Yesterday, NIFTY made a Small White Candlestick Pattern. NIFTY had a Gap Down opening of almost 60-65 points on the back of disappointing U.S. economic data and weak Asian markets. NIFTY made a low of 5521.95 immediately after opening but did not breached its important Support of 5520. BANKING & FINANCE, METAL & MINING, REALTY & INFRA, and others or say almost all the sectors all across the board witnessed a Gap Down Opening. However, after testing Day’s low markets recovered a bit, but it took almost whole trading session to rebound completely. After the announcement of Weekly inflation numbers for the week ended May 21, which were, primary articles inflation stood at 10.87% versus 11.6% (WoW), while food articles inflation came in at 8.06% versus 8.55% (WoW). Fuel group inflation was the only dampener, as it rose to 12.54% versus 12.11% (WoW). Boosted by favorable inflation numbers, the key indices touched their intraday highs and NIFTY made a high of 5568.20 for the day, aided by AUTO and FMCG Sector. NIFTY ended the session near to the day’s high at 5550.35.
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, where the 50-Days SMA lies too, 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, GERMANY will be coming out with its Purchasing Manger Index Services for the month of May. Purchasing Manager Index Services for the month of May will be announced by EUROPEAN MONETARY UNION. UK will also be coming out with its Purchasing Manger Index Services for the month of May. Average Weekly Hours, Unemployment Rate, Average Hourly Earnings, Nonfarm Payrolls and ISM Non-Manufacturing 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.
NIFTY moved much above its 20-Days EMA of 5516.52 yesterday, but it is still trading below its 200-Days SMA and 50-Days SMA of 5756.81 and 5643.80, 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 51.23 and 46.52, respectively, showing a short term positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -58.66 and -101.40, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 24.73, -DI: 23.69, ADX: 21.92: The Positivee Directional Index has gained strength over the Negative Directional Index and also the Average Directional Index is above 20, indicating the development of strength in the current trend.
Some Trading Stats of the Thursday’s (02nd June, 2011) Trading Session:
Net Selling of Rs. 14.79 Crore in Cash, while Net Buying of Rs. 1364.08 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.
Net Selling of Rs. 862.37 Crore and of Rs. 747.14 Crore was witnessed in Proprietory Trades and Others Segment, respectively, whereas, Net Buying of Rs. 63.71 Crore was witnessed in Mutual Funds Segment.
In F&O Segment Net Selling of Rs. 327.94 Crore in Stock Futures, whereas, Net Buying of Rs. 135.55 Crore, of Rs. 1534.77 Crore and of Rs. 21.70 Crore was witnessed in Index Futures, Index Options and Stock Options Segment, respectively.
NIFTY JUN FUTURE ended at a Premium of 8.10 Points to NIFTY Spot.
A view on some of the NIFTY 50 Stocks for TOMORROW:
SAIL: Can move to the levels of 153/154, if crosses the level of 150.
For the day, intraday resistance for NIFTY comes at 5580 / 5620 / 5650 levels. At the same time, 5520 / 5480 / 5450 will act as major intraday support levels.
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