On Friday, NIFTY made a Long Black Candlestick Pattern, which dipped
NIFTY to new 52-week Low or say to 18-Months Low. Here the Long Black
Candlestick may signal panic or capitulation if it appears after a long decline.
Market extended losses to an 18-month-low as investors avoided large bets ahead
of Federal Reserve Chairman Ben Bernanke's widely-watched speech at Jackson
Hole, Wyoming, later in the day. The ongoing concern of credit crisis in
euro-zone and sustained selling by foreign institutional investors (FIIs) made
investor sentiments edgy. NIFTY had a very flat opening but it edged lower as
most Asian stocks fell. Volatility continued as the market trimmed losses to
enter the positive terrain, and register intraday highs in morning trade. Till
the first half of trading session or say till the opening of the European
Markets, NIFTY traded extremely volatile taking a strong trading support of
4830. A negative opening across European market gave bears yet another life to
make a comeback with force. NIFTY breached the level of 4830 very swiftly and
started the bear onslaught continued till the fag end of session, dragging
equities to give away their support levels and make new lows one after another.
NIFTY made a low of 4720 for the day. Deeper Cuts were witnessed in REALTY
& INFRA, METAL, OIL & GAS, BANKING & FINANCE and CONSUMER DURABLES
Sector. For the day, NIFTY closed near to its day’s low at 4847.80 and also
below the important support levels of 4750.
Technically, NIFTY finally
touched the most awaited level of 4800, awaited since the next week of Diwali
2010. In fact on Friday, NIFTY closed below the crucial support level of 4750
at 4747.80. It was witnessed that the level of 4830, which was acting as a Good
Trading Support Level for NIFTY since last two days, was breached very swiftly
and it made a low of 4720. As mentioned earlier too that the so-called level of 4800 got achieved by NIFTY; still it is in the
down trend, as there is more Bad News in the offing in terms of International
Economic Uncertainties, hence traders and investors should be ready for the
more down side ahead. The 20-Days EMA and 50-Days SMA are in 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. Right now, the level of 5000 is playing a role of a stiff resistance level
for NIFTY on the closing basis, whereas the level of 4650 will be acting as a Good
Support Level in the coming sessions. A Fibonnaci Retracement Level is being
drawn from the High of 6338.50 (08th November, 2010) to the recent
18-Months Low marked 4720.00 by NIFTY (26th August, 2011), which
represents the level of 5100 (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 Unemployment
Rate, Overall Household Spending, Retail Trade and Large Retail Trade for the
month of July. Consumer Price Index for the month of August will be announced
in GERMANY. US will be announcing
its Personal Consumption Expenditures, Personal Income, Core Personal
Consumption Expenditure and Pending Home Sales 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 5605.16, 5370.17
and 5073.65, 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.
What does Indicators Say?
2. MACD (26 Days & 12 Days): Their Values are -251.98 and -227.10, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 9.26, -DI: 39.87, ADX: 43.34: The Negative Directional Index has gained strength over the Positive Directional Index and also the Average Directional Index is above 40, indicates that the market is in the trading range right now.
4. SMA (200 Days), SMA (50 Days) & EMA (20 Days): NIFTY is trading below the levels of of these indicators are 5605.16, 5370.17 and 5073.65.
Some Trading Stats of the Friday’s (26th August, 2011)
Trading Session:
Net Selling of Rs. 226.25 Crore in Cash while Net Buying of Rs. 1766.62 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.
Net Selling of Rs. 1612.26 Crore was witnessed in Others
Trades, whereas, Net Buying of Rs. 27.62 Crore and of Rs. 287.99 Crore was witnessed in Mutual Funds and Proprietory
Trades.
In F&O Segment Net Buying of Rs. 594.24 Crore and of Rs. 1323.46 Crore was witnessed in Index Futures
and Index Options, whereas, Net Selling of Rs. 126.30 Crore and of Rs. 24.78 Crore was witnessed in Stock Futures and Stock Options.
NIFTY AUG FUTURE ended at a Premium of 0.90
Points to the Spot NIFTY.
A view on some of the NIFTY 50 Stocks for TOMORROW:
RCOM: Can dip to the levels of 68/66, if breaches the level of 72.
GAIL: Can dip to the levels of 395/392 levels.
For the week, resistance for NIFTY comes at 4950 & 5020 levels. At the same time, 4600 & 4520 will act as major support levels.
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