Nifty Outlook for 30th November 2011

Yesterday, NIFTY made a Long Black Candlestick Pattern, but did not engulfed the previous day’s candlestick. The markets decline significantly following the opening showing that sellers were aggressive. It was mayhem on Dalal Street. Post a strong pre-market session, the markets fell below equator to open in red. This was the result of profit booking, in addition with rising conflict over FDI in retail. However, NIFTY kept rising in a steady manner and re-entered the positive terrain and registered the intraday high of 4866.10. Nevertheless, the recovery was short lived as market slipped back in red on back of heavy selling in index heavyweight Reliance Industries (RIL). Thereafter, the equities traded range-bound till late afternoon session. The stock dropped 2.30% after reports suggested that the company initiated arbitration proceedings against the government to ensure full recovery of expenses incurred in developing the KG-D6 block. The index big boy believes uncertainty over this issue was hindering revenue generation from the gas-rich block. Later, following weak opening on the European markets, the market slipped further in red to register intraday lows. NIFTY made a low of 4787.10. REALTY & INFRA, BANKING & FINANCE and OIL & GAS Sectors were the laggards for the day. For the day NIFTY ended at 4805.10, below the crucial level of 4850.

Technically, a Negative Crossover between 200-Days SMA (Simple Moving Average) and 50-Days SMA is still intact. Again a Negative Crossover between the 50-Days SMA and 20-Days EMA has developed since last two days, which signals selling pressure to creep in coming trading sessions. NIFTY is once again trading much below its 20-Days EMA, 50-Days SMA and 200-Days SMA. A Fibonnaci Retracement Level is being drawn from the High of 6338.50 (08^th November, 2010) to the 20-Months Low marked 4639.10 by NIFTY (24^th November, 2011). Still the markets all over the Globe are doubtful about the clarity of the European Debt Crisis. A positive action is being eagerly awaited from PIIGS Countries all around the Globe. Hence, still the traders and investors should wait for fruitful results ahead. With deteriorating International Economic Scenario NIFTY even breached its important support level of 4720, which was acting as a Strong Support level since the month of August. Now, the level of 5039.54 (61.80% Level of Retracement) is acting as a crucial resistance, whereas, the level of 5650 is acting as a good support level on the closing basis for NIFTY. Investors are suggested to avoid the markets to invest at this time; 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 Labor Cash Earnings, Housing Starts and Construction Orders for the month of October. Gfk Consumer Confidence for the month of November will be announced in UK. GERMANY will be coming out with Retail Sales for the month of October, Unemployment Change and Unemployment Rate for the month of November. Unemployment Rate for the month of October and Consumer Price Index – Core for the month of November will be announced by EUROPEAN MONETARY UNION. Q3 Unit Labor Costs, MBA Mortgage Applications, Pending Home Sales and Nonfarm Productivity for the month of October, Chicago Purchasing Manager’s Index and ADP Employment Change for the month of November will be announced in US. INDIA will be coming out with Q2 GDP (Gross Domestic Number).

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 much below all its moving averages of 20-Days EMA (Exponential Moving Average), 50-Days SMA (Simple Moving Average) and 200-Days SMA of 4842.68, 5027.23 and 5349.43, respectively. The 14-Days RSI (Relative Strength Index) has again reverted from its Oversold zone, but with every jerk it gets inclined towards the oversold zone. The 26-Days MACD (Moving Average Convergence and Divergence) is still trading in the oversold zone.

What does Indicators Say?

                            

1. RSI (14 Days & 9 Days): The values are 39.63 and 37.51, respectively. The indicator is moving towards oversold zone from the overbought zone. 

2. MACD (26 Days & 12 Days): Their Values are 184.89 and 88.46, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 17.19, -DI: 31.00, ADX: 26.18: 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's trend is gaining strength.

4. SMA (200 Days), SMA (50 Days) & EMA (20 Days): NIFTY is trading below the levels of  200-Days SMA, 20-Days EMA and 50-Days SMA. These indicators are at the levels of 5349.43, 5027.23 and 4842.68, respectively.

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

Net Selling of Rs. 320.87 Crore in Cash and of Rs. 252.93 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.

Net Selling of Rs. 52.70 Crore, of Rs. 698.11 Crore and of Rs. 1231.97 Crore was witnessed in Mutual Funds, Proprietory Trades and Others Segment, respectively.

In F&O Segment Net Buying of Rs. 245.46 Crore, of Rs. 266.01 Crore and of Rs. 16.60 Crore was witnessed in Index Futures, Stock Futures and Stock Options, respectively, whereas, Net Selling of Rs. 781.00 Crore was witnessed in Index Options.

NIFTY DEC FUTURE ended at a Premium of 11.65 Points to the Spot NIFTY.

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

AXISBANK:        Can dip to the levels of 955/945, if touches the level of 975.

For the day, intraday resistance for NIFTY comes at 4820 / 4850 / 4880 levels. At the same time, 4780 / 4750 / 4720 will act as major intraday support levels.