Nifty Outlook for 20th July 2011

Yesterday, NIFTY made a Small White Candlestick Pattern. NIFTY is trading in a very small range of just 60 points, that too with high volatility since last four trading sessions. Hence, still a proper direction lead is not clear for it, although market is moving in full synchronization with the International Markets. NIFTY witnessed a much muted opening almost 2-3 points in green. However, within seconds of the opening bell, the equities slipped into red. Since then it kept swinging on the either side of equator till mid noon session, and registered intraday lows. NIFTY made a low of 5557.20 for the day. Nevertheless, buying interest in most of the frontline counters kept pushing the gauges northwards till they registered the intraday highs. NIFTY zoomed to end in the green in last hour of trading and made a high of 5627.65 for the day, as the European Markets picked up very well after their opening. CONSUMER DURABLES, BANKING, REALTY & INFRA and IT Sectors pushed up the market in green. For the day, NIFTY ended on the positive note at 5613.55.

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 crossed the level of 50.00% (5620.13) of the Extension drawn by making a high of 5627.65 in intraday trading, but it closed below it at 5613.55, i.e. above the 38.20% Level (5561.17) of the Retracement drawn from the high of 6335.90. Right now, the 50-Days SMA of 5506.66 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, JAPAN will be coming out with its Coincident Index and Leading Economic Index for the month of May and Merchandise Trade Balance for the month of June. Producer Price Index for the month of June will be announced in GERMANY. EUROPEAN MONETARY UNION will be coming out with its Consumer Confidence for the month of July. Nationwide Consumer Confidence for the month of June will be announced in UK. US will be coming out with its MBA Mortgage Applications, Existing Home Sales and Existing Home Sales Change for the month of June.

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. BHARTISHIP, CRISIL, DISHTV, DRREDDY, EXIDEIND, INGERSOLLRAND, IRB, LICHSGFIN, MINDTREE, NATNLSTEEL, PETRONET, POLARIS, RCF, RIIL, SELAN and WIPRO will be announcing their Q1 FY11 Results tomorrow in INDIA. Intel Corp, eBay Inc and American Express Co will be announcing their results tomorrow in US.

NIFTY is again trading above its 20-Days EMA and 50-Days SMA of 5572.01 and 5506.66, respectively, but at the same time is still below its 200-Days SMA of 5726.33.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 54.76 and 54.21, respectively, showing a short term negative crossover.

2. MACD (26 Days & 12 Days): Their Values are 90.64 and 82.18, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 27.78, -DI: 20.97, ADX: 17.92: 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 5726.33, 5506.66 and 5572.01.

Some Trading Stats of the Tuesday’s (19^th July, 2011) Trading Session:

Net Buying of Rs. 293.29 Crore in Cash while, Net Selling of Rs. 1238.26 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.

Net Selling of Rs. 204.90 Crore, of Rs. 896.89 Crore was witnessed in Mutual Funds and Proprietory Trades, respectively, whereas, Net Buying of Rs. 1252.55 Crore was witnessed in Others Segment.

In F&O Segment Net Selling of Rs. 874.41 Crore, of Rs. 331.99 Crore, of Rs. 19.00 Crore and of Rs. 12.87 Crore was witnessed in Index Futures, Index Options, Stock Futures and Stock Options, respectively.

NIFTY JULY FUTURE ended at a Premium of 10.75 Points to NIFTY Spot.

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

BHARTIARTL:    Can touch the levels of 404/406, if crosses the level of 400.

DLF:                 Can touch the levels of 244/246, if crosses the level of 240.

IDFC:                Can touch the levels of 146/148, if crosses the level of 143.

RELIANCE:        Can touch the levels of 887/890.

TATAMOTORS:  Can dip to the levels of 975/968, if breaches the level of 985.

For the day, intraday resistance for NIFTY comes at 5630 / 5660 / 5690 levels. At the same time, 5590 / 5550 / 5520 will act as major intraday support levels.