Nifty Outlook for 13th February 2012

On Friday, NIFTY made a High Wave Candlestick Pattern, which shows that there is a great amount of indecision in the market. The pattern implies a loss of sense of direction and that there is a great amount of indecision in the market. A confirmation to this candlestick pattern is definitely required in the form of an opposite move to the prior trade on the next trading day in order to judge that a reversal may be starting. NIFTY opened flat with a negative bias of almost 12 points. After starting off in red, the market moved in the positive terrain within minutes of opening. NIFTY marked an intraday high of 5427.75 just before the announcement of IIP (Index of Industrial Production) Data for the month of December. Pace of Growth slowed to 1.8% from 5.9% in November 2011. The Index of Industrial Production (IIP) recorded a sluggish 1.8% growth in December 2011, considerably weaker than the 8.2% growth in December 2010. However, the market oscillated between red and green terrains, but gradually slipped in the negative zone after the release of disappointing IIP numbers for the month of December. NIFTY marked a low of 5341.05 for the day (almost 86 points down from the day’s high level). The market remained negative throughout the afternoon session and picked up pace only in the last hour of trade, albeit in the red. METAL Sector was the top Gainer of the day, while REALTY & INFRA Sector was the biggest loser for the day. Finally, NIFTY ended at 5381.60 for the day, struggling a lot with the levels of 5400 on the closing basis.  

Technically, as mentioned earlier, “The 20-Days EMA is on the verge of crossing the 200-Days SMA, which will result in a Positive Moving average Crossover (The Shorter Term Moving Average crossing the Longer Term Moving Average from downside). This crossover may lead NIFTY to more heights in forthcoming trading sessions”. The 20-Days EMA has crossed the 200-Days SMA from downside, but NIFTY is facing a resistance of the level of 5400 on the closing basis. 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 5433.52 (31.80% Level of Retracement) is the next resistance level to be tested by NIFTY. The levels of 5220.56 (50.00% Level of Retracement) will now act as the immediate Support Level for NIFTY.

On the Economic Front, CHINA will be coming out with its FDI – Foreign Direct Investment. Wholesale Price Index for the month of January will be announced in GERMANY.

Q3 FY12 Results Season has commenced in India. Some of the important results to be announced tomorrow are of ANSAL PROP, ARVIND, BOMDYEING, CASTROL, CESC, CIPLA, COALINDIA, ENGINERSIN, ESSEL PROPACK, GUJNRECOKE, HIMACHAL FUTURISTIC, INDIA SEC, IOC, JAICORP, LITL, MERCATOR, MONSANTO INDIA, MOTHERSUMI, PARSVNATH, PUNJLLOYD, RELMEDIA, RPOWER, SAIL, SBIN, RENUKA, SRF, SUNPHARMA, UBHOLDINGS and WOCKHARDT.

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 5185.61, 4928.47 and 5178.24, 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 71.58 and 72.04, respectively. The indicator is moving towards ovebought zone from the oversold zone. 

2. MACD (26 Days & 12 Days): Their Values are 200.29 and 183.18, respectively. A short term positive crossover is indicated by both the Moving Averages.

3. +DI: 35.27, -DI: 10.23, ADX: 34.61: The Positive Directional Index has gained strength over the Negative Directional Index and the Average Directional Index is above 20, indicates that the trend of the market is strengthening. 

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 5185.61, 4928.47 and 5178.24, respectively on the closing basis.

Some Trading Stats of the Friday’s (10^th February, 2012) Trading Session:

Net Buying of Rs. 196.12 Crore in Cash while Net Selling of Rs. 1066.19 Crore in F&O Segment by FIIs was witnessed on Friday’s Trading Session.

In F&O Segment Net Selling of Rs. 1366.00 Crore and of Rs. 436.25 Crore was witnessed in Index Futures and Stock Futures, respectively, whereas, Net Buying of Rs. 724.04 Crore and of Rs. 12.01 Crore was witnessed in Index Options and Stock Options, respectively.  

NIFTY FEB FUTURE ended at a Premium of 16.05 Points to the Spot NIFTY.

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

ACC:                Can dip to the levels of 1310/1300, if breaches the level of 1335.

AMBUJACEM:    Can dip to the levels of 168/166, if breaches the level of 171.

IDFC:               Can dip to the levels of 130/128, if breaches the level of 133.

JPASSOCIAT:    Can dip to the levels of 75/74.50, if breaches the level of 76.40.

MARUTI:           Can dip to the levels of 1225/1215, if breaches the level of 1240.

For the day, intraday resistance for NIFTY comes at 5420 / 5450 / 5480 levels. At the same time, 5380 / 5350 / 5320 will act as major intraday support levels.