On Friday, NIFTY made a Long Black Candlestick Pattern, with a long upper shadow, driven by Monthly Inflation Data. If a look at Candle is taken, the candle’s body has opened below the previous day’s candle’s close and also it closed much below that, signaling a heavy selling pressure pushed purely by panic or negative sentiments. NIFTY had a muted opening of almost 4-5 points in the negative bias. NIFTY took a dip initially (only in half hour of the session) of almost 35-40 points. Then it bounced back with OMCs, SUGAR and PHARMA Sector Stocks witnessing buying. Before the time of announcement of Monthly Inflation Data, NIFTY recovered fully from its day’s low and started trading flat. After the announcement, markets reacted positively to the Monthly Inflation Numbers, which were 8.43% (Dec) vs 7.48% (Nov), as they were in line with market expectations. NIFTY turned Green with almost 65-70 points up and made a high of 5858.75 for the day. All the sectors, whether it is BANKING, PHARMA, METALS, AUTO, REALTY, TEXTILE, SUGAR, FERTILIZER & CHEMICAL, POWER, CAPITAL GOODS, MINING all witnessed a good bounce back from the day’s low. But the volume with this positive movement of almost 70 points was next to nothing, due to which NIFTY again reverted from the day’s high to the day’s low. NIFTY nosedived to the day’s low of 5638.10 (dipping almost 120 points for the day), with a brutal selloff all over the counters. The selling pressure was swift as it breached its important support level on the Weekly Basis of 5690. For the day, NIFTY made a low of 5638.10. 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 5645.05.
Net Selling of Rs. 748.60 Crore in Cash Segment and Net Buying of Rs. 1336.23 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.
In F&O Segment Net Buying of Rs. 207.84 Crore, of Rs. 950.20 Crore and of Rs. 206.90 Crore was witnessed in Index Futures, Index Options and Stock Futures, respectively, while, Net Selling was witnessed in Stock Options of Rs. 28.71 Crore.
NIFTY JAN FUTURE ended in Premium of 8.95 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). Nifty as expected closed below its important support of 5720 and 5690. Now a technical pullback or say Short Covering is expected in the Markets, but due to uncertain Global and Domestic Environment, NIFTY may dive again in the opening itself. The levels of 5725 and 5750 are acting as Strong Resistance for NIFTY, whereas, the immediate support level comes at 5580 (on the closing basis).
On the Economic Front, JAPAN will be coming out with its Consumer Confidence Index for the month of December. Rightmove House Price Index for the month of January will be announced in UK. US will be witnessing a Trading Holiday on account of Martin Luther King’s Birthday.
Q3 2011 Results Season has commenced all over the Globe. In India, AXISBANK, ESSAROIL, INDUSINDBANK, LT, PFC and TCS will be 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 5927.67 and 6001.28. 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 5690 / 5720 / 5750 levels. At the same time, 5620 / 5580 / 5550 will act as major intraday support levels.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 32.35 and 41.59, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -61.52 and -1.87, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 13.59, -DI: 32.45, ADX: 23.31: 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 6001.28 and 5927.67. Both the Moving Averages are showing Negative Crossover.
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