Yesterday, NIFTY made a Black Candlestick Pattern, with a
longer lower shadow. Equities fell sharply as investors started off the final
quarter of 2011 on a gloomy note, following a global sell-off. Reports
suggesting Greece’s potential to miss deficit-reduction targets set by IMF and
EU for this year and next weighed on sentiments globally. Reflecting weakness
across Asian peers, the market kicked off trade with a gap down opening,
skidding to one week lows. NIFTY opened with a Gap Down of 70 points. Nonetheless,
it pared losses during late morning trade on the back of short covering marked
the day’s high of 4879.15. Lack of positive triggers, deep cut in European
markets and data showing muted-to-weak advance tax payments by India Inc's top
100 companies dragged the bourses to fresh one week lows in early afternoon
trade. NIFTY fell to intraday low of 4823.90. The level of 4900, which was
acting as a strong support since last few trading sessions was breached in the
opening itself and NIFTY, traded much below throughout the session. The
struggle continued for the rest of the session, where recovery seemed a
far-fetched dream. All the sectoral indices, led by realty and metals, closed
in the negative zone, with losses of up to 4.59% and 4% respectively. Finally,
for the day NIFTY ended below the level of 4850 at 4849.50.
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. Again NIFTY reverted
from the 20-Days EMA (Exponential Moving Average) of 4998.68 by marking a low
of 4924.30 and closing below it at 4943.25, however, in intraday trading it
marked a high of 5025.55. 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 (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. 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.
On the Economic Front, JAPAN will be coming out with its Labor
Cash Earnings for the month of August. Halifax House Prices, PMI Construction and
BRC Retail Sales Monitor for the month of September will be announced in UK. EUROPEAN MONETARY UNION will be
announcing Producer Price Index for the month of August. Factory Orders 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 again reverted from the
20-Days EMA (Exponential Moving Average) of 4984.48 by marking a low of 4823.90
and closing below it at 4849.50. It is still trading below its Simple Moving
Averages 200-Days SMA and 50-Days SMA of 5491.10 and 5114.71. 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?
2. MACD (26 Days & 12 Days): Their Values are 9.38 and 10.04, respectively. A short term positive crossover is indicated by both the Moving Averages.
3. +DI: 21.66, -DI: 32.23, ADX: 19.11: 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 5491.10, 5114.71 and 4984.48.
Some Trading Stats of the Monday’s (03rd October, 2011)
Trading Session:
Net Selling of Rs. 825.89 Crore in Cash while Net Buying of Rs. 971.96 Crore in F&O Segment by
FIIs was witnessed on Monday’s Trading Session.
Net Buying of Rs. 71.02 Crore was witnessed in Mutual
Funds, whereas, Net Selling of Rs. 367.53 Crore and of Rs. 1031.33 Crore was witnessed in Proprietory Trades and Others
Trades.
In F&O Segment Net Buying of Rs. 1611.66 Crore and of Rs. 10.38 Crore was witnessed in Index Options
and Stock Options, respectively, whereas, Net Selling of Rs. 471.07 Crore and of Rs. 179.02 Crore was witnessed in Index Futures and Stock Futures
Segment.
NIFTY OCT FUTURE ended at a Premium of 8.25
Points to the Spot NIFTY.
A view on some of the NIFTY 50 Stocks for TOMORROW:
BPCL: Can touch the levels of 690/692, if crosses the level of 682.
For the day, intraday resistance for NIFTY comes at 4880 / 4920 / 4950 levels. At the same time, 4820 / 4780 / 4750 will act as major intraday support levels.
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