Yesterday, NIFTY made a Small White Candlestick Pattern. NIFTY had a flat positive opening with almost 8-10 points in Green and soon it was 20-25 points up. Again majority of the Index Constituents opened strong in Green, especially the most beaten down and on the other hand some PHARMA & REALTY Stocks witnessed a Profit Booking. Market was extremely volatile again in a very narrow range. NIFTY from 20 points in the positive territory slipped into negative territory with 20 points and made a low of 5559.45 for the day. Immediately it recovered from the day’s low and kept trading in the range of just 10-15 points. Markets didn’t get any trigger to decide the further direction for whole of the session. In the last hour of trading, a sudden bounce was witnessed in the markets which took NIFTY to the levels of 5597.35. More positive action was witnessed in the Mid Cap and Small Cap stocks throughout the session. TEXTILE, POWER and METAL were the biggest gaining sector for the day. For the day, NIFTY ended strongly at 5592.
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, UK will be coming out with its PMI Construction for the month of May. Q1 Nonfarm Productivity and Unit Labor Costs, Initial Jobless Claims, Continuing Jobless Claims and Initial Jobless Claims and with Factory Orders for the month of April 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 5512.96 yesterday, but it is still trading below its 200-Days SMA and 50-Days SMA of 5756.15 and 5640.09, 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 54.65 and 45.34, respectively, showing a short term positive crossover.
2. MACD (26 Days & 12 Days): Their Values are -78.85 and -112.09, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 26.42, -DI: 21.65, ADX: 23.44: 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 5756.15, 5640.09 and 5512.96.
Some Trading Stats of the Wednesday’s (31st May, 2011) Trading Session:
Net Buying of Rs. 445.22 Crore in Cash and of Rs. 1545.81 Crore in F&O Segment by FIIs was witnessed on Wednesday’s Trading Session.
Net Selling of Rs. 177.68 Crore, of Rs. 138.11 Crore and of Rs. 1948.59 Crore was witnessed in Mutual Funds, Proprietory Trades and Others Segment, respectively.
In F&O Segment Net Selling of Rs. 126.74 Crore in Stock Futures, whereas, Net Buying of Rs. 1290.68 Crore, of Rs. 375.39 Crore and of Rs. 6.48 Crore was witnessed in Index Futures, Index Options and Stock Options Segment, respectively.
NIFTY JUN FUTURE ended at a Discount of 1.55 Points to NIFTY Spot.
A view on some of the NIFTY 50 Stocks for TOMORROW:
BHARTIARTL: Can move to the levels of 388/390, if crosses the level of 382.
LT: Can move to the levels of 1705/1715, if crosses the level of 1625.
MARUTI: Can move to the levels of 1270/1280, if crosses the level of 1250.
NTPC: Can move to the levels of 178/179, if crosses the level of 175.
RCOM: Can move to the levels of 97/98, if crosses the level of 94.50.
RELCAPITAL: Can move to the levels of 535/538, if crosses the level of 525.
SBIN: Can move to the levels of 2380/2390, if crosses the level of 2350/2355.
SUBEX: Buy only if it trades above 67.50 with the SL of 66.50 for the TGTs of 69.20/70.50.
BOMDYEING: Buy only if it trades above 374 with the SL of 368 for the TGTs of 386/390.
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