Nifty Outlook for 12th December 2011

On Friday, NIFTY made a Black Doji Candlestick Pattern. Continuing its meltdown for the second day in a row, the market closed over 1.5% down-recovering from earlier losses- as the make-or-break EU summit failed to fully beat back the contagion concerns of debt crisis. In a highly volatile trade, market opened with huge losses. NIFTY witnessed a Gap Down Opening of almost 72 points. NIFTY marked a low of 4841.75 for the day, breaching the support level of 4850, but maintained the level of 4820. Markets staged a smart recovery, wiping off major losses as buying emerged around support levels. Despite the turnaround in overall trend, the key NIFTY failed to enter the positive terrain. All the Sectoral indices, led by CAPITAL GOODS and AUTO, closed in the negative zone, with losses of up to 2.71% and 2.33% respectively. ENGINEERING & INFRA Stocks were hammered, reflecting the edginess among investors over potential contraction in the index of industrial production (IIP) growth index for October. For the day, NIFTY marked a high of 4918.35, and closed above the crucial support level of 4850 at 4866.70.

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. NIFTY has again dipped below 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). NIFTY has again reverted from the level of 61.80% (5039.54) of Retracement marked since last two trading sessions. The lower trendline marked from the low of 4720 marked on 26^th August, 2011 is now acting as a Strong Support for NIFTY on closing basis, if it gets breach NIFTY may dip to the levels of 4750/4650 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 4650 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 Tertiary Industry Index for the month of October, Consumer Confidence Index and Machine Tool Orders for the month of November. Wholesale Price Index for the month of November will be announced in GERMANY. US will be announcing its Monthly Budget Statement for the month of November. INDIA will be coming out with IIP Data (Index of Industrial Production) 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.

NIFTY has again dipped below its 20-Days EMA (Exponential Moving Average) and 50-Days SMA (Simple Moving Average) of 4952.42 and 5016.72 and is still trading below its 200-Days SMA of 5335.48. 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 43.94 and 46.77, respectively. The indicator is moving towards oversold zone from the overbought zone. 

2. MACD (26 Days & 12 Days): Their Values are 119.36 and 147.37, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 22.45, -DI: 31.61, ADX: 19.65: The Negative Directional Index has gained strength over the Positive Directional Index and the Average Directional Index is below 20, indicates that the market is in the trading range.

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 5335.48, 5016.72 and 4952.42, respectively.

Some Trading Stats of the Friday’s (09^th December, 2011) Trading Session:

Net Selling of Rs. 248.57 Crore in Cash and of Rs. 2476.16 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.

Net Buying of Rs. 303.58 Crore and of Rs. 1117.75 Crore was witnessed in Mutual Funds and Others Segment, respectively, whereas, Net Selling of Rs. 129.44 Crore was witnessed in Proprietory Trades.

In F&O Segment Net Buying of Rs. 102.12 Crore was witnessed in Stock Futures, whereas, Net Selling of Rs. 1091.51 Crore, of Rs. 1472.55 Crore and of Rs. 14.21 Crore was witnessed in Index Futures, Index Options and Stock Futures.

NIFTY DEC FUTURE ended at a Premium of 19.20 Points to the Spot NIFTY.

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

ACC:                Can dip to the levels of 1145/1135, if breaches the level of 1160.

M&M:               Can dip to the levels of 688/680, if breaches the level of 702.

RELIANCE:        Can dip to the levels of 740/735, if breaches the level of 1160.

SIEMENS:          Can dip to the levels of 675/670, if breaches the level of 690.

For the day, intraday resistance for NIFTY comes at 4880 / 4920 / 4950 levels. At the same time, 4820 / 4780 / 4750 will act as major intraday support levels.