Yesterday, NIFTY made a Bullish Hammer Candlestick Pattern; it requires confirmation of the implied trend reversal by a white candlestick, a large gap up or a higher close on the next trading day. NIFTY witnessed a Gap Down Opening of almost 55-60 points due to, continued uptrend in Crude on concerns that crisis in Libya would spread to the oil producing neighbors and due to political instability after six ministers from DMK, a key ally to the congress said that they will meet the Prime Minister and hand over their resignation letters. A blunt cut was witnessed in AUTO, METAL, INFRA, MINING, CAPITAL GOODS, BANKING, IT and FINANCE Stocks. After holding the level of 5465 for a while after opening, NIFTY dipped more without any break and made a low of 5408.45. It may be said that the sharp dip in NIFTY was only witnessed due to negative news flow both domestically and globally. NIFTY continuously made new low in Intraday trade which gripped the investors into fear again, resulting in low volume trading for the day. In the last hour of trading, NIFTY witnessed a comeback and many FINANCE, BANKING, REALTY, PHARMA and METAL Stocks turned into Green. Finally, for the day NIFTY posted a closing of 5463.15.
Net Selling of Rs. 92.24 Crore in Cash Segment and of Rs. 1264.32 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.
In F&O Segment Net Buying of Rs. 977.60 Crore and of Rs. 24.33 Crore was witnessed in Index Options and Stock Options, respectively, while, Net Selling of Rs. 1922.97 Crore and of Rs. 343.28 Crore was witnessed in Index Futures and Stock Futures Segment, respectively.
NIFTY MAR FUTURE ended in a Premium of 19.30 points to the Spot NIFTY.
Technically, NIFTY is trading below the Retracements drawn from the high of 6338.50 to the low 5177.70, as drawn on the chart. It can be witnessed that NIFTY faces its resistance at 5650 (it also reverted earlier from the high of 5599.25), the 61.80% Retracement Level. Yesterday, NIFTY almost touched its crucial support of 5400 by making a low of 5408.45 and it also breached its 20-Days EMA of 5465.30 by making a low of 5408.45. 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 reflects more selling pressure in the coming sessions. Even, the 50-Days SMA has signaled a negative crossover by crossing 500-Days SMA from upside, hence showing more selling pressure to creep in. Now, the NIFTY may witness a pullback till the levels of 5500 and 5550 (on closing basis). On the other hand, the level of 5400 is acting as a Strong Support on the Closing Basis for NIFTY.
On the Economic Front, JAPAN will be coming out with its Eco Watchers Survey, Outlook for the month of February and Core Machinery Orders and Machine Tool Orders for the month of January. BRC Retail Sales Monitor and RICS House Price Balance for the month of February will be announced in UK. GERMANY will be coming out with its Factory Orders for the month of January.
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 trading well below its 20-Days EMA, 50-Days SMA and 200-Days SMA of 5465.30, 5656.54 and 5640.71, respectively. MACD (Moving Average Convergence Divergence) is still signaling a bit of more selling pressure to come in, but at the same time, RSI (Relative Strength Index) has turned northbound.
For the day, intraday resistance for NIFTY comes at 5480 / 5520 / 5550 levels. At the same time, 5420 / 5375 / 5350 will act as major intraday support levels.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 48.24 and 46.89, respectively, showing a negative crossover.
2. MACD (26 Days & 12 Days): Their Values are -34.41 and -61.68, respectively. a negative crossover is indicated by both the Moving Averages.
3. +DI: 23.07, -DI: 24.91, ADX: 18.88: 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 5640.71 and 5465.30. Both the Moving Averages are showing Negative Crossover.
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