Yesterday, NIFTY made a Long White Candlestick Pattern, showing the strength among the Bulls in the market. NIFTY had a positive opening with almost 20-25 points in Green. Immediately after opening, NIFTY started stretching northwards and traded well in Green till the announcement of Q4 FY11 GDP (Gross Domestic Product). For the quarter ended March 31, 2011, the gross domestic product (GDP) stood at 7.8% vs 8.2%, QoQ, while FY11 GDP came in at 8.5% vs 8%. Immediately after the announcement of Data, NIFTY witnessed a sudden dip to the day’s low of 5489.70 and a gain a swift upside movement was witnessed from the low point of the day. NIFTY gained almost 70-80 points from day’s low. For the day, NIFTY made a robust move to the level of 5571.60 coupled with the robust opening of European Markets. FMCG, BANKING & FINANCE and REALTY & INFRA kept the Greenery in the Market. For the day, NIFTY had a robust end at 5560.15.
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 another longer Extension Level drawn from the Low of 4786.45 (25th May, 2010) to the High of 6335.90 (08th November, 2010). 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. Yesterday, NIFTY crossed its 20-Days EMA of 5504.64 on the Closing Basis. Hence, now the level of 5650 is acting as a Short Term Resistance for NIFTY, whereas the level of 5320 proved to be a Good Support. A technical bounce till the level of 5650 is expected in NIFTY, which will be supported by BANKING & FINANCE and REALTY & INFRA Sector Stocks.
On the Economic Front, JAPAN will be coming out with its Q1 Capital Spending and Monetary Base for the year. HSBC Manufacturing PMI for the month of May will be announced in CHINA. GERMANY will be coming out with its Purchasing Manager Index Manufacturing for the month of May. Purchasing Manager Index Manufacturing for the month of May will be announced by EUROPEAN MONETARY UNION. Net Lending to Individuals, Mortgage Approvals and M4 Money Supply for the month of April and Purchasing Manager Index Manufacturing for the month of May will be announced in UK. US will be coming out with its MBA Mortgage Applications, ADP Employment Change, ISM Prices Paid, ISM Manufacturing and Total Vehicle Sales for the month of May and also with Construction Spending 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.
NIFTY moved much above its 20-Days EMA of 5504.64 yesterday, but it is still trading below its 200-Days SMA and 50-Days SMA of 5755.45 and 5635.72, respectively. MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) are signaling a short term northward move in the markets, due to the positive crossovers.
What does Indicators Say?
1. RSI (14 Days & 9 Days): The values are 52.39 and 43.01, respectively, showing a short term positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -97.23 and -120.40, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 24.94, -DI: 22.42, ADX: 24.48: 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 5755.45, 5635.72 and 5504.64.
Some Trading Stats of the Tuesday’s (31st May, 2011) Trading Session:
Net Buying of Rs. 1310.98 Crore in Cash and of Rs. 2264.38 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.
Net Selling of Rs. 332.11 Crore was witnessed in Proprietory Trades, whereas, Net Buying of Rs. 9.87 Crore and of Rs. 777.90 Crore was witnessed in Mutual Funds and Others Segment.
In F&O Segment Net Selling of Rs. 32.08 Crore in Stock Options, whereas, Net Buying of Rs. 1121.68 Crore, of Rs. 776.73 Crore and of Rs. 398.04 Crore was witnessed in Index Futures, Index Options and Stock Futures Segment, respectively.
NIFTY JUN FUTURE ended at a Discount of 5.25 Points to NIFTY Spot.
A view on some of the NIFTY 50 Stocks for TOMORROW:
ACC: Can move to the levels of 1050/1060, if crosses the level of 1030.
AXISBANK: Can move to the levels of 1310/1325, if crosses the level of 1285.
DLF: Can move to the levels of 245/248, if crosses the level of 240.
DRREDDY: Can move to the levels of 1640/1650, if crosses the level of 1620.
HCLTECH: Can move to the levels of 525/527, if crosses the level of 515.
JPASSOCIAT: Can move to the levels of 89/90.
MARUTI: Can move to the levels of 1245/1255, if crosses the level of 1230.
NTPC: Can move to the levels of 170/171, if crosses the level of 168.
RCOM: Can move to the levels of 94.50/95, if crosses the level of 90.
SBIN: Can move to the levels of 2340/2350, if crosses the level of 2320.
STER: Can move to the levels of 174.
BANKBARODA: Buy at the levels of 865-866 with the SL of 855 for the TGTs
of 882/885.
TATACHEM: Buy only if it trades above 382 with the SL of 377 for the TGTs
of 390/392.
RAYMOND: Buy at the levels of 360-361 with the SL of 356 for the TGTs
of 368/372
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