, for the day NIFTY closed at the levels of 5751.90.
Net Selling of Rs. 249.77 Crore in Cash Segment and Net Buying of Rs. 553.86 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.
In F&O Segment Net Buying of Rs. 154.24 Crore and of Rs. 437.92 Crore was witnessed in Index Options and Stock Futures, respectively, while, Net Selling was witnessed in Index Futures and Stock Options of Rs. 35.43 Crore and of Rs. 2.87 Crore.
NIFTY JAN FUTURE ended in Premium of 3.90 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. A panic selling again took away the markets, gripped by more tightening by RBI (Reserve Bank of India). Now the closing of this week of NIFTY will decide the further direction of the market. The levels of 5960 and 6000 are acting as Strong Resistance for NIFTY, whereas, the immediate support level comes at 5720 (on the closing basis).
On the Economic Front, GERMANY will be coming out with its Consumer Price Index for the month of December. Producer Price Index for the month of December will be announced in UK. Monthly Inflation Data will be announced in INDIA. EUROPEAN MONETARY UNION will be coming out with its Consumer Price Index for the month of December and Trade Balance for the month of November. Consumer Price Index, Retail Sales, Industrial Production and Capacity Utilization for the month of December, Business Inventories and Reuters/Michigan Consumer Sentiment Index for the month of January will be announced in US.
Q3 2011 Results Season has commenced all over the Globe. In India, HDFC, REIAGROLTD and ZEEL will be posting their Quarterly Numbers tomorrow. On the other hand, JP MORGAN CHASE will be coming out with its Q4 2010 Numbers in US. 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 5943.11 and 5995.26. 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 5770 / 5800 / 5830 levels. At the same time, 5730 / 5700 / 5685 will act as major intraday support levels.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 36.88 and 43.88, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -40.26 and 9.45, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 14.43, -DI: 31.44, ADX: 22.68: 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 5995.26 and 5943.11. Both the Moving Averages are showing Negative Crossover.
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