Yesterday, NIFTY made a Small Black Candlestick and breached crucial support of 5450 on Closing Basis. NIFTY had a flat opening of almost 8-10 points in the positive zone at 5496.10. Immediately after opening NIFTY turned into green and made an intraday high of 5523.85. But due to selling pressure in OIL & GAS Sector (increased Subsidy Burden), NIFTY was not able to cross its resistance of 5525-5530 and hence, could not sustain. ONGC, GAIL, RELIANCE were the laggards since the morning hour of trade and were also dragging NIFTY down. But slowly-slowly this selling pressure tightened its grip and dragged REALTY & INFRA, METAL and AUTO Sectors too, OIL & GAS Sector Stocks almost melted (down by 2-6%). Market was eagerly waiting for the BIG BOY’s (SBIN) Q4 FY11 Numbers, finally, SBIN came out with its dismal numbers and dragged BANKING & FINANCE Sector Stocks along with NIFTY. State Bank of India’s profits plunged 99% to ` 20.88 cr versus ` 1,866.6 cr (YoY), the lowest in at least 10 years as provisions climbed, although the bank’s net interest income increased by 20% at ` 8,058 cr. The bank’s shares dropped 8.08%, the most in almost six months, to Rs 2,405.60. The key indices kept hitting one intraday low after another post announcement of SBI results. NIFTY made an intraday low of 5421.05 for the day breaching its important support of 5450, which it was maintaining since last eight trading sessions. For the day, NIFTY closed near to the day’s low at 5438.95.
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). Since, last nine trading sessions NIFTY was facing resistance placed at 50.00% Retracement level (5620) and the support at the 63.80% Retracement level of 5450 by making a low of 5443.65. Yesterday, NIFTY breached this level of 63.80% and made an intraday low of 5421.05, but also closed below it at 5438.95. NIFTY has also successfully 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. Earlier, a Negative Crossover was witnessed between 200-Days SMA and 20-Days EMA. The Negative Crossover of 20-Days EMA (Exponential Moving Average) and the 50-Days SMA (Simple Moving Average) will now lead to more southward movement in NIFTY. This time selling pressure is more witnessed due to Uncertain Economic Conditions both Internationally and Domestically, Continuous Net Outflow from the FIIs and deep correction in the stocks prices in a minimal time. Now, the level of 5350 is acting as a Strong Support on the Closing Basis for NIFTY, whereas the level of 5600 is acting as a crucial Resistance on the Closing Basis.
On the Economic Front, JAPAN will be coming out with its Q1 Gross Domestic Product. HSBC Manufacturing PMI for the month of May will be announced in CHINA. UK will be coming out with its Claimant Count Rate and Claimant Count Change for the month of April, Average Earnings and ILO Unemployment Rate for the month of March and also with Nationwide Consumer Confidence for the month of April. Construction Output for the month of March will be announced by EUROPEAN MONETARY UNION. US will be coming out with its MBA Mortgage Applications.
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. BAJAJAUTO, BAJAJHLDNG, D B CORP and ORCHIDCHEM will be announcing their Q4 FY11 Results tomorrow in INDIA. Hewlett Packard Inc. will be coming out with its Q2 FY12 Results in US.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5602.58, 5755.40 and 5646.63, 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.
As stated earlier, that if this time NIFTY did not take the support of 5450 and reverted, it may test the previous lows of 5370 and 5180 too, Traders and Investors should keep this in mind while aggressively dealing with the Markets. Markets are also moving on Events and Sentiments at this time.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 36.22 and 40.07, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -155.87 and -102.71, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 13.47, -DI: 28.67, ADX: 26.78: 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 5755.40, 5646.63 and 5602.58.
Some Trading Stats of the Tuesday’s (17th May, 2011) Trading Session:
Net Selling of Rs. 487.20 Crore in Cash whereas Net Buying of Rs. 4.13 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.
Net Selling of Rs. 7.69 Crore and of Rs. 910.87 Crore was witnessed in Mutual Funds and Proprietory Trades, respectively, whereas, Net Buying of Rs. 676.74 Crore was witnessed in Others Segment.
In F&O Segment Net buying of Rs. 522.05 Crore was witnessed in Stock Futures Segment, whereas, Net Selling of Rs. 421.92 Crore, of Rs. 44.56 Crore and of Rs. 51.44 Crore was witnessed in Index Futures, Index Options and Stock Options Segment, respectively.
NIFTY MAY FUTURE ended in a Premium of 8.45 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
AXISBANK: Can dip to the levels of 1200/1195, if breaches the level of 1220.
GAIL: Can dip to the levels of 426/424.
HDFC: Can dip to the levels of 615/610, if breaches the level of 625.
ICICIBANK: Can dip to the levels of 1020/1010, if breaches the level of 1035.
IDFC: Can dip to the levels of 124/123, if breaches the level of 127.
JPASSOCIAT: Can dip to the levels of 8.75/80, if breaches the level of 82.75.
LT: Can dip to the levels of 1485/1475, if breaches the level of 1500.
ONGC: Can dip to the levels of 272/270.
RELIANCE: Can dip to the levels of 910, if breaches the level of 920.
SAIL: Can dip to the levels of 140.
SBIN: Can dip to the levels of 2375/2360, if breaches the level of 2395.
BHEL: Can move 2085/2095, if crosses the level of 2060-2065.
For the day, intraday resistance for NIFTY comes at 5450 / 5480 / 5520 levels. At the same time, 5400 / 5375 / 5350 will act as major intraday support levels.
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