Nifty Outlook for 14th July 2011

Yesterday, NIFTY made a Small White Candlestick Pattern, after three day losing streak; it may be named as a day of Excellent Short Covering. NIFTY covered almost more than half of the losses it made a day before. NIFTY registered a positive opening of almost 15-20 points and commenced a northward journey, which saw many crest and troughs. NIFTY moved till the level of 5565-5570 in the morning session and traded extremely flat before the opening of the European Markets. After the opening of European Markets too (opened extremely flat) not much movement was witnessed in the market. However, the breadth of the market remained positive. Sectors like PHARMA, REALTY & INFRA, SUGAR and AUTO were the biggest movers of the day. In the last hour of trade NIFTY began to show a sharp upside which led it to the day’s high of 5596.15. Hence, for the day, NIFTY ended on the positive note at 5585.45.

Technically, NIFTY has completed the southward movement of Fibonnaci Retracement drawn from the High of 6338.50 (08^th November, 2010) to the Low of 5177.70 (11^th February, 2011). NIFTY has also completed another longer Extension Level drawn from the Low of 4786.45 (25^th May, 2010) to the High of 6335.90 (08^th November, 2010). After making a low of 5195.90 on 20^th June, 2011, NIFTY again reverted and entered the Extension marked on the chart. Yesterday, NIFTY traded below the level of 50.00% (5620.13) of the Extention drawn by making a high of 5740.40 and closed above the 38.20% Level (5561.17) of the Retracement drawn from the high of 6335.90. Right now, the 50-Days SMA of 5501.50 is acting as a Short Term Support for NIFTY on the closing Basis. A Negative Crossover between 200-Days SMA (Simple Moving Average) and 50-Days SMA is still intact, but at the same time both the 20-Days EMA (Exponential Moving Average) and 20-Days have given a positive crossover, which signals a positive move for some of the trading sessions ahead. Now, the 200-Days SMA of 5750 is playing a role of a stiff resistance level for NIFTY on the closing basis, whereas the level of 5170 proved to be a Good Support.

On the Economic Front, EUROPEAN MONETARY UNION will be coming out with its ECB (European Central Bank) Monthly Report and Consumer Price Index for the month of June. Producer Price Index, Retail Sales and Producer Price Index for the month of June, Continuing Jobless Claims, Initial Jobless Claims and Business Inventories for the month of May will be announced in US. Monthly Inflation Data for the month of June will be announced in INDIA.

Traders are suggested to trade cautiously by following Strict Stop Losses and Booking Fast Profits, whereas, Investors are suggested to focus on Bottom Fishing and invest in the markets for short term only, as markets are still prone to Uncertain Scenario both at the International and National Levels.

Q1 FY11 Results Season is running all over the Financial World. Hence, here is a quick look at some important results to be announced domestically and internationally. BAJAJ-AUTO, BAJAJHLDNG, DCB, HTMEDIA, SOUTHBANK and TCS will be announcing their Q1 FY11 Results tomorrow in INDIA. JP Morgan Chase & Co will be announcing their results tomorrow in US.

NIFTY is again trading above its 20-Days EMA and 50-Days SMA of 5562.76 and 5501.50, respectively, but at the same time is still below its 200-Days SMA of 5735.50.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 52.74 and 55.97, respectively, showing a short term negative crossover.

2. MACD (26 Days & 12 Days): Their Values are 108.82 and 57.59, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 27.23, -DI: 25.61, ADX: 19.73: The Positive Directional Index has gained strength over the Negative Directional Index and also the Average Directional Index is below 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 5735.50, 5501.50 and 5562.76.

Some Trading Stats of the Wednesday’s (13^th July, 2011) Trading Session:

Net Buying of Rs. 315.95 Crore in Cash and of Rs. 269.16 Crore in F&O Segment by FIIs was witnessed on Wednesday’s Trading Session.

Net Selling of Rs. 349.97 Crore and of Rs. 918.93 Crore was witnessed in Mutual Funds and Proprietory Trades, respectively, whereas, Net Buying of Rs. 996.56 Crore was witnessed in Others Segment.

In F&O Segment Net Selling of Rs. 84.62 Crore and of Rs. 21.19 Crore was witnessed in Index Options and Stock Options, respectively, whereas, Net Buying of Rs. 357.18 Crore and of Rs. 17.80 Crore was witnessed in Index Futures and Stock Futures, respectively.

NIFTY JULY FUTURE ended at a Premium of 14.30 Points to NIFTY Spot.

A view on some of the NIFTY 50 Stocks for TOMORROW:

BHARTIARTL:    Can touch the levels of 405/408, if breaches the level of 396.

ONGC:              Can touch the levels of 291/293, if breaches the level of 287.

SESAGOA:        Can touch the levels of 293/295, if breaches the level of 287.

For the day, intraday resistance for NIFTY comes at 5620 / 5650 / 5680 levels. At the same time, 5550 / 5520 / 5480 will act as major intraday support levels.