Yesterday, NIFTY made a Long Black Candlestick, which indicates a Strong Selling Pressure. A Long Black Candlestick may signal panic or capitulation if it appears after a long decline, as it was the fifth consecutive trading session to be ended in red. NIFTY witnessed a muted opening in the negative terrain of almost 15-20 points and continued to trade with full volatility. BANKING Sector was the most beaten down sector as RBI (Reserve Bank of India) is going to announce its Credit Policy tomorrow. NIFTY breached its crucial psychological support of 5700 in intraday by making a low of 5687.70, which led to further panic selling broadly in the BANKING Stocks. Other than BANKING, METALS and AUTO Sectors also witnessed a south bound movement. Selling was mainly due to panic among the traders about the Forthcoming RBI Policy Meet, in which key interest rates are expected to rise. There was no other reason behind Friday’s Selling Pressure. For the day, NIFTY however managed to close above the level of 5700 at 5701.30.
Technically, NIFTY is again reverting from the resistance placed at 28.60% Retracement level (5893.47) and yesterday it also breached the 38.20% Retracement level of 5755 by making a low of 5687.70 and closing at 5701.30. If a look at chart is taken a Downward Fibonacci Retracement has been drawn from the High of 6338.50 (08th November, 2010) to the Low of 5177.70 (11th February, 2011). After crossing all the retracements successfully, now it is again reverting from its important resistance levels. NIFTY has also breached the channel formation on the charts, where a trendline is dropped from the high of 5556.30 made on 04th February, 2011 to the higher highs made later on and the lower trendline drawn from the low of 5177.70 made on 11th February, 2011 to the higher lows made consecutively. Earlier, the 20-Days EMA crossed the 50-Days SMA (Simple Moving Average) from downside and the Positive Crossover of 20-Days EMA over the 200-Days SMA also reflected an upside in the markets. After making consecutive lower lows and closing lower day-by-day, NIFTY breached its crucial support of its 200-Days SMA of 5749.06 on the Closing Basis. Now, the level of 5600 is acting as a Strong Support on the Closing Basis for NIFTY, whereas the level of 5950 is acting as a crucial Resistance on the Closing Basis.
On the Economic Front, CHINA will be coming out with its HSBC Manufacturing PMI for the month of April. Purchasing Manager Index Manufacturing for the month of April and BRC Shop Price Index for the month of April will be announced in UK. EUROPEAN MONETARY UNION will be coming out with its Producer Price Index for the month of March. US will be coming out with its Factory Orders for the month of March and Total Vehicle Sales for the month of April. In INDIA, RBI (Reserve Bank of India), will be announcing its Credit Policy.
Traders are suggested to trade cautiously by following Strict Stop Losses and Booking Fast Profits, whereas, Investors are suggested to make Fresh Investments at this point of time in the Markets in the stocks heavily beaten down with the Averaging Principle.
Q4 FY11 Results Season is running all over the Financial World. Hence, here is a quick look at some important results to be announced domestically and internationally. ESCORTS, ESSAROIL, ESSARSHIP, FINOLEX CABLES, MAHSEAM, PFIZER, SKF, THERMAX and WYETH will be announcing their Q4 FY11 Results tomorrow in INDIA. Hyatt Hotels Corp, Mastercard Inc, Pfizer Inc, and Cognizant Technology Solutions Corp will be coming out with its Q1 FY11 Results in US.
NIFTY has breached its 20-Days EMA and 200-Days SMA of 5777.64 and 5749.06, respectively on the Closing Basis, but at the same time it is maintaining well above its 50-Days SMA of 5629.24. MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) are signaling a bit of more selling pressure to come in.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 45.75 and 53.71, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are 24.22 and 86.49, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 22.24, -DI: 25.40, ADX: 21,52: 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 (200 Days), SMA (50 Days) & EMA (20 Days): The values of these indicators are 5749.06, 5629.24 and 5777.64.
For the day, intraday resistance for NIFTY comes at 5720 / 5750 / 5800 levels. At the same time, 5680 / 5650 / 5620 will act as major intraday support levels.
Some Trading Stats of the Monday’s (02nd May, 2011) Trading Session:
Net Selling of ` 261.03 Crore in Cash and of ` 1209.25 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.
Net Selling of ` 2184.05 Crore in and Other Segments, whereas, Net Buying of ` 94.41 Crore and of ` 1392.58 Crore was witnessed in Mutual Funds and Proprietory Trades, respectivley by FIIs on Monday.
In F&O Segment Net Selling of ` 918.38 Crore, of ` 30.61 Crore, of ` 252.08 Crore and of ` 8.18 Crore was witnessed in Index Futures, Index Options, Stock Futures and Stock Options Segment, respectively.
NIFTY MAY FUTURE ended in a Premium of 24.10 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
KOTAKBANK: Can dip to the levels of 405/400.
M&M: Can dip to the levels of 725/720, if breaches the level of 735.
MARUTI: Can dip to the levels of 1255/1245, if breaches the level of 1280.
SBIN: Can dip to the levels of 2650/2640, if breaches the level of 2680.
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