Yesterday, NIFTY made a Black Opening Marubozu Candlestick Pattern, with a heavy selling pressure witnessed in the markets. NIFTY had a muted Opening of almost 35-40 points with the positive bias and made a high of 5726.10, which was very close to the opening level of 5725.30. After kissing the day’s high, NIFTY started slipping with BANKING, REALTY & INFRA, TEXTILES, SHIPPING, METALS and IT too in the latter half of the session. A brutal selloff was witnessed in the broader markets too. NIFTY witnessed a major selloff in the second half of the trading session. REALTY & INFRA Stocks dipped almost 4%-6% for the day, some of them even made their new 52-Week Low. NIFTY for the first time since September 2008 breached the level of 5600 in intraday by making a low of 5594.95 (almost 90 points in the negative territory) for the day. It may be said that after breaching the level of 5620 (200-Days SMA is at 5620), a panic selloff was also witnessed which led to bloodbath in the markets. Rising of Inflation Expectation from 5.5% to 7% by RBI (Reserve Bank of India) in its latest Credit Policy Announcement deepened the cut in Interest Rate Sensitive Stocks. Finally, for the day NIFTY closed at the levels of 5620 (a very crucial support for it). NIFTY should have witnessed a pullback due to short covering, but failing all the expectation it even breached its Crucial Support of 5600 in intraday.
Net Selling of Rs. 1651.41 Crore in Cash Segment while Net Buying of Rs. 582.25 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.
In F&O Segment Net Buying of Rs. 1784.33 Crore and of Rs. 9.79 Crore was witnessed in Index Options and Stock Options, respectively, while, Net Selling was of Rs. 1171.80 Crore and of Rs. 40.07 Crore was witnessed in Index Futures and Stock Futures, respectively.
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. The levels of 5600 and 5580 are still acting as Strong Support for NIFTY (on the closing basis). As, stated earlier that the formation of a Long Black Candlestick Pattern, engulfing its previous candle completely and also closing below the four days prior made Doji Candlestick, signals a cautious approach towards the market. Yesterday’s closing proved the same. Now if NIFTY closes below 5600 for 2-3 sessions consecutively, it will attract more selling pressure. Currently, 20-Days EMA (Exponential Moving Average) of 5789.09 is acting as a good resistance for NIFTY.
On the Economic Front, EUROPEAN MONETARY UNION will be coming out with its M3 Money Supply for the month of December. Q4 Gross Domestic Product and Real Personal Consumption Expenditures 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, ALBK, ALOKTEXT, BEL, BANKBARODA, CROMPGREAV, EIDPARRY, FEDERALBNK, HAVELLS, HCL-INSYS, IOB, JPASSOCIAT, ONGC, ORIENTBANK, STRTECH, TITANIND, UCOBANK and TATAGLOBAL will be posting their Quarterly Numbers today. In FRANCE, AREVA S.A. will be posting its Quarterly Numbers today. In UK, ASTRAZENECA PLC will be posting its Full Year Numbers today. In US, THE PROCTER & GAMBLE COMPANY, COLGATE-PALMOLIVE COMPANY, ELI LILLY AND COMPANY, AT&T INC., The Timken Company, Ultratech Inc., and Amazon.com Inc. will be posting their Quarterly Numbers today. 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 trading below its 20-Days EMA (Exponential Moving Average), 50-Days SMA (Simple Moving Average) and 200-Days SMA of 5789.09, 5898.76 and 5620, respectively. 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 5630 / 5655 / 5680 levels. At the same time, 5580 / 5550 / 5530 will act as major intraday support levels.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 34.31 and 38.21, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -85.77 and -76.86, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 15.48, -DI: 28.74, ADX: 28.40: 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 5898.76 and 5789.09. Both the Moving Averages are showing Negative Crossover.
Pre - Market Call:
MPHASIS Sell at the levels of 664-663 for the Targets of 650 & 645,with the strict Stop Loss of 671.
On the Daily Charts, MPHASIS has made a Long Black Candlestick, with a considerable good spurt in Volume. Yesterday’s Candle has engulfed many previous day candles into it and it also closed much below the Doji Candlestick’s low too, made the day before. The stock even breached its 20-Days EMA (Exponential Moving Average) of 674.39 by making a low of 664.55 and closing at 668.10 for the day. The stock is having a small support at the levels of 664-663, which if breaches will invite more selling pressure. The 50-Days SMA (Simple Moving Average) is quoting at 641.80. The 14-Days RSI (Relative Strength Index) is quoting at 49.60 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (20.48) is still above the Negative Directional Index (14.24), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 32.08 on the Daily Charts. ADX’s value above 20 and near 40 indicates that the underlying trend is strengthening.
Hence, it is recommended to sell MPHASIS at the levels of 664-663 for the Targets of 650 & 645, with the strict Stop Loss of 671.
ROLTA Sell only if it trades below 141 for the Targets of 138 & 136,with the strict Stop Loss of 142.50.
On the Daily Charts, ROLTA has made a Black Opening Marubozu Candlestick, with a considerable good spurt in Volume. Yesterday’s Candle has closed much below the previous four candles too. The stock opened below its 20-Days EMA (Exponential Moving Average) of 148.26 by opening at 148. For the day it made a low of 141.70 and also closed at 142.65. The stock is already trading much below its 50-Days SMA (Simple Moving Average) of 154.60. The stock is having a small support at the level of 141, which if breaches will invite more selling pressure. The 14-Days RSI (Relative Strength Index) is quoting at 39.83 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (16.93) is below the Negative Directional Index (27.45), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 22.38 on the Daily Charts. ADX’s value above 20 and near 40 indicates that the underlying trend is strengthening.
Hence, it is recommended to sell ROLTA only if it trades below 141 for the Targets of 138 & 136, with the strict Stop Loss of 142.50.
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