Yesterday, NIFTY made a High Wave Candlestick Pattern, showing a great amount of indecision in the market. The formation of this candlestick pattern means that end result was not different from the initial open despite the whole excitement and volatility during the day. Also, this candle did not confirm the formation of day before yesterday's Bullish Hammer Candlestick Pattern. NIFTY witnessed a very flat positive opening of almost 2-5 points, and it immediately lifted almost 30 points to the day’s high of 5592.90. After touching the day’s high, NIFTY traded almost in a range of 15 points. Sentiments within in the markets were disturbed as soon as reports came out that the government will raise diesel prices by Rs 4 per litre. Soon, the key indices reversed their gains to fall back into the negative terrain. NIFTY dragged to the day’s low of 5514.55 (almost 30 points in the Negative Terrain), led by Rate Sensitive Sectors like AUTO, BANKING & FINANCE and METAL. FMCG sector was the Star Performer of the day. However, the markets managed to recover from the day's lows, but the upmove was not strong enough to push the markets above the equatorial line. For the day, NIFTY closed near the day’s low at 5541.25.
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 Producer Price Index, Retail Sales, Consumer Price Index and Industrial Production for the month of April. Coincident Index, Leading Economic Index and Trade Balance – BOP Basis for the month of March and also Money Supply M2+CD and Current Account for the month of April will be announced in JAPAN. GERMANY will be coming out with its Wholesale Price Index and Consumer Price Index for the month of April. Trade Balance for the month of March and Bank of England’s Quarterly Inflation Report for Q1 will be announced in UK. US will be coming out with its MBA Mortgage Applications, Trade Balance for the month of March and Monthly Budget Statement 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. ABB, AKZOINDIA, APOLLOTYRE, BFUTILITI, DEEPAKFERT, GRASIM, ISPATIND and TANLA will be announcing their Q4 FY11 Results tomorrow in INDIA. HSBC USA Inc (New) and CISCO Systems Inc., Walt Disney Co. will be coming out with their Quarterly Results in US.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5667.94, 5753.25 and 5635.11, 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 39.64 and 42.34, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -95.00 and -23.91, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 16.08, -DI: 29.17, ADX: 24.89: 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 5753.25, 5635.11 and 5667.94.
Some Trading Stats of the Tuesday’s (10th May, 2011) Trading Session:
Net Buying of Rs. 25.02 Crore in Cash and of Rs. 908.56 Core in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.
Net Selling of Rs. 1101.32 Crore, in Proprietory Trades, whereas, Net Buying of Rs. 42.82 Crore and of Rs. 473.98 Crore was witnessed in Mutual Funds and Others Segment, respectively by FIIs on Tuesday.
In F&O Segment Net buying of Rs. 665.80 Crore, of Rs. 76.04 Crore, of Rs. 153.25 Core and of Rs. 13.47 Crore was witnessed in Index Futures, Index Options, Stock Futures and Stock Options Segment, respectively.
NIFTY MAY FUTURE ended in a Premium of 4.25 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
HINDUNILVR: Can touch the levels of 305/307, if moves above the level of 298.
NTPC: Can touch the levels of 184/185, if moves above the level of 181.
RANBAXY: Can touch the levels of 462/464, if moves above the level of 452.
STER: Can touch the levels of 178/179, if moves above the level of 174.50.
AXISBANK: Can dip to the levels of 1210/1200.
MARUTI: Can dip to the levels of 1215/1200, if breaches the level of 1235.
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.
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