Yesterday, NIFTY made a Black Opening Marubozu Candlestick Pattern.
This formation suggests that it was a day for bears and such a bearish rally
should cause concern among the bulls. Yesterday, NIFTY failed the Bullish Hammer Candlestick Pattern made
on the previous day. Soon after opening on a strong note, triggered by positive
Asian stocks, NIFTY registered its intraday high of 4637.25. However, weakness
in rupee forced foreign institutional investors (FII) to pull out capital from
Asia’s third largest economy, pushing NIFTY below the previous days’ closing
and also below the levels of 4600. After trading in the negative terrain for
most part of trade, Nifty recovered almost 54 points and re-entered the
positive zone. Buying activity in FMCG, OIL & GAS, and PHARMA counters
coupled with positive European cues provided support. Nonetheless, a sudden
selling pressure in index heavyweight, RIL, and CAPITAL GOODS bellwether,
Larsen and Toubro, snapped the uptrend. Heavy Selling pressure was witnessed in
the Broader Market once again, with same cruelty. Stocks were dumped 8-10%. Equities
nosedived in the negative terrain, once again! NIFTY registered fresh intraday
low as well as 28-Months Low of 4531.15. It was free fall for NIFTY in the last
half an hour of trade. It closed at 4544.20 for the day, which was the lowest
closing level since August 2009.
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 (08th
November, 2010) to the 28-Months Low marked 4531.15 by NIFTY (21st December,
2011). Still the investors should wait for fruitful results ahead and stay away
from the markets. With deteriorating International Economic Scenario NIFTY even
breached its important support level of 4650 on closing basis, which was till
now acting as a good support level. It is becoming really tough for NIFTY to
make a proper ground to land on. The level of 4450 will now act as the strong
support level on closing basis for NIFTY, whereas the level of 4720 is the
immediate resistance for NIFTY on Closing Basis. 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, Bank of
Japan will be coming out with its Interest Rate Decision in JAPAN. UK will be coming out with its Public
Sector Net Borrowing for the month of November and Gfk Consumer Confidence for
the month of December. Consumer Confidence for the month of December will be
announced by EUROPEAN MONETARY UNION. US
will be announcing its MBA Mortgage Applications, Existing Home Sales
Change and Existing Home Sales for the month of November.
Weakening Rupee, Deteriorating
European Economy Conditions, Uncertainties in Indian Corporate and Finance
Scenario are acting as major triggers of the massive sell off, which is
resulting in development of Fear among the Indian and International Investors. 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 again trading below all
its moving averages. The 200-Days SMA (Simple Moving Average), 50-Days SMA and
20-Days EMA (Exponential Moving Average) is at 5309.92, 4987.74 and 4815.67,
respectively. The 14-Days RSI (Relative Strength Index) and 26-Days MACD
(Moving Average Convergence and Divergence) are now heading towards the oversold
zone one again.
What does Indicators Say?
2. MACD (26 Days & 12 Days): Their Values are 30.37 and 61.84, respectively. A short term negative crossover is indicated by both the Moving Averages.
3. +DI: 16.31, -DI: 32.65, ADX: 23.42: 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.
Some Trading Stats of the Tuesday’s (20th December, 2011)
Trading Session:
Net Selling of Rs. 526.26 Crore in Cash and of Rs. 355.30 Crore in F&O Segment by FIIs was witnessed on Tuesday’s
Trading Session.
Net Buying of Rs. 2059.97 Crore was witnessed in Others
Segment, whereas, Net Selling of Rs. 36.49 Crore and of Rs. 946.31 Crore was witnessed in Mutual Funds and Proprietory
Trades, respectively.
In F&O Segment Net Buying of Rs. 290.81 Crore and of Rs. 33.19 Crore was witnessed in Index
Futures and Stock Options, respectively, whereas, Net Selling of Rs. 481.85 Crore and of Rs. 197.45 Crore was witnessed in Index Options and Stock Futures, respectively.
NIFTY DEC FUTURE ended at a Premium of 10.30
Points to the Spot NIFTY.
A view on some of the NIFTY 50 Stocks for TOMORROW:
ACC: Can dip to the levels of 1080/1070, if breaches the level
of 1100.
AXISBANK: Can dip to the levels of 800/795, if breaches the level of 820.
BHEL: Can dip to the levels of 223/220, if breaches the level of
228.
BPCL: Can dip to the levels of 490/486, if breaches the level of
500.
DLF: Can dip to the levels of 180/178, if breaches the level of
184.
HCLTECH: Can dip to the levels of 383/379, if breaches the level of 391.
HINDALCO: Can dip to the levels of 116/115.60, if breaches the level of 118.50.
JPASSOCIAT: Can dip to the levels of 51.50/50, if breaches the level of 53.
PNB: Can dip to the levels of 765/760, if breaches the level of
778.
RELIANCE: Can dip to the levels of 695/690, if breaches the level of 710.
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