Nifty Outlook for 07th December 2011

Yesterday, NIFTY made a White Doji Candlestick Pattern. It was a trading session full of uncertainty NIFTY registered a negative opening of almost 15-20 points negativity. After witnessing a range bound movement till the morning session, it marked a low of 5002.55 for the day and immediately reverted from that level. Following a strong opening on the European markets, NIFTY entered the positive terrain and registered the intraday high of 5055.40. Nevertheless, the recovery lasted for few minutes, as lack of buying interest pulled down the market back in red. Thereafter, NIFTY traded range-bound for rest of the day and ended on a negative note. Not much of Sector Specific action was witnessed too for the day. For the day NIFTY ended at 5039.15.

Technically, a Negative Crossover between 200-Days SMA (Simple Moving Average) and 50-Days SMA is still intact. Even a Negative Crossover between the 50-Days SMA and 20-Days EMA has developed since, which signals selling pressure to creep in coming trading sessions. Yesterday, NIFTY has crossed its 20-Days EMA and 50-Days SMA on the closing basis. 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). Right now the level of 61.80% (5039.54) of Retracement marked is acting as a resistance for NIFTY on the closing basis. If it crosses it successfully by marking consecutive 2-3 closing above it, it may also touch the level of 5180/5250 in the coming trading sessions. 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. 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 Trade Balance – BOP Basis, Current Account and Core Machinery Orders for the month of October, Coincident Index and Leading Economic Index for the month of November. Manufacturing Production and Industrial Production for the month of October and BRC Shop Price Index for the month of November will be announced in UK. GERMANY will be announcing its Industrial Production for the month of October. MBA Mortgage Applications and Consumer Credit 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) and 50-Days SMA (Simple Moving Average) of 4952.87 and 5017.75, respectively on the closing basis, but is still trading below its 200-Days SMA of 5343.21. The 14-Days RSI (Relative Strength Index) is heading towards its overbought zone now, but with every jerk it gets inclined towards the oversold zone. The 26-Days MACD (Moving Average Convergence and Divergence) has also reverted from its oversold zone.

What does Indicators Say?

                               

1. RSI (14 Days & 9 Days): The values are 53.99 and 45.36, respectively. The indicator is moving towards oversold zone from the overbought zone. 

2. MACD (26 Days & 12 Days): Their Values are 189.82 and 154.11, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 24.74, -DI: 24.06, ADX: 21.82: 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 level of  200-Days SMA, but has crossed its 20-Days EMA and 50-Days SMA on closing basis. These indicators are at the levels of 5345.44, 5017.75 and 4952.87, respectively.

Some Trading Stats of the Monday’s (05^th December, 2011) Trading Session:

Net Buying of Rs. 146.73 Crore in Cash while Net Selling of Rs. 735.45 Crore in F&O Segment by FIIs was witnessed on Monday’s Trading Session.

Net Selling of Rs. 1.45 Crore, of Rs. 488.79 Crore and of Rs. 522.91 Crore was witnessed in Mutual Funds, Proprietory Trades and Others Segment, respectively.

In F&O Segment Net Buying of Rs. 22.01 Crore was witnessed in Stock Options, whereas, Net Selling of Rs. 216.28 Crore, of Rs. 257.77 Crore and of Rs. 283.41 Crore was witnessed in Index Futures, Index Options and Stock Futures, respectively.

NIFTY DEC FUTURE ended at a Premium of 26.45 Points to the Spot NIFTY.

Pre Market Calls:

ABB: Buy ONLY IF IT TRADES ABOVE 640 for the TARGETS of 652/658, with the STRICT SL of 632.

RAJESHEXPO: Buy ONLY IF IT TRADES ABOVE 140 for the TARGETS of 144/145, with the STRICT SL of 138.

For the day, intraday resistance for NIFTY comes at 5080 / 5120 / 5150 levels. At the same time, 4980 / 4950 / 4920 will act as major intraday support levels.