Yesterday, NIFTY made a Small Black Candlestick. It was a very sluggish trading session for the Markets. NIFTY had a negative opening of almost 15-20 points, due to the announcement of hike in petrol prices by ` 5/liter. Immediately after opening NIFTY made a high of 5541.80, but due to selling pressure in Interest Rate Sensitive Stocks, like BANKING & FINANCE, REALTY & INFRA, AUTO and METAL, NIFTY could not sustain and dipped to the day’s low before the announcement of Monthly Inflation Data for the month of April, which was at 8.66% Vs 9.04% (MoM). After the announcement of Inflation, NIFTY recovered a bit and traded range bound but with the negative bias. In the last hour of trade NIFTY again lost its intraday recovery and made a low of 5487.65. Selling was there on the Global Platform, from Asian to European, as Japan was downgraded by Goldman Sachs and Europe was gripped in the Greek Debt Fear. For the day, NIFTY closed near to the day’s low at 5499.
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, UK will be coming out with its DCLG House Price Index for the month of March, Retail Price Index, and Consumer Price Index for the month of April. ZEW Survey – Economic Sentiment and Current Situation for the month of May will be announced in GERMANY. Housing Starts, Capacity Utilization and Industrial Production for the month of April 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. BAJAJFINSERV, OPTOCIRCUIT and SBIN will be announcing their Q4 FY11 Results tomorrow in INDIA. Vodafone Group PLC will be announcing its results in UK. Wal-Mart Stores Inc. will be coming out with its Q1 FY12 Results in US.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5619.81, 5755.25 and 5648.58, 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 39.53 and 41.04, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -147.40 and -89.42, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 14.63, -DI: 25.56, ADX: 26.06: 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 5755.25, 5648.58 and 5619.81.
Some Trading Stats of the Monday’s (16th May, 2011) Trading Session:
Net Buying of Rs. 47.07 Crore in Cash and of Rs. 241.83 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.
Net Selling of Rs. 69.86 Crore and of Rs. 1945.18 Crore was witnessed in Mutual Funds and Others Segment, respectively, whereas, Net Buying of Rs. 275.88 Crore was witnessed in Proprietory Trades Segment.
In F&O Segment Net buying of Rs. 603.48 Crore and of Rs. 6.30 Crore was witnessed in Index Options and Stock Options Segment, respectively, whereas, Net Selling of Rs. 37.85 Crore and of Rs. 330.09 Crore was witnessed in Index Futures and Stock Futures Segment, respectively.
NIFTY MAY FUTURE ended in a Discount of 10.30 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
GAIL: Can dip to the levels of 444/442, if breaches the level of 452.
ONGC: Can dip to the levels of 289/287.
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