Nifty Outlook for 11th October 2011

Yesterday, NIFTY made a Long White Candlestick Pattern, after the formation of a Doji Candlestick Pattern a day before, proving its formation to be right. A Doji formed on Friday, indicated the possibility of a turning point to be developed soon. NIFTY had a much muted opening and opened on the Closing level of Friday, but soon after witnessing an upbeat start, it fell sharply to intraday lows, only to bounce back positively with an equal vigour. NIFTY marked a low of 4882.05 for the day. Since then, it kept hitting fresh intraday highs with every rise. The bounce was a result of short covering and bottom fishing witnessed in the Stocks. A muted opening of European markets in green also pushed the market to day’s high, marking it a t 4991.15. REALTY & INFRA, CONSUMER DURABLES, IT, OIL & GAS, TECHNOLOGY, AUTO and METAL Stocks pulled the markets to day’s high. Finally, for the day NIFTY managed to close at 4979.60.  

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. 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.

On the Economic Front, JAPAN will be coming out with its Core Machinery Orders for the month of August, Consumer Confidence Index, Eco Watchers Survey: Outlook and Eco Watchers Survey: Current for the month of September. M2 Money Supply and Foreign Exchange Reserves for the month of September will be announced in CHINA. UK will be coming out with its DCLG House Price Index, Manufacturing Production and Industrial Production for the month of August and NIESR GDP Estimate for the month of September. IBD/TIPP Economic Optimism for the month of October 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 4942.55 on closing basis. But it is trading below all its Simple Moving Averages 200-Days SMA and 50-Days SMA of 5469.11 and 5053.92. 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 50.47 and 44.31, respectively, showing a short term positive crossover.

2. MACD (26 Days & 12 Days): Their Values are 88.10 and 36.26, respectively. A short term positive crossover is indicated by both the Moving Averages.

3. +DI: 25.18, -DI: 27.93, ADX: 18.87: 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 5469.11, 5053.92 and 4942.55.

Some Trading Stats of the Monday’s (10^th October, 2011) Trading Session:

Net Buying of Rs. 211.71 Crore in Cash and of Rs. 469.56 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.

Net Selling of Rs. 78.60 Crore, of Rs. 632.94 Crore and of Rs. 1725.57 Crore was witnessed in Mutual Funds, Proprietory Trades and Others Trades, respectively.  

In F&O Segment Net Buying of Rs. 357.91 Crore, of Rs. 25.67 Crore, of Rs. 77.33 Crore and of Rs. 8.65 Crore was witnessed in Index Futures, Index Options, Stock Futures and Stock Options, respectively.  

NIFTY OCT FUTURE ended at a Premium of 13.70 Points to the Spot NIFTY.

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

BHEL:               Can touch the levels of 338/340, if crosses the level of 332.

IDFC:                Can touch the levels of 125/127, if crosses the level of 122.

RELCAPITAL:     Can touch the levels of 348/352, if crosses the level of 340.

SESAGOA:        Can touch the levels of 222/224, if crosses the level of 218.

TATAMOTORS:  Can touch the levels of 174/176, if crosses the level of 171.

TATAPOWER:    Can touch the levels of 106/108, if crosses the level of 104.

COALINDIA:      Can touch the levels of 350/352, if crosses the level of 345.

Pre Market Calls:

ABAN: Buy ONLY IF ITS TRADES ABOVE 368 for the TARGETS of 375/378, with the STRICT SL of 363.

BOMDYEING: Buy ONLY IF ITS TRADES ABOVE 400 for the TARGETS of 408/412, with the STRICT SL of 395.

DELTACORP: Buy ONLY IF ITS TRADES ABOVE 100.60 for the TARGETS of 104/106, with the STRICT SL of 99.20.

For the day, intraday resistance for NIFTY comes at 5010 / 5050 / 5080 levels. At the same time, 4950 / 4920 / 4880 will act as major intraday support levels.