Nifty Outlook for 18th February 2011

Yesterday, NIFTY made a Long White Candlestick Pattern, with a longer lower shadow.  After making a Doji Candlestick Pattern since last two days, NIFTY gave a bullish on the third day. NIFTY had a muted opening of almost 15-20 points in the positive territory. But immediately it slipped into red and made a low of 5463.40 with all the majority sectors dipping to day’s low. After kissing the day’s low NIFTY immediately witness an excellent bounce back. Since last two days, NIFTY touched its important resistance of 5500 but was not able to maintain above it, but yesterday NIFTY again touched the level of 5500 and maintained above it in intraday very well. BANKING & FINANCE, REALTY INFRA, SHIPPING, METALS, CAPITAL GOODS, AUTO, IT and CONSUMER GOODS all bounced back from day’s low and helped NIFTY to cross all the Intraday Resistances by making it touch the levels of 5553. It was again a low volume trading session, as it was in the last two days. Finally, for the day NIFTY registered a Robust closing of 5546.45.

Net Buying of Rs. 37.99 Crore in Cash Segment and of Rs. 1397.40 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.

In F&O Segment Net Buying of Rs. 571.45 Crore, of Rs. 462.63 Crore, of Rs. 342.15 Crore and of Rs. 21.16 Crore was witnessed in Index Futures, Index Options, Stock Futures and Stock Options, respectively.

NIFTY FEB FUTURE ended in a Premium of 3.45 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 again strongly closed above the 50% retracement level of 5435 at 5546.45. NIFTY crossed its immediate resistance of 20-Days EMA (Exponential Moving Average) of 5501.36 by making a high of 5553 and closing at 5546.45. 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 5550 and 5600 (on closing basis). Currently, 200-Days SMA (Simple Moving Average) of 5635.46 is acting as a good resistance for NIFTY. On the other hand, the level of 5400 is acting as a Strong Support on the Closing Basis for NIFTY.

On the Economic Front, GERMANY will be coming out with its Producer Price Index for the month of January. Retail Sales for the month of January will be announced in UK.

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 still trading below its 20-Days EMA, 50-Days SMA and 200-Days SMA of 5501.36, 5746.48 and 5635.46, 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 5580 / 5620 / 5650 levels. At the same time, 5500 / 5480 / 5450 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 49.71 and 39.81, respectively, showing a negative crossover.

2.  MACD (26 Days & 12 Days): Their Values are -92.57 and -132.66, respectively. a negative crossover is indicated by both the Moving Averages.

3.  +DI: 22.12, -DI: 23.06, ADX: 31.61: 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 5746.48         and 5501.36. Both the Moving Averages are showing Negative Crossover.