Yesterday, NIFTY made a Black Opening Marubozu Candlestick Pattern,
and made the formation of a Bullish
Inverted Hammer Candlestick Pattern the previous day a failure. It happened
as NIFTY is already in a downtrend and such formations usually fail at such
point of time. Markets started in the Green territory by registering an opening
of almost 20 points up side. Immediately after opening, NIFTY marked the
intraday high of 5078.60. Again, NIFTY repeated the same movement, as was
witnessed on Tuesday’s and Wednesday’s trading session. After kissing the day’s
high NIFTY started sliding very swiftly and breached all the important support levels
of 5050, 5000 and 4950 one by one throughout the trading session. NIFTY
registered a low of 4932.15 for the day, down by almost 145 points from the day’s
high. It was a complete free-fall on Dalal Street, spooked
by fears of stammering recovery in the European and US economies
after debt crisis. Market breadth was pathetic; about 6 share slipped in red
for every one share in green. Total traded turnover was more than Rs 1.6 lakh
crore. There were huge cuts in the IT, METAL, BANKING & FINANCE and TEXTILE
Sectors. Even the Index Constituent stocks were brutally sold off, witnessing a
cut of almost 6-7%. For the day, NIFTY closed at 4944.15, even below the level
of 4950.
Technically, NIFTY opened below the
lower trendline marked from the low of 5177.70 (02nd February, 2011)
to the low of 5195.90 (26th June, 2011) at 5125.75. NIFTY is trading
below this lower trendline on closing basis, since last eight trading sessions.
Yesterday it marked the closing of 4944.15, breaching important physiological
support levels of 5050, 5000 and 4950. NIFTY marked a low of 4932.15 for the
day and closed at 4944.15. The 20-Days EMA and 50-Days SMA have again made a Negative
Crossover, hence, indicating more selling pressure to creep in. A Negative
Crossover between 200-Days SMA (Simple Moving Average) and 50-Days SMA is still
intact. Till Yesterday, the level of 5000 was acting as an excellent Support
for NIFTY, but due to massive selling pressure with heavy volumes, NIFTY breached
three important support levels (5050, 5000 and 4950) in a day. Right now, the level
of 5200 is playing a role of a stiff resistance level for NIFTY on the closing
basis, whereas the level of 4900 will be acting as a Good Support Level in the
coming sessions. The so-called level of 4800 will soon be achieved by NIFTY in
the coming period, as there is more Bad News in the offing in terms of
International Economic Uncertainties. A Fibonnaci Retracement Level is being
drawn from the High of 6338.50 (08th November, 2010) to the recent 15-Months
Low marked 4932.15 by NIFTY (09th August, 2011), which represents
the level of 5263.44 (Level of 61.80%) as the first important resistance level
to be crossed on the Closing Basis for the NIFTY to enter in a Comfortable Zone
for traders.
On the Economic Front, JAPAN will be coming out with its All
Industry Activity Index. Producer Price Index for the month of July will be
announced in GERMANY. UK will be
coming out with its Public Sector Net Borrowing for the month of July.
Traders are suggested to trade
cautiously by following Strict Stop Losses and Booking Fast Profits, whereas,
Investors are suggested to stay from the markets right now, as market will give
better chances ahead for Bottom Fishing and earning handsome returns
thereafter.
NIFTY is trading below all its
Moving Averages like 200-Days SMA, 50-Days SMA and 20-Days EMA of 5646.55, 5443.47
and 5253.63, respectively. 14-Days RSI (Relative Strength Index) and 26-Days
MACD (Moving Average Convergence and Divergence) are moving towards their oversold
zone with every sell off in the markets, signaling a pull back at any point of
time in the markets.
What does Indicators Say?
2. MACD (26 Days & 12 Days): Their Values are -216.90 and -147.41, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 8.84, -DI: 38.01, ADX: 34.37: The Negative Directional Index has gained strength over the Positive Directional Index and also the Average Directional Index is above 20, indicates that the market is in the trending range right now.
4. SMA (200 Days), SMA (50 Days) & EMA (20 Days): NIFTY is trading below the levels of of these indicators are 5646.55, 5443.47 and 5253.63.
Some Trading Stats of the Thursday’s (18th August,
2011) Trading Session:
Net Selling of Rs. 488.67 Crore in Cash and of Rs. 560.25 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.
Net Selling of Rs. 655.34 Crore was witnessed in Proprietory
Trades, whereas, Net Buying of Rs. 60.98 Crore and of Rs. 771.30 Crore was witnessed in Mutual Funds and Others Segment.
In F&O Segment Net Selling of Rs. 326.55 Crore and of Rs. 274.81 Crore was witnessed in Index Futures and Index Options, whereas, Net Buying of Rs. 7.42 Crore and of Rs. 33.69 Crore was witnessed in Stock
Futures and Stock Options.
NIFTY AUG FUTURE ended at a Discount of 6.10
Points to the Spot NIFTY.
A view on some of the NIFTY 50 Stocks for TOMORROW:
AXISBANK: Can dip to the levels of 1080/1070, if breaches the level of 1100.
BAJAJ-AUTO: Can dip to the levels of 1425/1415, if breaches the level of 1440.
HCLTECH: Can dip to the levels of 390/388, if breaches the level of 396.
WIPRO: Can dip to the levels of 321/318, if breaches the level of
328.
For the day, intraday resistance for NIFTY comes at 4980 / 5020 / 5050 levels. At the same time, 4920 / 4880 / 4850 will act as major intraday support levels.
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