Nifty Outlook for 30th September 2011

Yesterday, NIFTY made a White Candlestick Pattern, engulfing the previous day’s candles into it. NIFTY marked a flat opening with negative bias, down by 20 points almost. Within minutes of the opening bell, NIFTY extended losses and fell deeper in red to hit fresh intraday lows, marking it at 4906.00. It did not breach the level of 4900, consolidating there in the early hours of trade. NIFTY again reverted strongly on the back of Buying Interest from the day’s low point. Later an ease in weekly inflation data further added strength on the benchmark indices and pulled them into the positive terrain. Since then, the gauges kept on hitting fresh intraday highs till late afternoon session. For the week ended Sept 17, primary articles inflation rose 11.43% vs 12.1%, WoW. For the same period, food articles inflation stood at 9.13 vs 8.84%, WoW, and fuel group inflation was at 14.69% vs 13.96%. The broader market too pared most of the early losses, but failed to enter the positive terrain. NIFTY gained exorbitantly after the opening of the European Markets too and marked a high of 5034.25 for the day, crossing an important physiological level of 5000. Sectorally, Major Gainers for the day were AUTO, IT, BANKING & FINANCE, FMCG and OIL & GAS, whereas, CONSUMER DURABLES, CAPITAL GOODS and HEALTHCARE were the major losers for the day. Finally, for the day NIFTY ended above the level of 5000 and near to the day’s high at 5025.45.

Technically, NIFTY took a Strong support of 4720 once again and bounced back from that. 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. Yesterday, once again NIFTY crossed the 20-Days EMA (Exponential Moving Average) of 5504.52 by marking a high of 5034.25 and closing above it at 5015.45. The 20-Days EMA and 50-Days SMA are in a Negative Crossover, hence, indicating more selling pressure to creep in. Also a Negative Crossover between 200-Days SMA (Simple Moving Average) and 50-Days SMA is still intact. 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 4720 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 (08^th November, 2010) to the recent 18-Months Low marked 4720.00 by NIFTY (26^th 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. NIFTY has got reverted from this level for the third time and closed much below it. Still extreme uncertainties lie in the Markets although not in short term but in long term period. Hence, still the traders and investors should wait for fruitful results ahead. However, Traders are suggested to take the advantage of Swing Trading, which will appear many times in between.   

5170 on the upper side and 4720 on the lower side, NIFTY is trading in this range since the Starting of September series. It is making lower lows but is facing resistance at the same level again and again. Breakout on the either side will be deciding the further direction of the market in the short term. In the upcoming trading sessions, NIFTY may again head towards the level of 5170 due to short term positive news flows and pull back effect backed by short covering.

On the Economic Front, JAPAN will be coming out with its Vehicle Production, Housing Starts, Construction Orders and Annualized Housing Starts for the month of August. Retail Sales for the month of August will be announced in GERMANY. EUROPEAN MONETARY UNION will be announcing Unemployment Rate for the month of August and Consumer Price Index for the month of September. Core Personal Consumption Expenditure – Prices Index, Personal Consumption Expenditure – Prices Index and Personal Consumption Expenditures for the month of July, Chicago Purchasing Managers’ Index and Reuters/Michigan Consumer Sentiment Index for the month of September and Personal Income for the month of August will be announced in US.  

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 has crossed its 20-Days EMA (Exponential Moving Average) of 5004.52 on closing basis. But it is trading below all its Simple Moving Averages 200-Days SMA and 50-Days SMA of 5501.39 and 5142.46. 14-Days RSI (Relative Strength Index) and 26-Days MACD (Moving Average Convergence and Divergence) have reverted from the oversold zone, but still with every sell off in the markets they are heading towards their oversold zone.

What does Indicators Say?

    

1. RSI (14 Days & 9 Days): The values are 49.21 and 45.65, respectively, showing a short term positive crossover.

2. MACD (26 Days & 12 Days): Their Values are 13.51 and 16.63, respectively. A short term positive crossover is indicated by both the Moving Averages.

3. +DI: 25.01, -DI: 29.94, ADX: 19.85: The Negative Directional Index has gained strength over the Positive Directional Index and also the Average Directional Index is below 20, indicates that the market has entered in to the trading range right now.

4. SMA (200 Days), SMA (50 Days) & EMA (20 Days): NIFTY is trading below the levels of these indicators are 5501.39, 5142.46 and 5004.52.

Some Trading Stats of the Thursday’s (29^th September, 2011) Trading Session:

Net Selling of Rs. 230.30 Crore in Cash while Net Buying of Rs. 1273.44 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.

Net Buying of Rs. 99.73 Crore and of Rs. 438.08 Crore was witnessed in Mutual Funds and Others Trades, whereas, Net Selling of Rs. 953.55 Crore was witnessed in Proprietory Trades.  

In F&O Segment Net Buying of Rs. 1132.85 Crore, of Rs. 585.32 Crore and of Rs. 39.16 Crore was witnessed in Index Options, Stock Futures and Stock Options, respectively, whereas, Net Selling of Rs. 483.89 Crore was witnessed in Index Futures Segment.  

NIFTY SEP FUTURE ended at a Premium of 4.00 Points to the Spot NIFTY.

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

CIPLA:              Can touch the levels of 296/298, if crosses the level of 290.

GRASIM:            Can touch the levels of 2350/2360, if crosses the level of 2335.

HCLTECH:         Can touch the levels of 420/422, if crosses the level of 412.

HDFC:              Can touch the levels of 663/668, if crosses the level of 654.

HEROMOTOCO: Can touch the levels of 2020/2030, if crosses the level of 2005.

JPASSOCIAT:    Can touch the levels of 78/78.50, if crosses the level of 75.

RELIANCE:        Can touch the levels of 820/825, if crosses the level of 810.

For the day, intraday resistance for NIFTY comes at 5050 / 5080 / 5120 levels. At the same time, 4980 / 4950 / 4920 will act as major intraday support levels.