Yesterday, NIFTY made a Bullish Hammer Candlestick Pattern. If the hammer would have been formed by a close above the open thus causing a white body, the situation could have been even better for the bulls. The confirmation of this pattern is characterized by a white candlestick, a large gap up or a higher close on the next trading day. NIFTY witnessed a positive opening of almost 30 points, but it immediately became flat and traded almost at the same level as of Friday’s Closing. After trading flat for some time, Markets flirted with the resistance level and started weakening. Losing its sheen, at time of opening NIFTY erased it all and made a low of 5502.40 for the day. For whole of the session, NIFTY maintained very well above the crucial support level of 5500. Markets again bounced swiftly from the day’s low, supported by short covering and buying at intraday low levels. NIFTY again entered into the positive terrain and made a high of 5586.05 for the day. It may be said that the markets although traded in a range but had extreme volatility. For the day, NIFTY closed near the day’s low at 5551.10.
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, CHINA will be coming out with its M2 Money Supply and Trade Balance for the month of April. Import Price Index for the month of April, Wholesale Inventories for the month of March and IBD/TIPP Economic Optimism for the month of May 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. ASIANPAINT, CHAMBLFERT, GLENMARK, HDFC, JUBILANT, NIIT, NTPC, OFSS, RANBAXY, RCF, RENUKA, SOBHA, TRIGYNTECH, and TRIVENI will be announcing their Q4 FY11 Results tomorrow in INDIA. Walt Disney Co. will be coming out with its Q1 FY11 Results in US.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5681.28, 5752.75 and 5681.28, 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 40.21 and 43.01, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -75.86 and -6.13, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 16.54, -DI: 31.01, ADX: 24.58: 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 5752.75, 5681.28 and 5633.04.
For the day, intraday resistance for NIFTY comes at 5580 / 5620 / 5650 levels. At the same time, 5500 / 5475 / 5445 will act as major intraday support levels.
Some Trading Stats of the Monday’s (09th May, 2011) Trading Session:
Net Buying of Rs. 196.42 Crore in Cash and of Rs. 584.51 Core in F&O Segment by FIIs was witnessed on Monda’s Trading Session.
Net Selling of Rs. 252.20 Crore, of Rs. 145.73 Crore and of Rs. 1782.83 Crore was witnessed in Mutual Funds, Proprietory Trades Segment and Other Segments, respectively by FIIs on Monday.
In F&O Segment Net Selling of Rs. 230.28 Crore was witnessed in Index Options, whereas, Net buying of Rs. 539.33 Crore, of Rs. 252.75 Crore and of Rs. 22.71 Crore was witnessed in Index Futures, Stock Futures and Stock Options Segment, respectively.
NIFTY MAY FUTURE ended in a Premium of 7.55 points to the Spot NIFTY.
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