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 eighth consecutive trading session to be ended in red. NIFTY witnessed a muted opening in the negative terrain of almost 8-10 points, but it immediately lifted up to day’s high of 5560.30, led mainly by OIL & GAS and ENERGY Sector Stocks. After the morning session, NIFTY continued to trade in the range of just 15 points till the second half of trading session. Eventually, a deep intraday cut was witnessed in REALTY & INFRA, METAL and BANKING & FINANCE Sector Stocks. Markets tried to maintain above the crucial support levels, but at the end gave a deep cut. The indices, then, continued to pile on losses and hit six-week low levels. NIFTY nosedived almost 90 points for the day by making a low of 5443.65. It seems that at every high of the day, Markets are being battered by creating short positions. For the day, NIFTY closed near the day’s low at 5459.85.
Technically, NIFTY is again reverting from the resistance placed at 28.60% Retracement level (5893.47) and yesterday it also touched the 63.80% Retracement level of 5450 by making a low of 5443.65 and closing at 5459.85. 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). In one way NIFTY has completed the downward retracement with a consecutive selloff for eight trading sessions. After crossing all the retracements successfully, it again reverted 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. NIFTY breached the upper trendline (marked as 2) of this channel earlier, but yesterday it closed even below the lower trendline (marked as 1) of the same channel. But at the same time, NIFTY managed to close above 63.80% retracement level. The convergence of 20-Days EMA (Exponential Moving Average) and the 50-Days SMA (Simple Moving Average) turned into a Negative Crossover yesterday, as 20-Days EMA crossed the 200-Days SMA from upside, signaling a selloff in the markets. The same crossover can be expected between 20-Days EMA and 50-Days SMA. If this time NIFTY did not take the support of 5450 and reverted, it may test the previous lows of 5370 and 5180 too. This time selling pressure is more witnessed due to Sentimental Reasons, continuous Net Outflow from the FIIs since last five-six trading sessions, and deep correction in the stocks prices in a minimal time. Now, the level of 5450 is acting as a Strong Support on the Closing Basis for NIFTY, whereas the level of 5800 is acting as a crucial Resistance on the Closing Basis.
On the Economic Front, UK will be coming out with its Halifax House Prices and Producer Price Index for the month of April. Industrial Production for the month of March will be announced in GERMANY. US will be coming out Average Weekly Hours and Consumer Credit Change for the month of March, Unemployment Rate, Average Hourly Earnings and Nonfarm Payrolls for the month of April.
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. AMAREMEDIES, CADILA HEALTH, CENTRALBNK, EICHER MOTORS, FEDERALBNK, GLAXOSMITH, GESHIP, KECINTL, KSK, MTNL, NIITECH, PIRHEALTH, ROLTA, UNIONBANK and WALCHANDNAGAR will be announcing their Q4 FY11 Results tomorrow in INDIA. BASF SE, Deutsche Telekom AG and COMMERZBANK AG will be coming out with their Q1 FY11 Results in GERMANY. Alcatel Lucent SA will be coming out with its Q1 FY11 Results in FRANCE.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5710.09, 5751.08 and 5630.74, 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.
Indicators have reached their Oversold Region that too in very less time, so a sharp pullback can also be expected in the next few trading sessions, if NIFTY continuous to trade above the level of 5450.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 32.47 and 44.59, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -47.38 and 28.61, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 16.92, -DI: 35.84, ADX: 23.29: 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 5751.08, 5630.74 and 5710.09.
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.
Some Trading Stats of Thursday’s (05th May, 2011) Trading Session:
Net Selling of Rs. 779.48 Crore in Cash and of Rs. 1029.64 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.
Net Selling of Rs. 64.07 Crore and of Rs. 1435.89 Crore in Mutual Funds and Proprietory Trades Segment, whereas, Net Buying of Rs. 1750.06 Crore and Others, respectively was witnessed by FIIs on Thursday.
In F&O Segment Net Selling of Rs. 1346.81 Crore was witnessed in Index Futures, whereas, Net buying of Rs. 36.90 Crore, of Rs. 277.65 Crore and of Rs. 2.63 Crore was witnessed in Index Options, Stock Futures and Stock Options Segment, respectively.
NIFTY MAY FUTURE ended in a Discount of 1.45 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
BAJAJ-AUTO: Can dip to the levels of 1350/1240, if breaches the level of 1275.
BHEL: Can dip to the levels of 1960/1950, if breaches the level of 1985.
CIPLA: Can dip to the levels of 298/296, if breaches the level of 304.
DLF: Can dip to the levels of 208/204, if breaches the level of 214.
GRASIM: Can dip to the levels of 2260/2250, if breaches the level of 2300.
HDFC: Can dip to the levels of 635/630, if breaches the level of 650.
HINDALCO: Can dip to the levels of 197/196, if breaches the level of 200.
ICICIBANK: Can dip to the levels of 1000/995, if breaches the level of 1020.
ITC: Can dip to the levels of 170/168.
NTPC: Can dip to the levels of 170/168.
HEROHONDA: Can touch the levels of 1745/1755.
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