On Friday, NIFTY made a Bearish Shooting Star Candlestick Pattern. NIFTY opened in the Green Territory with almost 20-25 points upside, and immediately within fifteen minutes of trading NIFTY touched its intraday high of 5604.95 (almost 40 points in the upside). Technically, NIFTY fulfilled the Gap made a day before with the Gap Down Opening. The rally was supported by almost all the NIFTY 50 Stocks, especially by LT, RELIANCE and ADAG Group Stocks. It was RELIANCE INDUSTRIES’ 37th AGM (Annual General Meeting), which was being eagerly awaited by the Street. The company’s chairman announce plans to expand in retail, broadband wireless and steel. However, these annunciations failed to prevent traders to sell the stock at the drop of a hat. Even Mukesh Ambani’s comments that Reliance will be a zero debt company by the year end, failed to draw any interest towards the stock. After the completion of AGM, market slipped swiftly into RED, breaching all the important intraday support levels. Markets were primarily dragged by RELIANCE, BANKING & FINANCE Stocks, AUTO Stocks, OIL & GAS Stocks and METAL Stocks. Technically, it may be said, that became difficult for NIFTY to sustain above 5600 levels, supply pressure increased at that level and NIFTY made a low of 5507.20 for the day (almost 100 points down from the day’s high). A bit of intraday covering was witnessed in last fifteen minutes of trading, due to which NIFTY ended the session and the week at 5516.75.
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. On Friday, again 20-Days EMA played the role of a good support level and NIFTY closed just above the level, however breached it in intraday trading. 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, EUROPEAN MONETARY UNION will be coming out with its Sentix Investor Confidence for the month of June and Producer Price Index for the month of April. BRC Retail Sales Monitor for the month of May will be announced in UK.
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 5516.54 yesterday, but it is still trading below its 200-Days SMA and 50-Days SMA of 5757.32 and 5645.86, 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 48.59 and 46.93, respectively, showing a short term positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -40.31 and -89.18, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 25.86, -DI: 21.61, ADX: 20.99: 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 Friday’s (03rd June, 2011) Trading Session:
Net Buying of Rs. 445.26 Crore in Cash, while Net Buying of Rs. 484.67 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.
Net Selling of Rs. 124.21 Crore, of Rs. 873.07 Crore and of Rs. 366.80 Crore was witnessed in Mutual Funds, Proprietory Trades and Others Segment, respectively.
In F&O Segment Net Selling of Rs. 491.47 Crore and of Rs. 22.11 Crore in Stock Futures and Stock Options, respectively, whereas, Net Buying of Rs. 33.43 Crore and of Rs. 964.83 Crore was witnessed in Index Futures and Index Options, respectively.
NIFTY JUN FUTURE ended at a Premium of 6.75 Points to NIFTY Spot.
A view on some of the NIFTY 50 Stocks for TOMORROW:
LT: Can move to the levels of 1755/1770, if crosses the level of 1725.
AXISBANK: Can dip to the levels of 1225/1210, if breaches the level of 1240.
BHEL: Can dip to the levels of 1885/1870, if breaches the level of 1910.
DRREDDY: Can dip to the levels of 1555/1545, if breaches the level of 1575.
HDFC: Can dip to the levels of 650/645, if breaches the level of 660.
HINDALCO: Can dip to the levels of 185/184, if breaches the level of 189.
RELIANCE: Can dip to the levels of 920/915.
TATAMOTORS: Can dip to the levels of 1000/995, if breaches the level of 1025.
ENGINEERS: Buy only if it trades above 275 with the SL of 271 for the TGTs 280/285.
GITANJALI: Buy only if it trades above 292 with the SL of 288 for the TGTs of 298/302.
For the week, resistance for NIFTY comes at 5650 & 5750 levels. At the same time, 5420 & 5320 will act as major support levels.
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