Nifty Outlook for 08th December 2011

Yesterday, NIFTY made a White Candlestick Pattern, with a longer higher shadow. It was a bit sluggish session for the day, NIFTY started the day with a mild gain of 10 points only. It was a range bound movement for the market till the morning session, but before the opening of the European Markets it marked an intraday low of 5032.25. But with the Strong Opening of European Markets, NIFTY again bounced back from the day’s low entering into Green Territory and marked an intraday high of 5099.25. However, during the late afternoon session, NIFTY again slipped from the higher levels on back of heavy selling in healthcare stocks and closed off the day’s highs, in green. IT and TEXTILE Sectors were the major gainers for the day, whereas, PHARMA Sector was the major loser for the day. For the day NIFTY ended at 5062.60.

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). Yesterday, NIFTY crossed the level of 61.80% (5039.54) of Retracement marked by marking a high of 5099.25 for the day and also closed above it at 5062.60. If this level is crossed 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 Q3 Gross Domestic Product, Money Supply M2+CD, Eco Watchers Survey: Current and Eco Watchers Survey: Outlook for the month of November. BoE Asset Purchase Facility and BoE Interest Rate Decision will be announced in UK. EUROPEAN MONETARY UNION will be coming out with ECB Interest Rate Decision. Continuing Jobless Claims, Initial Jobless Claims and Wholesale Inventories 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 4963.32 and 5016.34, respectively on the closing basis, but is still trading below its 200-Days SMA of 5341.25. 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 55.27 and 47.35, respectively. The indicator is moving towards oversold zone from the overbought zone. 

2. MACD (26 Days & 12 Days): Their Values are 171.40 and 157.57, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 26.61, -DI: 22.96, ADX: 20.79: 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 5341.25, 5016.34 and 4963.32, respectively.

Some Trading Stats of the Wednesday’s (07^th December, 2011) Trading Session:

Net Buying of Rs. 135.36 Crore in Cash and of Rs. 745.24 Crore in F&O Segment by FIIs was witnessed on Wednesday’s Trading Session.

Net Buying of Rs. 443.46 Crore and of Rs. 933.38 Crore was witnessed in Mutual Funds and Others Segment, respectively, whereas, Net Selling of Rs. 641.39 Crore was witnessed in Proprietory Trades.

In F&O Segment Net Buying of Rs. 539.81 Crore, of Rs. 427.16 Crore and of Rs. 8.34 Crore was witnessed in Index Futures, Index Options and Stock Options, respectively, whereas, Net Selling of Rs. 230.07 Crore was witnessed in Stock Futures.

NIFTY DEC FUTURE ended at a Premium of 23.50 Points to the Spot NIFTY.

Pre Market Calls:

CENTURYTEX: Buy AT THE LEVELS OF 282-283 for the TARGETS of 289/292, with the STRICT SL of 278.

For the day, intraday resistance for NIFTY comes at 5080 / 5120 / 5150 levels. At the same time, 5020 / 4980 / 4950 will act as major intraday support levels.