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 sixth consecutive trading session to be ended in red. It was a Big Day for the Markets as RBI (Reserve Bank of India) was going to announce its Credit Policy for 2011-12. Market was expecting an increase in Interest Rates due to increasing inflationary pressures and Asset Quality Problem among the Banks. NIFTY witnessed a muted opening in the negative terrain of almost 20-25 points and returned in Green in a short while. BANKING & REALTY Stocks started with a positive note unlike last three trading sessions. Till the announcement of Credit Policy market traded a bit range-bound, but as the Credit Policy timing was nearing a bit of choppiness was being witnessed in the Markets. The central bank announced a 50 basis points hike in repurchase rate (7.25%) and reverse repurchase rate (6.25%) in its aim to tackle inflationary pressures. RBI also increased savings bank rate to 4% from 3.5%, for the first time in 19 years. Immediately after the announcement, market became extremely volatile for about 10-15 minutes and slipped sharply led by Rate Sensitive Sector Stocks (BANKING & FINANCE, AUTO, REALTY & INFRA, METAL, CEMENT, etc.). It was truly an eventful day for the markets. NIFTY slipped almost 150 points for the day, breaching all its important intraday support levels. A bloodbath was witnessed in Rate Sensitive Sector Stocks, as they registered a dip of almost 5-8% for the day. NIFTY made a low of 5554.84. Selling was mainly triggered by panic among the traders, as the loans will become more costly for the Corporates as well as common man. For the day, NIFTY closed near to the day’s low at 5565.25.
Technically, NIFTY is again reverting from the resistance placed at 28.60% Retracement level (5893.47) and yesterday it also breached the 50.00% Retracement level of 5620 by making a low of 5554.85 and closing at 5565.25. 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. A convergence between 20-Days EMA (Exponential Moving Average) and the 50-Days SMA (Simple Moving Average) can be witnessed on the Charts. After making consecutive lower lows and closing lower day-by-day, NIFTY breached its crucial support of its 200-Days SMA of 5750.00 on the Closing Basis. Now, the level of 5550 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, UK will be coming out with its PMI Construction, Halifax House Prices, Nationwide Housing Prices, Mortgage Approvals and M4 Money Supply for the month of March. Purchasing Manager Index Services for the month of April will be announced in GERMANY. EUROPEAN MONETARY UNION will be announcing their Purchasing Manager Index Services for the month of April and Retail Sales for the month of March. MBA Mortgage Applications, ISM Non-Manufacturing and ADP Employment Change for the month of April will be announced in US.
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. ESSEL PROPACK, HEROHONDA, PNB and TORRENT POWER will be announcing their Q4 FY11 Results tomorrow in INDIA. Siemens AG will be coming out with its Q1 FY11 Results in GERMANY. Alstom SA and BNP Paribas SA will be coming out with their Q1 FY11 Results in FRANCE. Time Warner Inc, KKR and Co LP will be coming out with their Q1 FY11 Results in US.
NIFTY has breached its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5757.41, 5750.00 and 5630.91, respectively on the Closing Basis. 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 37.58 and 50.48, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -7.91 and 67.61, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 19.66, -DI: 32.34, ADX: 21.73: 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 5750.00, 5630.91 and 5757.41.
For the day, intraday resistance for NIFTY comes at 5580 / 5620 / 5650 levels. At the same time, 5520 / 5480 / 5450 will act as major intraday support levels.
Some Trading Stats of the Tuesday’s (03rd May, 2011) Trading Session:
Net Selling of Rs. 1178.66 Crore in Cash and of Rs. 674.68 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.
Net Selling of Rs. 472.97 Crore in Proprietory Trades Segment, whereas, Net Buying of Rs. 18.11 Crore and of Rs. 1664.12 Crore was witnessed in Mutual Funds and Others, respectively by FIIs on Tuesday.
In F&O Segment Net Selling of Rs. 1637.64 Crore, of Rs. 593.85 Crore, of Rs. 63.01 Crore was witnessed in Index Futures, Index Options and Stock Options Segment, respectively, whereas, Net buying of Rs. 1619.82 Crore was witnessed in Index Options Segment.
NIFTY MAY FUTURE ended in a Premium of 3.46 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
AMBUJACEM: Can dip to the levels of 146/145, if breaches the level of 149.
AXISBANK: Can dip to the levels of 1200/1190, if breaches the level of 1225.
BAJAJ-AUTO: Can dip to the levels of 1200/1190, if breaches the level of 1225.
DLF: Can dip to the levels of 215/214, if breaches the level of 220.
GAIL: Can dip to the levels of 435/432, if breaches the level of 444.
ICICBANK: Can dip to the levels of 1040/1030, if breaches the level of 1065.
IDFC: Can dip to the levels of 131, if breaches the level of 134.
JPASSOCIAT: Can dip to the levels of 81.30/80.70, if breaches the level of 84.20.
LT: Can dip to the levels of 1515/1500, if breaches the level of 1530.
PNB: Can dip to the levels of 1075/1065, if breaches the level of 1090.
RANBAXY: Can dip to the levels of 435/432, if breaches the level of 445.
SBIN: Can dip to the levels of 2530/2520, if breaches the level of 2570.
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