On Friday, NIFTY made a Black Candlestick Pattern, with a longer lower shadow. NIFTY had a very flat opening with only 3-5 points with the negative bias. Market was also eagerly waiting for the Index of Industrial Production (IIP) for the month of April. Till the announcement of Data markets were trading very flat and with high volatility. Weak IIP numbers for the month of April at 6.3% versus 7.3% in March (new series) was one of the triggers, which led the market in Red territory immediately after the announcement. It was becoming difficult for NIFTY to maintain at the level of 5500. Selling was witnessed with high volume, which was almost absent till the announcement of data. NIFTY found its important support at 5450 levels and made a low of 5457.45. In the last half an hour of trading session, markets bounced back due to intraday short covering due to which NIFTY ended at 5485.80.
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, 20-Days EMA played the role of a good resistance level and NIFTY could only make an intraday high of 5521.45, and ended much below it at 5485.80. Now the level of 5635 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.
On the Economic Front, JAPAN will be coming out with its Q2 BSI Large Manufacturing. RICS House Price Balance 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 closed below its 20-Days EMA of 5518.59, and is also still trading below its 200-Days SMA and 50-Days SMA of 5757.44 and 5636.69, 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 45.61 and 48.01, respectively, showing a short term positive crossover.
2. MACD (26 Days & 12 Days): Their Values are 22.83 and -25.63, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 22.07, -DI: 24.28, ADX: 16.36: 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.
4. SMA (200 Days), SMA (50 Days) & EMA (20 Days): The values of these indicators are 5757.44, 5636.69 and 5518.59.
Some Trading Stats of the Friday’s (10th June, 2011) Trading Session:
Net Selling of Rs. 170.05 Crore in Cash, and of Rs. 54.07 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.
Net Selling of Rs. 923.83 Crore was witnessed in Proprietory Trades, whereas, Net Buying of Rs. 55.15 Crore and of Rs. 922.74 Crore was witnessed in Mutual Funds and Others Segment, respectively.
In F&O Segment Net Selling of Rs. 374.71 Crore, of Rs. 47.45 Crore and of Rs. 4.00 Crore was witnessed in Index Futures, Index Options and Stock Options, respectively, whereas, Net Buying of Rs. 5.68 Crore was witnessed in Stock Futures.
NIFTY JUN FUTURE ended at a Discount of 1.65 Points to NIFTY Spot.
A view on some of the NIFTY 50 Stocks for TOMORROW:
ACC: Can dip to the levels of 988/982, if breaches the level of 1000.
AMBUJACEM: Can dip to the levels of 133/132, if breaches the level of 135.
BAJAJ-AUTO: Can dip to the levels of 1300/1290, if breaches the level of 1320.
GRASIM: Can dip to the levels of 2200/2190, if breaches the level of 2230.
For the day, intraday resistance for NIFTY comes at 5500 / 5530 / 5560 levels. At the same time, 5450 / 5420 / 5375 will act as major intraday support levels.
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