Yesterday, NIFTY made a Black Candlestick Pattern, indicating that Market declined from open to close throughout the trading session and sellers were in control too for whole of the session. It can be interpreted both as a continuation and a reversal pattern. It was an eventful day for the markets yesterday. NIFTY witnessed a negative opening of almost 35 points, due to weak global cues and negative data announced in US overnight. But immediately after opening, NIFTY bounced a bit and traded flatly at the level of 5550. Market kept trading flat till the announcement of March IIP (Index of Industrial Production) Numbers. March IIP has been registered at 7.3% Vs 3.61 (MoM Basis). IIP growth slowed to 7.8% in 2010-11 fiscal from 10.5% expansion in 2009-10. Immediately after this announcement NIFTY bounced to the day’s high of 5572.50, but swiftly slipped into red again. Markets dragged much due to METAL Sector Stocks. Selling continued till the end of the session, also provoked by Negative European Data. The Euro-zone March industrial production was down 0.2% and also U.K. March factory output were weaker than expected. NIFTY breached all its important Support levels, even the level of 5500 and made a low of 5476.30 for the day. 5500 acted as a physiologically strong support level for NIFTY since last three trading sessions, breaching of which invited more panic selling pressure. For the day, NIFTY closed very near to its day’s low at 5486.15.
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 the congestion of consecutive four trading sessions, NIFTY took a southwards breakout. 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 yesterday it gained got neared to 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. 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 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, GERMANY will be coming out with its Q1 Gross Domestic Product. Q1 Gross Domestic Product will also be announced by EUROPEAN MONETARY UNION. US will be announcing its Consumer Price Index for the month of April and Reuters/Michigan Consumer Sentiment Index 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. AREVAT&D, ASTRAZENECA, AUTRALCOKE, BALRAMCHIN, DCHL, DRREDDY, MMTC, MOREPEN LAB, PANACEA BIO, PANTALOONR, SAREGAMA, TATACOFEE and VIDEOCON will be announcing their Q4 FY11 Results tomorrow in INDIA. Credit Agricole SA will be announcing its Q1 FY11 Results tomorrow in FRANCE.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5641.76, 5754.17 and 5644.81, 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 37.09 and 41.20, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -129.23 and -58.82, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 14.29, -DI: 29.73, ADX: 25.88: 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 5754.17, 5644.81 and 5641.76.
Some Trading Stats of the Thursday’s (12th May, 2011) Trading Session:
Net Selling of Rs. 420.03 Crore in Cash and of Rs. 1460.81 Core in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.
Net Selling of Rs. 198.71 in Proprietory Trades and of Rs. 55.89 Crore in Others Segment, whereas, Net Buying of Rs. 116.54 Crore was witnessed in Mutual Funds and Others Segment, respectively by FIIs on Thursday.
In F&O Segment Net buying of Rs. 20.75 Crore was witnessed in Stock Options Segment, respectively, whereas, Net Selling of Rs. 1407.37 Crore, of Rs. 42.43 Crore and of Rs. 31.77 Crore was witnessed in Index Futures, Index Options and Stock Futures Segment.
NIFTY MAY FUTURE ended in a Discount of 4.80 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
AMBUJACEM: Can dip to the levels of 130/129, if breaches the level of 133.
AXISBANK: Can dip to the levels of 1185/1175, if breaches the level of 1200.
BHEL: Can dip to the levels of 1995/1980, if breaches the level of 2020.
GRASIM: Can dip to the levels of 2280/2270, if breaches the level of 2300.
HDFC: Can dip to the levels of 635/632, if breaches the level of 645.
HINDALCO: Can dip to the levels of 192/191, if breaches the level of 195.
IDFC: Can dip to the levels of 128/126, if breaches the level of 130.
JINDALSTEL: Can dip to the levels of 618/615, if breaches the level of 623.
LT: Can dip to the levels of 1480.
SAIL: Can dip to the levels of 150/149, if breaches the level of 153.
SESAGOA: Can dip to the levels of 286/284.
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