Yesterday, NIFTY made a Small Black Candlestick and breached its crucial support of 5420 in Intraday Trading by making a low of 5401.25. It was a second straight session of Panic selling, as NIFTY is very easily breaching its Crucial Support Levels. NIFTY had a flat opening of almost 8-10 points in the positive zone at 5448.20. NIFTY hovered around the level of 5450 for long and then moved ahead, but could not cross it’s another resistance of 5520. NIFTY’s effort of crossing the resistance failed and it slipped back in red, led mainly by OIL & GAS, AUTO, REALTY & INFRA Sector Stocks and made a low of 5401.25. But on a cautious note, NIFTY didn’t breach the level of 5400, which could have invited more Panic Selling. Again in the last half an hour of trade, NIFTY reverted sharply and swiftly from its low and made a high of 5460.50, which was particularly by short covering. For the day, NIFTY managed to close marginally above its crucial support of 5420 at 5420.60.
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 5401.25, and also closed below it at 5420.60. 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 Industrial Production and Capacity Utilization for the month of March. Retail Sales for the month of April and CBI Industrial Trends Survey – Orders for the month of May will be announced in UK. US will be coming Continuing Jobless Claims, Initial Jobless Claims, Philadelphia Fed Manufacturing Survey for the month of May, Leading Indicators and Existing Home Sales 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. ASHOKLEY, JETAIRWAYS, LT, PIDILITEIND, SELMCL, TATAPOWER, VOLTAS, WWIL and WOCKHARDT will be announcing their Q4 FY11 Results tomorrow in INDIA. AIR France-KLM will be coming out with its Q4 FY10-11 Results in FRANCE.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5591.04, 5755.66 and 5644.27, 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 35.24 and 39.11, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -161.37 and -114.44, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 12.84, -DI: 28.89, ADX: 27.61: 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 5755.66, 5644.27 and 5585.35.
Some Trading Stats of the Wednesday’s (18th May, 2011) Trading Session:
Net Selling of Rs. 379.440 Crore in Cash whereas Net Buying of Rs. 465.83 Crore in F&O Segment by FIIs was witnessed on Wednesday’s Trading Session.
Net Selling of Rs. 1243.33 Crore was witnessed in Proprietory Trades, whereas, Net Buying of Rs. 28.56 Crore and of Rs. 1210.64 Crore was witnessed in Mutual Funds and Others Segment, respectively.
In F&O Segment Net buying of Rs. 111.49 Crore, of Rs, 273.58 Crore, of Rs. 44.95 Crore and of Rs. 35.82 Crore was witnessed in Index Futures, Index Options Stock Futures and Stock Options Segment, respectively.
NIFTY MAY FUTURE ended in a Premium of 4.55 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
BAJAJ-AUTO: Can dip to the levels of 1260/1250, if breaches the level of 1285.
JPASSOCIAT: Can dip to the levels of 79.50/79.00, if breaches the level of 81.
RCOM: Can dip to the levels of 84, if breaches the level of 86.
RELIANCE: Can dip to the levels of 884/880, if breaches the level of 902.
RELINFRA: Can dip to the levels of 535/530, if breaches the level of 558.
RPOWER: Can dip to the levels of 108/107, if breaches the level of 110.
TATAMOTORS: Can dip to the levels of 1130/1120, if breaches the level of 1150.
HDFC: Can move 655/660, if crosses the level of 645.
HINDALCO: Can move 200/201, if crosses the level of 197.
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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