Nifty Outlook for 25th July 2011

On Friday, NIFTY made a Long White Candlestick Pattern, signaling that the market advanced significantly from open to close during the day under strong buying pressure and buyers were aggressive. NIFTY witnessed a positive opening with almost 30-35 points upside, due to approval of USD 157 billion bailout package for Greece by European Union and due to reports on US debt as White House and Republicans are close to striking a deal. Markets kept on moving with the Green Wave as all the Global markets were also trading in Green. For the day, NIFTY made a high of 5642.20, aided mainly by IT, BANKING, AUTO and TELECOM Sector Stocks. For the day, NIFTY ended very close to its high at 5633.95 and above the crucial level of 5600.

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. On Friday, NIFTY crossed the level of 50.00% (5620.13) of the Extension drawn at 5554.60 and made a high of 5642.20, even crossing the 38.20% Level (5561.17) of the Retracement drawn from the high of 6335.90 and closed well above it at 5633.95 for the day. NIFTY opened above the 20-Days EMA of 5574.90 and maintained well above it throughout the trading session till the closure. Currently, the 50-Days SMA of 5509.59 is acting as a Short Term Support for NIFTY on the closing Basis, as if it breaches NIFTY may again take a dip to the levels of 5480. 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 5720 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 for the long term.

On the Economic Front, JAPAN will be coming out with its Corporate Service Price for the month of June. BBA Mortgage Approvals for the month of June 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 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. BANKINDIA, MAHABANK, EDELWEISSCAP, GEOMETRIC, HCLTECH, JYOTISTRUC, MASTEK, NOVARTIS, NTPC, ORIENTBANK, PATNI, RELIANCE, STER and ZEENEWS will be announcing their Q1 FY11 Results tomorrow in INDIA. Reckitt Benckiser Group Plc will be announcing its results tomorrow in UK.

NIFTY is again trading above its 20-Days EMA and 50-Days SMA of 5574.90 and 5509.59, respectively, but at the same time is still below its 200-Days SMA of 5717.59.

What does Indicators Say?

1. RSI (14 Days & 9 Days): The values are 55.85 and 53.12, respectively, showing a short term negative crossover.

2. MACD (26 Days & 12 Days): Their Values are 61.56 and 75.96, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 29.37, -DI: 18.12, ADX: 18.03: 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 5717.59, 5509.59 and 5574.90.

Some Trading Stats of the Friday’s (22^nd July, 2011) Trading Session:

Net Buying of Rs. 444.91 Crore in Cash and of Rs. 2496.54 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.

Net Buying of Rs. 40.23 Crore and of Rs. 1250.97 Crore was witnessed in Mutual Funds and Others Trade, respectively, whereas, Net Selling of Rs. 926.62 Crore was witnessed in Proprietory Trades.

In F&O Segment Net Buying of Rs. 641.41 Crore, of Rs. 1762.53 Crore and of Rs. 96.98 Crore was witnessed in Index Futures, Index Options and Stock Futures, respectively, whereas, Net Selling of Rs. 4.39 Crore was witnessed in Stock Options.

NIFTY JULY FUTURE ended at a Premium of 11.60 Points to NIFTY Spot.

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

ACC:                Can touch the levels of 1010/1020, if crosses the level of 995.

AMBUJACEM:    Can touch the levels of 136/137, if crosses the level of 130.

AXISBANK:        Can touch the levels of 1325/1335, if crosses the level of 1300.

BHARTIARTL:    Can touch the levels of 426/428, if crosses the level of 418.

GRASIM:            Can touch the levels of 2245/2255, if crosses the level of 2225.

HDFC:              Can touch the levels of 720/722, if crosses the level of 710.

INFY:                Can touch the levels of 2870/2880, if crosses the level of 2830.

LT:                  Can touch the levels of 1855/1865, if crosses the level of 1830.

M&M:               Can touch the levels of 735/738, if crosses the level of 726.

HINDALCO:       Can dip to the levels of 173/171, if breaches the level of 176.

Pre-Market Calls:

DCHL: Buy only if it trades above 70.50 with the SL of 69.40 for the TGTs 72/73.30.

ENGINERSIN: Buy only if it trades above 290 with the SL of 286 for the TGTs  of 296/298.

GESHIP: Buy only if it trades above 282 with the SL of 278 for the TGTs  of 288/230.

For the day, intraday resistance for NIFTY comes at 5650 / 5690 / 5720 levels. At the same time, 5600 / 5575 / 5530 will act as major intraday support levels. 


For the Week, resistance lies at 5700 & 5760 levels, whereas, 5480 & 5400 will be acting as major support levels.