On Friday, NIFTY made a Long White Candlestick, indicating that the Market had reached to a support level. After an extended decline, the formation of such a Candlestick indicates a potential turning point for the Markets. NIFTY witnessed a robust opening of almost 50 points in the Green Trajectory at 5477.65. Upside was mainly led by oversold Index Constituent Stocks only. Markets then started trading almost flat or range bound, but the stocks started losing their morning sheen. Market was trading range bound but with a Negative Bias. Before the opening of the European Markets, markets took a knock and NIFTY after touching the level of 5550, moved back to 5500, and made a low of 5472.45 for the day. NIFTY again reverted from its intraday low and good support to day’s high of 5564.40. It can be said, that the Markets on Friday was excellent for the Swing Traders and Day Traders. BANKING & FINANCE, AUTO, METALS and REALTY & INFRA led the markets to the day’s high again, as they were the most beaten down stocks. For the day, NIFTY closed near the day’s low at 5551.45.
Technically, NIFTY has completed the southward movement of Fibonnaci Retracement drawn from the High of 6338.50 (08th November, 2010) to the Low of 5177.70 (11th February, 2011). NIFTY faced the resistance placed at 28.60% Retracement level (5893.47) and found the support at the 63.80% Retracement level of 5450 by making a low of 5443.65. After crossing all the retracements successfully, it again is getting reverted from its important support 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 has breached the upper trendline (marked as 2) of this channel earlier, but on Friday it gained almost 90 points taking the support of the lower trendline (marked as 1) of the same channel. 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 RICS House Price Balance and BRC Retail Sales Monitor for the month of April. Trade Balance and Current Account for the month of March will be announced in GERMANY. EUROPEAN MONETARY UNION will be coming out with its Sentix Investor Confidence for the month of May.
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. ADANIPOWER, AUROPHARMA, HINDALCO, HOECL, HINDUNILVR, INDIANB, MUNDRAPORT, PTC, SRF, VARDHAMANTEX and WHIRLPOOL will be announcing their Q4 FY11 Results tomorrow in INDIA. Thomas Cook Group Plc and HSBC Holdings PLC will be coming out with their Q1 FY11 Results in UK.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 55694.98, 5752.00 and 5631.40, 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 40.23 and 43.72, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -57.94 and 11.30, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 15.92, -DI: 33.07, ADX: 24.13: 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 5752.00, 5631.40 and 5694.98.
For the day, intraday resistance for NIFTY comes at 5580 / 5620 / 5650 levels. At the same time, 5530 / 5500 / 5480 will act as major intraday support levels.
Some Trading Stats of the Friday’s (06th May, 2011) Trading Session:
Net Selling of Rs. 655.34 Crore in Cash, while, Net Buying of Rs. 2180.78 Core in F&O Segment by FIIs was witnessed on Friday’s Trading Session.
Net Selling of Rs. 265.20 Crore and of Rs. 1480.23 Crore in Mutual Funds and Proprietory Trades Segment, whereas, Net Buying of Rs. 2775.06 Crore in Others was witnessed by FIIs on Friday.
In F&O Segment Net Selling of Rs. 2.82 Crore was witnessed in Stock Options, whereas, Net buying of Rs. 895.76 Crore, of Rs. 513.67 Crore and of Rs. 774.26 Crore was witnessed in Index Futures, Index Options and Stock Futures Segment, respectively.
NIFTY MAY FUTURE ended in a Premium of 3.55 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
AXISBANK: Can touch the levels of 1285/1295, if moves above the level of 1260.
BAJAJ-AUTO: Can touch the levels of 1350/1360, if moves above the level of 1330.
CIPLA: Can touch the levels of 312/315, if moves above the level of 306.
ICICIBANK: Can touch the levels of 1110/1120, if moves above the level of 1090.
M&M: Can touch the level of 725.
MARUTI: Can touch the levels of 1290/1300, if moves above the level of 1275.
TATAMOTORS: Can touch the levels of 1225/1235, if moves above the level of 1210.
SESAGOA: Can dip to the levels of 285/282, if breaches the level of 290.
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