Nifty Outlook for 05th January 2012

Yesterday, NIFTY made a Short Black Candlestick Pattern. Market started off trade on a positive note, but within seconds slipped in the negative terrain. Thereafter, it witnessed an extremely volatile session and formed major crests and troughs on the day before yesterday’s closing. Amid the volatility, NIFTY rose to 4782.85 during late afternoon session, but could not cross or even touch the level of 4800 and it slipped back in red with equal thrust and hit the bottom. NIFTY registered the day’s high at 4782.85 and fell as low as 4728.85, but did not breach the level of 4720. AUTO and CONSUMER DURABLES were the biggest duds, whereas, PSU and CAPITAL GOODS Sectors were the Star Performers for the day. Finally, NIFTY ended flattish at 4749.65.

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 crossed its 20-Days EMA yesterday, on the closing basis, but it is still trading below its 50-Days SMA. 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). 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 4550 will now act as the strong support level on closing basis for NIFTY, whereas the level of 4850 is the immediate resistance for NIFTY on Closing Basis, so that Investors can be allowed to enter into the markets. 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, GERMANY will be coming out with its Retail Sales for the month of November. Halifax House Prices and Purchasing Manager Index Services for the month of December will be announced in UK. EUROPEAN MONETARY UNION will be coming out with Industrial New Orders for the month of October and Producer Price Index for the month of November. Initial Jobless Claims, Continuing Jobless Claims, ADP Employment Change and ISM Non-Manufacturing for the month of December will be announced in US.  

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 has crossed its 20-Days EMA (Exponential Moving Average) of 4743.50 on closing basis, but it is still trading below its 200-Days SMA (Simple Moving Average) and 50-Days SMA of 5267.08 and 4917.91, 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?

                                     

1. RSI (14 Days & 9 Days): The values are 48.41 and 43.97, respectively. The indicator is moving towards oversold zone from the overbought zone. 

2. MACD (26 Days & 12 Days): Their Values are 82.40 and 86.85, respectively. A short term negative crossover is indicated by both the Moving Averages.

3. +DI: 24.19, -DI: 24.33, ADX: 17.28: 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 has crossed its 20-Days EMA on the closing basis yesterday, but it is still trading below its 200-Days SMA and 50-Days SMA on closing basis. These indicators are at the levels of 5267.08, 4917.91 and 4743.50, respectively. 

Some Trading Stats of the Wednesday’s (04^th January, 2012) Trading Session:

Net Buying of Rs. 138.97 Crore in Cash and of Rs. 252.90 Crore in F&O Segment by FIIs was witnessed on Wednesday’s Trading Session.

Net Selling of Rs. 253.53 Crore and of Rs. 1080.21 Crore was witnessed in Proprietory Trades and Others Segment, respectively, whereas, Net Buying of Rs. 168.47 Crore was witnessed in Mutual Funds.

In F&O Segment Net Buying of Rs. 332.62 Crore, of Rs. 52.46 Crore and of Rs. 16.78 Crore was witnessed in Index Options, Stock Futures and Stock Options, respectively, whereas, Net Selling of Rs. 148.95 Crore was witnessed in Index Futures.

NIFTY JAN FUTURE ended at a Premium of 10.55 Points to the Spot NIFTY.

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

ICICIBANK:        Can touch the levels of 762/770, if crosses the level of 745

ONGC:              Can touch the levels of 272/275, if crosses the level of 267

RANBAXY:        Can touch the levels of 445/448, if crosses the level of 437.

ACC:                Can dip to the levels of 1080/1070, if breaches the level of 1100.

AMBUJACEM:    Can dip to the levels of 147/146, if breaches the level of 150.

HINDUNILVR:     Can dip to the levels of 389/387, if breaches the level of 395.

Pre Market Calls:

SRTRANSFIN: Buy ONLY IF IT TRADES ABOVE 450 for the TARGETS of 460/465, with the STRICT SL of 444.

EXIDEIND: Buy ONLY IF IT TRADES ABOVE 113 for the TARGETS of 115/116, with the STRICT SL of 111.50.

For the day, intraday resistance for NIFTY comes at 4780 / 4820 / 4850 levels. At the same time, 4720 / 4680 / 4650 will act as major intraday support levels.