On Friday, NIFTY made a Small White Candlestick, with a longer upper shadow, indicating that the Market tried its well to cross its important resistance placed at a high point, but could not sustain and slipped again. NIFTY witnessed a positive opening of almost 35 points, due to the announcement of additional cash subsidy of about Rs 20000 crore to oil market companies (OMCs) for fiscal 2010-11. But immediately made a low of 5472.00 for the day. After touching day’s low NIFTY swiftly covered the previous day’s losses too by making a high of 5605, although it remained stable at the levels of 5550-5560 for much of the time. Till the last hour of trading session, NIFTY remained strong in Green, supported by strong and good European Economic Data too. The Euro-zone gross domestic product expanded by 0.8% in the first quarter of 2011 compared to the previous three months and grew by 2.5% compared to the same period last year. Spanish gross domestic product rose 0.3% in the first quarter of 2011, against growth of 0.2% in the fourth quarter of 2010 also and French gross domestic product rose 1% in the first quarter of 2011, the biggest gain since the second quarter of 2006. After kissing day’s high of 5600, NIFTY slipped back in red in the last hour of the session and lost all its gains by falling almost 70 points from the day’s high. For the day, NIFTY at 5544.75.
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. Earlier, a Negative Crossover was witnessed between 200-Days SMA and 20-Days EMA. Now the convergence of 20-Days EMA (Exponential Moving Average) and the 50-Days SMA (Simple Moving Average) also turned into a Negative Crossover yesterday, as 20-Days EMA crossed the 50-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, JAPAN will be coming out with its Consumer Confidence Index for the month of April. Trade Balance for the month of March and Consumer Price Index for the month of April will be announced by EUROPEAN MONETARY UNION. US will be announcing its NY Empire State Manufacturing Index and NAHB Housing Market Index for the month of May, Net Long-term TIC Flows and Total Net TIC Flows for the month of March.
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. ASAHI INDIA, EDELWEISSCAP, HINDMOTOR and JSWSTEEL will be announcing their Q4 FY11 Results tomorrow in INDIA.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5632.52, 5754.74 and 5649.04, 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 42.27 and 41.41, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -139.34 and -74.92, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 15.31, -DI: 26.74, ADX: 25.98: 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 5754.74, 5649.04 and 5632.52.
Some Trading Stats of the Friday’s (13th May, 2011) Trading Session:
Net Selling of Rs. 161.35 Crore in Cash, while Net Buying of Rs. 1739.16 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.
Net Selling of Rs. 760.14 Crore in Proprietory Trades, whereas, Net Buying of Rs. 37.84 Crore and of Rs. 2183.12 Crore was witnessed in Mutual Funds and Others Segment, respectively by FIIs on Friday.
In F&O Segment Net buying of Rs. 187.67 Crore, of Rs. 1083.00 Crore, of Rs. 464.93 Crore and of Rs. 3.56 Crore was witnessed in Index Futures, Index Options, Stock Futures and Stock Options Segment, respectively.
NIFTY MAY FUTURE ended in a Premium of 14.15 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
AXISBANK: Can touch the levels of 1270/1280, if moves above the level of 1255.
DRREDDY: Can touch the levels of 1675/1685.
ITC: Can touch the levels of 193/194, if moves above the level of 190.
JPASSOCIAT: Can touch the levels of 90, if moves above the level of 87.50.
RANBAXY: Can touch the levels of 505/508, if moves above the level of 495.
WIPRO: Can touch the levels of 448/450.
HDFC: Can dip to the levels of 635/625, if breaches the level of 645.
For the day, intraday resistance for NIFTY comes at 5580 / 5620 / 5650 levels. At the same time, 5520 / 5475 / 5450 will act as major intraday support levels.
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