Yesterday, NIFTY made a Small White Candlestick Pattern, with a longer lower shadow. NIFTY opened in the Red Territory with almost 10-15 points of downside and traded range bound for a while, flirting with the levels of 5500. Till one hour of trading NIFTY traded in the range of 5500-5490, but with a negative bias. Selling pressure increased a bit when NIFTY breached the levels of 5490 and for the day made a low of 5479.85. But it reverted from the day’s low, without breaching the other support level of 5475 and moved up in the Green, making a high of 5542.65 for the day. CONSUMER DURABLES, PHARMA and CAPITAL GOODS Sectors were the sectors which remained in Green, whereas, METAL, AUTO and IT Sectors were the top losers for the day. For the day, NIFTY closed at 5532.05, near to the day’s high.
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, JAPAN will be coming out with its Coincident Index, Leading Economic Index for the month of April, Current Account and Trade Balance – BOP Basis for the month of April and Money Supply M2+CD for the month of May. Retail Sales for the month of April will be announced by EUROPEAN MONETARY UNION. GERMANY will be coming out with its Factory Orders for the month of April. BRC Shop Price Index for the month of May will be announced in UK. US will be coming out with its IBD/TIPP Economic Optimism for the month of June and Consumer Credit Change 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 5518.02, but it is still trading below its 200-Days SMA and 50-Days SMA of 5757.59 and 5646.90, 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 49.86 and 47.52, respectively, showing a short term positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -23.28 and -76.00, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 24.38, -DI: 22.87, ADX: 19.72: The Positivee Directional Index has gained strength over the Negative Directional Index and also the Average Directional Index is above 20, indicating that the market is in the trading range right now.
Some Trading Stats of the Monday’s (06th June, 2011) Trading Session:
Net Selling of Rs. 201.78 Crore in Cash, while Net Buying of Rs. 16.43 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.
Net Selling of Rs. 20.29 Crore, of Rs. 211.93 Crore and of Rs. 252.45 Crore was witnessed in Mutual Funds, Proprietory Trades and Others Segment, respectively.
In F&O Segment Net Selling of Rs. 197.50 Crore and of Rs. 253.28 Crore in Index Futures and Stock Futures, respectively, whereas, Net Buying of Rs. 455.42 Crore and of Rs. 11.79 Crore was witnessed in Index Options and Stock Options, respectively.
NIFTY JUN FUTURE ended at a Premium of 2.15 Points to NIFTY Spot.
A view on some of the NIFTY 50 Stocks for TOMORROW:
BPCL: Can dip to the levels of 598/595, if breaches the level of 610.
HINDALCO: Can dip to the levels of 180, if breaches the level of 184.
For the day, intraday resistance for NIFTY comes at 5550 / 5580 / 5620 levels. At the same time, 5500 / 5465 / 5430 will act as major intraday support levels.
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