Nifty Outlook for 14th November 2011

On Friday, NIFTY made a High Wave Candlestick Pattern, which shows a loss of sense of direction and great amount of indecision in the markets. Market put an end to a choppy session on a negative note. Market kick-started trade on a negative note, with a Gap down of almost 60 points as if to catch up with the Asian equities, which registered a steep fall the day before. Very soon NIFTY marked an intraday high of 5198.60, but could not even touch the level of 5200. The sentiments, nevertheless, deteriorated with the announcement of the Index of Industrial Production (IIP) numbers. The IIP growth, which fell to a two-year low, slipped to 1.9% versus 4.1% in August. Manufacturing growth was at 2.1% as against 4.5% and mining growth was at -5.6% vs -3.4% in August. Influenced by the below-than-expected IIP numbers, NIFTY dipped to the intraday low of 5142.25, breaching the support of 5150. Market, which was down and out with the announcement of IIP numbers, breathed a sigh of relief when the weekly inflation numbers came out. For the week ended October 29, primary articles inflation reduced to 11.43% versus 12.03% (WoW). Likewise, food articles inflation too fell by 30 basis points to 11.81% versus 12.21% (WoW), while fuel group inflation remained unchanged at 14.5%. NIFTY again bounced back to the levels of 5180/5190, but could not mark a new high for the day. BANKING & FINANCE, METAL, CAPITAL GOODS and REALTY & INFRA were the sectors which led this downfall. However, for the day NIFTY ended above the opening level of 5159.75 at 5168.85 and also above the level of 5150.

Technically, a Negative Crossover between 200-Days SMA (Simple Moving Average) and 50-Days SMA is still intact. NIFTY has crossed its 20-Days EMA (Exponential Moving Average) and 50-Days SMA (Simple Moving Average) of 5179.31 and 5057.63, respectively on closing basis. Both the averages have given a Positive Crossover, as the 20-Days EMA has crossed the 50-Days SMA from downside. On Friday, NIFTY ended below its 20-Days EMA, which was till now acting as a Good Support Level for NIFTY. Also the level of 5200 which was still acting as a Good Support Level for NIFTY, acted as a Strong Resistance for it on Friday. It is trading much below its 200-Days SMA of 5390.04. A Fibonnaci Retracement Level is being drawn from the High of 6338.50 (08^th November, 2010) to the 18-Months Low marked 4720.00 by NIFTY (26^th August, 2011). NIFTY has crossed the level of 61.80% level of 5101.97, but is again trading below the 50.00% level of 5338.27. Still the markets all over the Globe are doubtful about the clarity of the European Debt Deal. A positive action is being eagerly awaited from Greece and Italy all around the Globe. 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.   

On the Economic Front, JAPAN will be coming out with its Industrial Production and Capacity Utilization for the month of September. Industrial Production for the month of September will be announced by EUROPEAN MONETARY UNION. INDIA will be coming out with its Monthly Inflation Data for the month of October, 2011.

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.

Q2 FY11 Results Season is running all over the Financial World. Hence, more of Sector Specific and Stock Specific actions will be witnessed. Here is a quick look at some important results to be announced domestically and internationally tomorrow. ADANIENT, AREVAT&D, BALRAMCHIN, BHEL, BHUSANSTL, BPL, CIPLA, DCHL, FCS, FORTIS, GITANJALI, GTL, GMDCLTD, GSPL, INDIACEM, JPASSOCIAT, JSWSTEEL, M&M, MAX, MMTC, MONSANTO INDIA, OILINDIA, PATELENG, PVP, SAREGAMA, SOBHA, STERLINBIO, TANLA SOLUTIONS, TATAMOTORS, TATAPOWER, UCAL FUEL and UNITECH will be announcing their Results in INDIA. REpower SYSTEMS AG will be announcing their Results in GERMANY.

NIFTY closed below its 20-Days EMA (Exponential Moving Average) of 5179.31 on Friday, but is trading above its 50-Days SMA (Simple Moving Average) of 5057.63 on closing basis. It is trading much below its 200-Days SMA of 5390.04. 14-Days RSI (Relative Strength Index) and 26-Days MACD (Moving Average Convergence and Divergence) are moving towards their overbought zone after being reverted from the oversold zone.

What does Indicators Say?

                         

1. RSI (14 Days & 9 Days): The values are 51.03 and 57.03, respectively, showing a short term positive crossover.

2. MACD (26 Days & 12 Days): Their Values are 132.73 and 115.91, respectively. A short term positive crossover is indicated by both the Moving Averages.

3. +DI: 26.52, -DI: 24.91, ADX: 17.53: The Positive Directional Index has gained strength over the Negative 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  200-Days SMA and 20-Days EMA, but above the levels of 50-Days SMA. These indicators are at the levels of 5390.04, 5057.63 and 5179.31, respectively. 

Some Trading Stats of the Friday’s (11^th November, 2011) Trading Session:

Net Selling of Rs. 83.26 Crore in Cash and of Rs. 1173.79 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.

Net Buying of Rs. 299.26 Crore and of Rs. 376.43 Crore was witnessed in Mutual Funds and Others Trades, respectively, whereas, Net Selling of Rs. 686.97 Crore was witnessed in Proprietory Trades.

In F&O Segment Net Selling of Rs. 1323.92 Crore, of Rs. 479.22 Crore and of Rs. 0.98 Crore was witnessed in Index Futures, Stock Futures and Stock Options, respectively, whereas, Net Buying of Rs. 630.33 Crore was witnessed in Index Options.

NIFTY NOV FUTURE ended at a Premium 22.90 Points to the Spot NIFTY.

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

AXISBANK:        Can dip to the levels of 1035/1025, if breaches the level of 1050.

HINDALCO:       Can dip to the levels of 125/124, if breaches the level of 128.

ICICIBANK:        Can dip to the levels of 800/795, if breaches the level of 820.

LT:                   Can dip to the levels of 1300/1290, if breaches the level of 1325.

TATAMOTORS:  Can dip to the levels of 178/176, if breaches the level of 181.

WIPRO:            Can touch the levels of 390/392, if crosses the level of 384.

Pre Market Calls:


HINDOILEXP: Buy ONLY IF ITS TRADES ABOVE 135 for the TARGETS of 138/140, with the STRICT SL of 133.


JUBLFOOD: Sell ONLY IF IT TRADES BELOW 772 for the TARGETS of 755/750, with the STRICT SL of 781.

For the day, intraday resistance for NIFTY comes at 5180 / 5220 / 5250 levels. At the same time, 5120 / 5080 / 5050 will act as major intraday support levels.