Nifty Outlook for 16th February 2012

Yesterday, NIFTY made a White Opening Marubozu Candlestick Pattern, which shows it was a typical bull day and strength of the bulls is enough to cause some concern among the bears. The formation of this Candlestick Pattern may be the first part of a bullish continuation pattern but it may also be interpreted as a bearish reversal pattern. NIFTY registered a robust Gap Up Opening of almost 45 points triggered by strong dollar inflows from foreign institutional investors (FIIs) and positive global cues. It opened above the levels of 5450 and kept on trading above it for whole of the session without a jerk even. For the day, it marked a high of 5542.10 (almost 81 points higher from the opening level and almost 125 points higher from the previous day’s closing level). It very swiftly crossed the physiological important level of 5500. REALTY & INFRA, POWER, BANKING & FINANCE, AUTO and CONSUMER DURABLES Sectors were the top Gainers of the day, pulling NIFTY higher and higher, while OIL & GAS Sector was the lone loser for the day. Finally, NIFTY ended at 5531.95 for the day, marking a close above the important levels of 5520. It was 6-months High closing for the NIFTY after marking a 28-Months Low in December 2011. 

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. Two – three consecutive closing above the levels of 5440, may lead NIFTY to the levels of 5550/5650 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 5433.52 (31.80% Level of Retracement) is the next resistance level to be tested by NIFTY. Yesterday, NIFTY crossed this level by marking a Gap Up Opening above it and it even closed above it at 5531.95. If NIFTY manages to close above it again for two-three consecutive sessions, it may move to the levels of 5646.49 (23.60% Level of Retracement). The levels of 5220.56 (50.00% Level of Retracement) will now act as the immediate Support Level for NIFTY.

On the Economic Front, U.K. will be coming out with its Nationwide Consumer Confidence. Building Permits, Housing Starts, Producer Price Index for the month of January, Philadelphia Fed Manufacturing Survey for the month of February, Initial Jobless Claims and Continuing Jobless Claims will be announced in U.S.

Q3 FY12 Results Season has commenced all over the Globe. Some of the important results to be announced tomorrow in INDIA are of GLAXO, RECLTD and THOMASCOOK. RENAULT SA will be announcing its quarterly results in FRANCE. GENERAL MOTORS CO will be announcing its 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 5254.40, 4952.19 and 5173.09, 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 77.99 and 73.42, respectively. The indicator is moving towards ovebought zone from the oversold zone. 

2. MACD (26 Days & 12 Days): Their Values are 193.73 and 187.44, respectively. A short term positive crossover is indicated by both the Moving Averages.

3. +DI: 38.69, -DI: 8.12, ADX: 39.46: 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 5254.40, 4952.19 and 5173.09, respectively on the closing basis. 

Some Trading Stats of the Wednesday’s (15^th February, 2012) Trading Session:

Net Buying of Rs. 1838.85 Crore in Cash and of Rs. 1650.72 Crore in F&O Segment by FIIs was witnessed on Wednesday’s Trading Session.

In F&O Segment Net Selling of Rs. 506.19 Crore and of Rs. 36.36 Crore was witnessed in Stock Futures and Stock Options, respectively, whereas, Net Buying of Rs. 770.19 Crore and of Rs. 1423.08 Crore was witnessed in Index Futures and Index Options, respectively.  

NIFTY FEB FUTURE ended at a Premium of 20.60 Points to the Spot NIFTY.

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

ACC:                Can touch the levels of 1390/1400, if crosses the level of 1375.

BHEL:               Can touch the levels of 284/286, if crosses the level of 278.

GAIL:               Can touch the levels of 405/407, if crosses the level of 398.

HDFC:              Can touch the levels of 730/732, if crosses the level of 715.

JPASSOCIAT: Can touch the levels of 87.80/89.20, if crosses the level of 86.20.

M&M:               Can touch the levels of 750/755, if crosses the level of 735.

PNB:                Can touch the levels of 1070/1080, if crosses the level of 1055.

RCOM:         Can touch the levels of 107.50/108.20, if crosses the level of 105.

STER:               Can touch the levels of 138/140, if crosses the level of 135.

For the day, intraday resistance for NIFTY comes at 5550 / 5580 / 5620 levels. At the same time, 5480 / 5450 / 5420 will act as major intraday support levels.