Nifty Outlook for 02nd March 2012

Yesterday, NIFTY made a Small Black Candlestick Pattern, with a longer lower shadow, showing NIFTY recovered from the day’s low but the closing could not match up with the day’s high levels. Markets registered the day’s high levels with the opening itself. NIFTY marked a high of 5366 for the day and reverted right from that level. It slipped almost 30 points from the day’s high level and then traded range bound till late afternoon session. Triggered by weak opening on the European markets, the markets slipped further in red and NIFTY registered its intraday low of 5297.50, but maintained well above the crucial support levels of 5280. Later, though the gauges managed to recover some of the losses, they however, remained below the previous days’ closing level till the closing bell. It was a very volatile trading session for the day, providing excellent opportunities for swing traders to earn on both the sides. PHARMA Sectors was the lone Gainer of the day, while REALTY & INFRA, CAPITAL GOODS, BANKING & FINANCE and METAL Sectors were the biggest losers for the day, pulling NIFTY lower for he day. Finally, NIFTY ended at 5339.75 for the day.

Technically, 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). NIFTY made a high of 5629.95 on 22^nd February, 2012 and tried to touch the levels of 5646.49 (23.60% Level of Retracement). This level acted as a very strong resistance for NIFTY on the closing basis, and it reverted swiftly from that level and is now the levels of 5433.52 (38.20% Level of Retracement).   Now, again 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, from which the rally gained further strength of almost 400 points. NIFTY is now sticking to the levels of its 20-Days EMA, which is acting as a good resistance for it right now on closing basis. It closed below this level yesterday. Now, if the level of 5280 is breached on closing basis, 5200/5150 levels are on the cards. The 200-Days SMA is also quoting at the same levels of 5168.03.

On the Economic Front, GERMANY will be coming out with its Retail Sales for the month of January. Halifax House Prices and PMI Construction for the month of February will be announced in U.K. EUROPEAN MONETARY UNION will be coming out with its Producer Price Index for the month of January.

Traders are suggested to trade cautiously by following Strict Stop Losses and Booking Fast Profits, whereas, Investors are suggested to hold their positions if they have invested for long term in this rally, the short term and medium term investments can be booked in profits. New Investment at this point of time in the markets should again be avoided.

NIFTY closed below its 20-Days EMA (Exponential Moving Average) of 5362.90, on the other hand, it is still trading above its 50-Days SMA (Simple Moving Average) and 200-Days SMA of 5094.31 and 5168.03, respectively on the closing basis. The 14-Days RSI (Relative Strength Index) and 26-Days MACD (Moving Average Convergence and Divergence) are now reverting from their overbought zone.

What does Indicators Say?  

                                        

1. RSI (14 Days & 9 Days): The values are 51.61 and 59.70, respectively. The indicator is now reverting from its ovebought zone. 

2. MACD (26 Days & 12 Days): Their Values are 95.79 and 141.20, respectively. The indicator is now reverting from its ovebought zone.  

3. +DI: 24.72, -DI: 24.31, ADX: 33.43: The Positive Directional Index and the Negative Directional Index are trading almost at the same levels indicating a tussle between the Bulls and the Bears, 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 closed below its 20-Days EMA (Exponential Moving Average) of 5362.90, on the other hand, it is still trading above its 50-Days SMA (Simple Moving Average) and 200-Days SMA of 5094.31 and 5168.03, respectively on the closing basis.

Some Trading Stats of the Thursday’s (01^st March, 2012) Trading Session:

Net Selling of Rs. 126.52 Crore in Cash and of Rs. 566.16 Crore in F&O Segment by FIIs was witnessed on Thursday’s Trading Session.

In F&O Segment Net Selling of Rs. 351.60 Crore, of Rs. 519.83 Crore and of Rs. 29.23 Crore was witnessed in Index Futures, Stock Futures and Stock Options, respectively, whereas, Net Buying of Rs. 334.49 Crore was witnessed in Index Options.  

NIFTY MAR FUTURE ended at a Premium of 51.00 Points to the Spot NIFTY.

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

MARUTI:         Can touch the levels of 1345/1355, if crosses the level of 1320.

DLF:                 Can dip to the levels of 210/208, if breaches the level of 214.

M&M:               Can dip to the levels of 668/662, if breaches the level of 681.

ONGC:              Can dip to the levels of 282/280, if breaches the level of 288.

For the day, intraday resistance for NIFTY comes at 5350 / 5380 / 5420 levels. At the same time, 5320 / 5280 / 5250 will act as major intraday support levels.