On Friday, NIFTY made a Bullish Doji Star Candlestick Pattern, which indicates that Bears were in control during the downtrend but now a change is implied by the appearance of a star that shows that the bulls and the bears are in equilibrium. The downward energy is dissipating. Things are not favorable for continuation of a bear market. The confirmation of the trend reversal may be in the form of a white candlestick, a large gap up or a higher close on the next trading day. It was carnage at Dalal Street today. The equities got poorly butchered on back of global concerns. NIFTY witnessed a Gap down Opening of almost 80 points on the back of Weak Global Cues. But it reverted from the level of 4820 and made a high of 4893.60 for the day. NIFTY marked a high before the opening of the European Markets. Later, triggered by 2-3% fall in the European markets, equities back home sank to the bottom of the chart. NIFTY plunged from the key level of 4,800 at 4,796.10. There were huge cuts in the IT, CAPITAL GOODS and BANKING & FINANCE Sectors. In the last half an hour of trading, a bit of short covering was witnessed, which helped NIFTY to end the trading session and week at 4845.65.

Fear all over the Globe is the main cause of such fierceful crash within a short span of time. Still more bad news is in the offing regarding the International Economies. Indian Markets are just paying the cost of Globalization, hence affected to that level much. Right now, no signs are visible for a Pullback, but at the same time, traders and investors should be ready for a sharp pullback, as this crash is coming with huge Gaps and with volume backed by fears more.

Technically, NIFTY finally touched the most awaited level of 4800, awaited since the next week of Diwali 2010. It made a new 52-Week Low or say 21-Months Low of 4796.10 in intraday trading, but closed at 4845.65. 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. On Friday, NIFTY breached the level of 4900 too very swiftly, in the opening itself. It opened at 4859.30 levels and melted throughout the session. 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 4750 will be acting as a Good Support Level in the coming sessions. 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. A Fibonnaci Retracement Level is being drawn from the High of 6338.50 (08^th November, 2010) to the recent 15-Months Low marked 4796.10 by NIFTY (19^th August, 2011), which represents the level of 5160 (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. 

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 5640.18, 5429.96 and 5214.77, 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?

1. RSI (14 Days & 9 Days): The values are 22.33 and 28.55, respectively, showing a short term positive crossover.

2. MACD (26 Days & 12 Days): Their Values are -239.35 and -165.90, respectively. A short term positive crossover is indicated by both the Moving Averages.

3. +DI: 8.00, -DI: 43.12, ADX: 36.82: 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 5640.18, 5429.96 and 5214.77.

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

Net Selling of Rs. 902.61 Crore in Cash while Net Buying of Rs. 885.35 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.

Net Selling of Rs. 1310.12 Crore was witnessed in Proprietory Trades, whereas, Net Buying of Rs. 129.98 Crore and of Rs. 1740.39 Crore was witnessed in Mutual Funds and Others Segment.

In F&O Segment Net Selling of Rs. 383.21 Crore and of Rs. 34.49 Crore was witnessed in Stock Futures and Stock Options, whereas, Net Buying of Rs. 402.99 Crore and of Rs. 900.07 Crore was witnessed in Index Futures and Index Options.  

NIFTY AUG FUTURE ended at a Premium of 5.20 Points to the Spot NIFTY.

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

CIPLA:              Can touch the levels of 290/292, if breaches the level of 286.

HINDALCO:       Can touch the levels of 143/144, if breaches the level of 140.

TATASTEEL:     Can touch the levels of 468/470, if breaches the level of 460.

For the day, intraday resistance for NIFTY comes at 4880 / 4920 / 4950 levels. At the same time, 4800 / 4780 / 4750 will act as major intraday support levels. 

 

For the week, resistance for NIFTY comes at 5020 & 5130 levels. At the same time, 4650 & 4590 will act as major support levels.