Nifty Outlook for 02nd December 2011

Yesterday, NIFTY made a Black Candlestick Pattern, with a higher upper shadow. Markets had a smooth upswing, free of volatility and drama. The central banks of Europe, US, Britain, Canada, Japan and Switzerland on Wednesday reduced rates on the borrowing cost of dollars. The move aimed to make loans cheaper so that banks can continue to operate smoothly. Globally, market cheered this dramatic attempt made by central banks to pump more money into the financial system. Due to Positive News Flow all around the globe and robust closing of European and American Markets last night, NIFTY witnessed an amazing Gap Up Opening of almost 140 points. Immediately within seconds of opening it marked an intraday high of 5011.90. After opening near intraday highs, NIFTY trimmed initial gains marginally and moved in a tight range till the closing bell. METAL, BANKING & FINANCE and REALTY & INFRA Sectors were the biggest gainers for the day, whereas, PHARMA Sector was the biggest laggard for the day. For the day NIFTY ended at 4936.85.

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). The lower trendline marked form the low of 4720 marked on 26^th August, 2011 is acting as a Strong Resistance right now for NIFTY on closing basis, if it gets cross NIFTY May touch the levels of 5030 in the coming trading sessions. Due to Huge Gap Up Opening NIFTY marked a high of 5011.90 for the day and crossed both the 50-Days SMA and 20-Days EMA but on the closing basis, NIFTY slipped below 50-Days SMA and closed above the 20-Days EMA. 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, UK will be coming out with its Halifax House Prices, PMI Construction for the month of November. Producer Price Index for the month of November will be announced in EUROPEAN MONETARY UNION. US will be announcing its Unemployment Rate, Nonfarm Payrolls, Average Weekly Hours and Average Hourly Earnings for the month of November.

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 4836.59 on the closing basis, but is still trading below its moving averages of 50-Days SMA (Simple Moving Average) and 200-Days SMA of 5019.41 and 5345.44, 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 48.45 and 40.34, respectively. The indicator is moving towards oversold zone from the overbought zone. 

2. MACD (26 Days & 12 Days): Their Values are 207.87 and 130.39, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 24.68, -DI: 27.48, ADX: 25.08: 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 5345.44, 5019.41 and 4932.59, respectively.

Some Trading Stats of the Thursday’s (01^st December, 2011) Trading Session:

Net Buying of Rs. 687.26 Crore in Cash and of Rs. 2923.42 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.

Net Selling of Rs. 783.76 Crore and of Rs. 8.77 Crore was witnessed in Proprietory Trades and Others Segment, respectively, whereas, Net Buying of Rs. 4.29 Crore was witnessed in Mutual Funds.

In F&O Segment Net Buying of Rs. 1035.87 Crore, of Rs. 1559.53 Crore, of Rs. 311.93 Crore and of Rs. 16.09 Crore was witnessed in Index Futures, Index Options, Stock Futures and Stock Options, respectively.

NIFTY DEC FUTURE ended at a Premium of 26.90 Points to the Spot NIFTY.

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

BHEL:               Can dip to the levels of 270/268, if breaches the level of 275.

 For the day, intraday resistance for NIFTY comes at 4950 / 4980 / 5020 levels. At the same  time, 4880 / 4850 / 4820 will act as major intraday support levels.