Nifty Outlook for 16th February 2011

Yesterday, NIFTY made a White Doji Candlestick Pattern. NIFTY had a muted opening of almost 5-6 points in the negative territory. NIFTY slipped in red in the earlier trading hours of the day and made a low of 5408.35, with METALS, CAPITAL GOODS, IT, REALTY & INFRA and BANKING & FINANCE trading at day’s low. But immediately, after touching the day’s low it bounced back, with BANKING & FINANCE Stocks lifting the NIFTY to day’s high of 5506.50 (almost 30-35 points in the positive territory). Even METALS, TEXTILES and AUTO Stocks turned into Green. Again a Profit Booking was witnessed in day before yesterday’s Stocks. For the day, NIFTY registered a Robust closing of 5481.

Net Buying of Rs. 233.05 Crore in Cash Segment and of Rs. 23.54 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.

In F&O Segment Net Buying of Rs. 455.31 Crore and of Rs. 416.59 Crore was witnessed in Index Options and Stock Futures, respectively, while, Net Selling of Rs. 844.56 Crore and of Rs. 3.80 Crore was witnessed in Index Futures and Stock Options, respectively.

NIFTY FEB FUTURE ended in a Discount of 4.90 points to the Spot NIFTY.

Technically, NIFTY has completed the Retracements drawn from the low made on 03^rd November, 2009 of 4538.50 to the high made on 05^th November, 2010 of 6388.50, as drawn on the chart, it can be witnessed that NIFTY completed its retracement fully, and has again reverted. Yesterday, it closed above the 50% retracement level of 5430 at 5481. The Candlestick Pattern made yesterday, signals a dip in the market, as NIFTY tried to cross its immediate resistance of 20-Days EMA (Exponential Moving Average) of 5498.18, but could only touch it by making a high of 5506.50 and closed at 5481. Earlier, the 20-Days EMA crossed the 50-Days SMA (Simple Moving Average) from upside and the Negative Crossover of 20-Days EMA over the 200-Days SMA from reflects more selling pressure in the coming sessions. Now, the NIFTY may witness a pullback till the levels of 5500 and 5550. Currently, 200-Days SMA (Simple Moving Average) of 5629.08 is acting as a good resistance for NIFTY.

On the Economic Front, JAPAN will be coming out with its Tertiary Industry Index for the month of December. FDI - Foreign Direct Investment for the month of January will be announced in CHINA. UK will be coming out with its Nationwide Consumer Confidence for the month of January, ILO Unemployment Rate, Average Earnings, Claimant Count Rate for the month of December. ABC/Washington Post Consumer Confidence, MBA Mortgage Applications, Housing Starts, Building Permits, Producer Price Index, Industrial Production and Capacity Utilization for the month of January will be announced in US.

Q3 2011 Results Season has commenced all over the Globe. In INDIA, AVENTISPHARMA and HEXAWARE 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.

NIFTY is now trading below its 20-Days EMA, 50-Days SMA and 200-Days SMA of 5498.18, 5765.29 and 5360.86, 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 5500 / 5530 / 5550 levels. At the same time, 5450 / 5420 / 5380 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 45.30 and 35.33, respectively, showing a negative crossover.

2.  MACD (26 Days & 12 Days): Their Values are -123.29 and -137.87, respectively. a negative crossover is indicated by both the Moving Averages.

3.  +DI: 20.69, -DI: 25.31, ADX: 35.72: 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 5465.29         and 5498.18. Both the Moving Averages are showing Negative Crossover.