Yesterday, NIFTY made a Black Opening Marubozu Candlestick Pattern, signaling that it was a day for bears and such a bearish rally should cause concern among the bulls. This Candlestick may be interpreted either as the initial phase of a bearish continuation pattern or it may also signal a bullish reversal depending on the preceding day's candlesticks. NIFTY breached its crucial and physiological support level of 5400 in Intraday Trading by making a low of 5373.00. NIFTY had a Gap Down Opening of almost 25-30 points as Fitch Ratings lowered Greece’s credit rating and Standard & Poor’s said Italy’s rating was at risk, deepening concern over Europe’s sovereign debt crisis. Asian Markets were also bleeding since Indian Market’s opening. A broad based Panic Selling was witnessed all over the Globe. Except ITC, all other NIFTY Constituents were down almost 2%-7% for the day. After witnessing a Gap Down opening, markets traded range bound till first half of trading session, but with a strong Negative Bias. This steep downfall was led by BANKING & FINANCE, REALTY & INFRA, CAPITAL GOODS, AUTO, METAL and POWER. Again not even a Single sector was left from being butchered. NIFTY lost almost 110 points for the day by making a low of 5373.00. More selling pressure crept in after the Opening of European Markets, which melted in Red. For the day, NIFTY managed to close marginally above its crucial support of 5350 at 5386.55.
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 has also completed an another longer Extension Level drawn from the Low of 4786.45 (25th May, 2010) to the High of 6335.90 (08th November, 2010). Yesterday, NIFTY made a low of 5373 breaching the 61.80% level of 5378.79. 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 5500 is acting as a crucial Resistance on the Closing Basis.
On the Economic Front, JAPAN will be coming out with its Merchandise Trade Balance Total for the month of April. Q1 Gross Domestic Product, IFO – Current Assessment, IFO – Expectations and IFO – Business Climate for the month of May will be announced in GERMANY. EUROPEAN MONETARY UNION will be coming out with its Industrial New Orders for the month of March. Public Sector Net Borrowing will be announced in UK. New Home Sales for the month of April and Richmond Fed Manufacturing Index for the month of May 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. APOLLOPHOSP, BHARATFORG, BLUESTAR, BOMDYEING, CHENNPETRO, DLF, GUJARAT INDS, INDHOTEL, IPCALAB, POWERGRID, PRAJIND, RECLTD, TATAGLOBAL and TWL will be announcing their Q4 FY11 Results tomorrow in INDIA. Marks And Spencer Group PLC will be announcing its Results in UK.
NIFTY is trading below its 20-Days EMA, 200-Days SMA and 50-Days SMA of 5545.55, 5755.47 and 5639.99, 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 35.82 and 38.47, respectively, showing a positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -135.52 and -129.71, respectively. a positive crossover is indicated by both the Moving Averages.
3. +DI: 15.29, -DI: 28.30, ADX: 28.01: 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 5755.47, 5639.99 and 5545.55.
Some Trading Stats of the Monday’s (23rd May, 2011) Trading Session:
Net Selling of Rs. 293.56 Crore in Cash and of Rs. 206.66 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.
Net Selling of Rs. 46.74 Crore and of Rs. 1666.93 Crore was witnessed in Mutual Funds and Others Segment, whereas, Net Buying of Rs. 845.44 Crore was witnessed in Proprietory Trades Segment.
In F&O Segment Net buying Rs. 709.19 Crore and of Rs. 24.86 Crore was witnessed in Index Options and Stock Options Segment, respectively, whereas, Net Selling of Rs. 816.46 Crore and of Rs. 119.25 Crore was witnessed in Index Futures and Stock Futures Segment, respectively.
NIFTY MAY FUTURE ended in a Discount of 3.10 points to the Spot NIFTY.
A brief on some of the NIFTY 50 Stocks for TOMORROW:
GAIL: Can move to the levels of 444/446, if crosses the level of 435.
ACC: Can dip to the levels of 955/950.
AXISBANK: Can dip to the levels of 1170/1160.
BAJAJ-AUTO: Can dip to the levels of 1280/1270, if breaches the level of 1300.
BHEL: Can dip to the levels of 1900/1890.
DRREDDY: Can dip to the levels of 1550/1540, if breaches the level of 1570.
HINDALCO: Can dip to the levels of 185/184, if breaches the level of 189-188.
HINDUNILVR: Can dip to the levels of 298/297.
ICICIBANK: Can dip to the levels of 988/985, if breaches the level of 1000.
INFOSYSTCH: Can dip to the levels of 2820/2810, if breaches the level of 2840.
NTPC: Can dip to the levels of 163/162.
SESAGOA: Can dip to the levels of 274/272, if breaches the level of 280.
TATAMOTORS: Can dip to the levels of 1100/1090, if breaches the level of 1120.
For the day, intraday resistance for NIFTY comes at 5400 / 5450 / 5480 levels. At the same time, 5350 / 5300 / 5275 will act as major intraday support levels.
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