Nifty Outlook for 01st February 2012

Yesterday, NIFTY made a Long White Candlestick Pattern with a Gap Up. NIFTY witnessed a Gap Up Opening of almost 38 points owing to positive Asian cues.  The positive trend continued though in a narrow range until the last trading. A set of good numbers, coupled positive global cues helped indices surge past the band. NIFTY marked an intraday low of 5120.15, but remained strong above the levels of 5120, while it marked a high of 5215.40. In the last hour of trading session, NIFTY reverted form the day’s low level and rushed higher to touch the levels of 5200, supported by positive move of European Markets. BANKING & FINANCE Sector was the robust player of the day, inching NIFTY higher. Finally, NIFTY ended at 5199.25 for the day, just below the levels of 5200.  

Technically, a Negative Crossover between 200-Days SMA (Simple Moving Average) and 50-Days SMA is still intact. The level of 200-Days SMA also acts as a very good resistance for NIFTY on the closing basis right now. Yesterday, NIFTY crossed this level on the closing basis too. A Fibonnaci Retracement Level is being drawn from the High of 6338.50 (08^th November, 2010) to the 28-Months Low marked 4531.15 by NIFTY (21^st December, 2011). Now, the level of 5220.56 (50.00% Level of Retracement) is the next resistance level to be tested by NIFTY. The levels of 4957.07 (61.80% Level of Retracement) will now act as the immediate Support Level for NIFTY. NIFTY has now crossed all the resistance levels and also closed above the level of 5200. It may witness a pause at the level of 5220 to move ahead for the levels of 5300/5440 or may also revert from this level to 5050/4950. 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, CHINA will be coming out with its NBS Manufacturing PMI and HSBC Manufacturing PMI for the month of January. Labor Cash Earnings for the month of December and Monetary Base for the month of January will be announced in JAPAN. U.K. will be coming out with its Nationwide Housing Prices and Purchasing Manager Index Manufacturing for the month of January; Purchasing Manager Index Manufacturing for the month of January will be announced in GERMANY. EUROPEAN MONETARY UNION will be announcing its Purchasing Manager Index Manufacturing and Consumer Price Index for the month of January. MBA Mortgage Applications, Construction Spending for the month of December, ADP Employment Change, ISM Manufacturing, ISM Prices Paid and Total Vehicle Sales for the month of January will be announced in U.S.

Q3 FY12 Results Season has commenced in India. Some of the important results to be announced tomorrow are of ASHOKLEY, FINOLEX CABLES, SATYAMCOMP, TUBE INVEST, UCOBANK and WELCORP. WHIRLPOOL CORP, HERSHEY CO, HAWKINS INC, TUPPERWARE BRANDS CORP, and ELECTRONIC ARTS INC will be announcing their quarterly results in U.S.

Traders are suggested to trade cautiously by following Strict Stop Losses and Booking Fast Profits, whereas, Investors are suggested to take advantage of this short term move, which may pay off excellent returns.

NIFTY has crossed its 20-Days EMA (Exponential Moving Average), 50-Days SMA (Simple Moving Average) and also 200-Days SMA of 48342.87, 4987.22 and 5198.21, respectively on the closing basis. The 14-Days RSI (Relative Strength Index) and 26-Days MACD (Moving Average Convergence and Divergence) are now heading towards the overbought zone.

What does Indicators Say?

                                         

1. RSI (14 Days & 9 Days): The values are 68.23 and 67.21, respectively. The indicator is moving towards ovebought zone from the oversold zone. 

2. MACD (26 Days & 12 Days): Their Values are 162.75 and 117.26, respectively. A short term positive crossover is indicated by both the Moving Averages.

3. +DI: 36.58, -DI: 18.36, ADX: 22.60: The Positive Directional Index has gained strength over the Negative 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 has crossed its 20-Days EMA (Exponential Moving Average), 50-Days SMA (Simple Moving Average) and also 200-Days SMA of 48342.87, 4987.22 and 5198.21, respectively on the closing basis.

Some Trading Stats of the Tuesday’s (31^st January, 2012) Trading Session:

Net Buying of Rs. 624.10 Crore in Cash and of Rs. 777.26 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.

In F&O Segment Net Buying of Rs. 382.54 Crore and of Rs. 433.91 Crore was witnessed in Index Futures and Index Options, respectively, whereas, Net Selling of Rs. 26.33 Crore and of Rs. 12.86 Crore was witnessed in Stock Futures and Stock Options, respectively.  

NIFTY FEB FUTURE ended at a Premium of 24.10 Points to the Spot NIFTY.

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

ACC:                Can touch the levels of 1220/1230, if breaches the level of 1195.

AXISBANK:        Can touch the levels of 1100/1110, if breaches the level of 1080.

BAJAJ-AUTO:   Can touch the levels of 1625/1635, if breaches the level of 1605.

HCLTECH:         Can touch the levels of 445/448, if breaches the level of 438.

HINDALCO:       Can touch the levels of 151.20/152.60, if breaches the level of 147.50.

RCOM:              Can touch the levels of 101.80/102.50, if breaches the level of 99.80.

COALINDIA:      Can dip to the levels of 320/318, if breaches the level of 326.

Pre Market Call:

HEXAWARE: Buy ONLY IF IT TRADES ABOVE 85 for the TARGETS of 87/89, with the STRICT SL of 83.80. 

For the day, intraday resistance for NIFTY comes at 5220 / 5250 / 5280 levels. At the same time, 5180 / 5150 / 5120 will act as major intraday support levels.