NSE India : S&P CNX Nifty — Daily Market Report for:
Monday (August 06, 2012) By Dominic Rebello
Review of the Previous day:
The Nifty fell marginally on Friday (August 03, 2012) a net 12.05 points (0.23%) and closed at the 5215 point level. The market opened down with a gap at the 5195 points level. It then declined further and registered the day’s low at the 5164 points level at 11.28 a.m. It then rose and turned into a range bound movement until 2.44 p.m. The index then rose further and registered the day’s high at the 5220 points level at 3.01 p.m. and then turned into a range bound movement until closing at the day. The Nifty remained below its previous close throughout the session and moved in a range of 56 points. Sentiment was bearish and amongst the 50 Nifty stocks 33 were losers, while 17 were gainers. Buying was seen in oil & gas, healthcare, IT and technology stocks, while selling was seen in metal, auto, banking, realty, FMCG, capital goods, consumer durables and power stocks.
Volume (Qty shares) increased 19.54%. This change is substantial but indicates a moderate participation by investors as volumes had declined substantially in the previous session.
Overall Market Breadth on the NSE was negative. Amongst all the traded stocks, 594 were gainers, 826 were losers and 63 remained unchanged.
Slow Stochastic Indicator:
The Slow Stochastic Oscillator is in the over-bought zone.
The Slow K line in the Stochastic Oscillator is above the slow D line (positive if it continues).
The RSI is above the 40 level but is now declining (negative if it continues).
The MACD is above zero and is rising (positive if it continues). It has crossed above its 9-day Average (positive and a buy signal).
ADX Indicator & DI Lines:
The +DI line is below the –DI line and both lines are diverging (negative if it continues).
The ADX is falling while the Market Index is falling, which indicates that the present down trend is decreasing in strength.
Moving Averages (Trend Indicators) The index:
Has crossed below its 5-day average (at 5222) Negative.
Is above its 15-day average (at 5177) Positive.
Has crossed below its 25-day average (at 5222) Negative.
Is above its 200-day average (at 5106) Positive.
Overall Market Strength/Weakness:
The indicators and oscillators discussed here are indicating a strong market but with a neutral bias.
For short-term traders the immediate main support is at 4926 marked as S1.
The next support is at 4724 marked as S2.
The immediate main resistance is at 5472 marked as R1.
The next resistance is at 5653 marked as R2.
Pivot Point Analysis:
For intra-day traders the support and resistance levels are calculated according to the pivot point theory and are: Pivot point = 5200 (This is the level where the trend is likely to change during intra-day).
Support (1) = 5180.
Support (2) = 5145.
Resistance (1) = 5236.
Resistance (2) = 5256.
OUTLOOK FOR TODAY:
On Japanese candlestick patterns the index has formed a small white body candle with a long lower tail. The long lower tail indicates that the sellers dominated trading and drove prices lower during the session. However by the end of the session, buyers resurfaced and pushed prices back. This indicates that there is strong buying support at lower levels. This candle also indicates that the indecisiveness amongst investors continues. The next candle formation will confirm whether the bias is towards the buy or sell side of the market.
However, the index has crossed below the 5 and 25 day’s moving averages. This is negative. But the index is still above the 15 and 200 day’s moving averages. Further, the 5 day’s moving average is above the 15 day’s moving average and could cross above the 25 day’s moving average in the next session. Moreover, the velocity parameters continue to indicate strength. A buy signal has been generated on the MACD indicator. All these indicate a positive bias and the possibility of an up move unfolding. Investors are advised to hold long positions but with a strict stop loss at the 15-day average at the 5177 point’s level.