Nifty Outlook for 22nd February 2011

Yesterday, NIFTY made a Small White Candlestick Pattern.  NIFTY had a muted opening of almost 15-20 points in the positive territory with majority of the Index Constituents strongly opening (almost 1%-1.5% plus). But immediately after opening in Green NIFTY turned in Red, led mainly by some the Index Constituents and as well as MID Cap Stocks.  A selling pressure was witnessed in IT, AUTO, METALS, MINING, OIL & GAS, BANKING & FINANCE, SHIPPING and TEXTILE Sectors. NIFTY made lower lows and lower highs in Intraday and almost tested the Crucial Support of 5400 by making a low of 5413.10 for the day. But since the starting of the trading session, a good Buying Interest was witnessed in BUDGET SPECIAL Stocks, like, EDUCATION, SUGAR and FERTILIZER & CHEMICALS. A very range bound and almost no volume session was witnessed till the last 45 minutes of the day. But after kissing the day’s low, NIFTY took an immediate reversal with majority of the Index Constituents and other Blue Chip Stocks turning positive for the day. NIFTY rallied almost 50 points from the day’s low and made a high of 5526.25 for the day.  CAPITAL GOODS, REALTY & INFRA and OIL & GAS were the major turnaround sectors for the day. Finally, for the day NIFTY registered a positive closing of 5518.60.

Net Selling of Rs. 245.42 Crore in Cash Segment and of Rs. 444.48 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.

In F&O Segment Net Buying of Rs. 123.02 Crore and of Rs. 3.28 Crore was witnessed in Stock Futures and Stock Options, respectively, while, Net Selling of Rs. 467.61 Crore and of Rs. 103.17  Crore was witnessed in Index Futures and Index Options, respectively. 

 

NIFTY FEB FUTURE ended in a Premium of 9.55 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. On Friday, it again closed above the 50% retracement level of 5440 at 5458.95. Yesterday, NIFTY again closed above its 20-Days EMA (Exponential Moving Average) of 5499.35 at 5518.60, which again leaves a clue of pullback to be witnessed on the next trading session. 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 Gfk Consumer Confidence Survey for the month of March. Public Sector Net Borrowing for the month of January will be announced in UK. US will be coming out with its S&P/Case-Shiller Home Price Indices for the month of December, Consumer Confidence and Richmond Fed Manufacturing Index for the month of February.

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 has crossed its 20-Days EMA of 5499.35 by making a high of 5526.25 and closing above it at 5518.60, but still it is trading below its 50-Days SMA and 200-Days SMA of 5732.62 and 5638.70, 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 / 5600 levels. At the same time, 5465 / 5430 / 5400 will act as major intraday support levels.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 48.48 and 42.30, respectively, showing a negative crossover.

2.  MACD (26 Days & 12 Days): Their Values are -73.53 and -120.23, respectively. a negative crossover is indicated by both the Moving Averages.

3.  +DI: 21.18, -DI: 21.04, ADX: 27.62: 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 5732.62         and 5499.35. Both the Moving Averages are showing Negative Crossover.