Yesterday, NIFTY made a Bullish Engulfing Candlestick Pattern. A respite rally due to short covering was witnessed after a continuous sell off for last six days. An upside retracement from the level of 4920 to 6388 has been drawn on the chart, in which it can be witnessed that NIFTY still closed below its 50% retracement level, which signals that the bears still have made a strong grip in the markets. NIFTY had a flat opening of almost 10-12 points in the positive territory. But after half an hour of the opening, NIFTY entered strongly into the positive territory, followed by the Short Covering in REALTY & INFRA, BANKING & FINANCE, CAPITAL GOODS, TEXTILES, FERTILIZER and SHIIPING Stocks. A bit of value buying was also witnessed in some of the heavily beaten down counters. NIFTY for the day gained almost 100 points and made a high of 5532.65, by crossing all the intraday resistances, but then too the Volume in the Cash Market was very dry. Till the second half of trading session NIFTY traded range bound in the positive territory. Finally, for the day NIFTY ended the session at 5526.75.
Net Buying of Rs. 538.71 Crore in Cash Segment while Net Selling of Rs. 356 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.
In F&O Segment Net Buying of Rs. 3.67 Crore and of Rs. 114.59 Crore was witnessed in Index Options and Stock Futures, respectively, while, Net Selling of Rs. 421.43 Crore and of Rs. 52.84 Crore was witnessed in Index Futures and Stock Options, respectively.
NIFTY FEB FUTURE ended with a Premium of 12.20 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. The levels of 5400 and 5375 are still acting as very Strong Support for NIFTY (on the closing basis). NIFTY after closing below the 50% Retracement level (drawn from 4920 to 6388), signals a cautious approach towards the market and may also touch the level of 38.20% (5375). Now if NIFTY closes above 5500 for 2-3 sessions consecutively, it may witness a pullback till the levels of 5620 and 5700. Currently, 200-Days SMA (Simple Moving Average) of 5624.97 is acting as a good resistance for NIFTY.
On the Economic Front, UK will be coming out with its Halifax House Prices for the month of January. Nonfarm Payrolls, Average Hourly Earnings, Average Weekly Hours and Unemployment Rate for the month of January will be announced in US.
Q3 2011 Results Season has commenced all over the Globe. In INDIA, BALRAMCHIN, CIPLA, DIVISLAB, FINOLEX INDS, HINDCOPPER, NAGARCONST, OFSS and SUZLON will be posting their Quarterly Numbers today. In GERMANY, RE POWER SYSTEMS AG will be posting its Quarterly Numbers today. In UK, BRITISH AIRWAYS will be posting its 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.
NIFTY is now trading below its 20-Days EMA (Exponential Moving Average), 50-Days SMA (Simple Moving Average) and 200-Days SMA of 5666.69, 5850.19 and 5626.08, 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 5550 / 5580 / 5620 levels. At the same time, 5550 / 5475 / 5430 will act as major intraday support levels.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 36.86 and 33.36, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -121.34 and -99.18, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 13.00, -DI: 28.90, ADX: 33.47: The Negative Directional Index has gained strength over the Positive 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 5850.19 and 5666.69. Both the Moving Averages are showing Negative Crossover.
Pre - Market Call:
SYNDIBANK Buy only if it trades above 114 for the Targets of 118 & 120,with the strict Stop Loss of 112.
On the Daily Charts, SYNDIBANK has made a Long White Candlestick with a good spurt in Volume. The candle has also engulfed the previous candle completely in it. Yesterday, the stock made a high of 114 and closed at 113.15. The stock is now facing a small resistance at the level of 114. A good spurt in Volume was witnessed in the last hour of Trading Session yesterday in the stock, hence it is expected that the positive movement in the stock will continue on the next trading session too. Yesterday, the stock has moved above its 20-Days EMA (Exponential Moving Average) and 200-Days SMA (Simple Moving Average) of 109.22 and 112.78, respectively. The 50-Days SMA (Simple Moving Average) is quoting at 119.16, which if crossed will invite more buying in the stock. The 14-Days RSI (Relative Strength Index) is quoting at 52.78 on the Charts (RSI below 50 indicates weakness or confirms the Selling signal). The Positive Directional Index (21.80) is still below the Negative Directional Index (23.38), ADX (Average Directional Index) has gained strength on the Intraday Charts and is quoting at 32.83 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 SYNDIBANK only if it trades above 114 for the Targets of 118 & 120, with the strict Stop Loss of 112.
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