NSE India: S&P Nifty — Daily Market Report for: Friday (June 15, 2012)
(Based on the activity of the previous trading day) by Dominic Rebello
Review of the Previous day:
The Nifty fell substantially on Thursday (June 14, 2012) a net 66.70 points (1.30%) and closed at the 5054 point level. The market opened down with a gap at the 5105 points level. It then rose sharply into the green but soon declined back into the red and then turned into a range bound movement until 11.25 a.m. It then rose sharply into the green and registered the day’s high at the 5130 points level at 11.46 a.m. and then turned into a range bound movement until 11.53 a.m. It then declined sharply into the red and turned into a range bound movement until 3.05 p.m. It then declined further and registered the day’s low at the 5047 points level at 3.14 p.m. and then turned into a range bound movement until closing at the day. Sentiment was extremely bearish at the rising inflation data reduced the hopes of an aggressive monetary action by the Reserve Bank of India followed by weak European market cues, which dragged the markets further down. All the sectoral indices barring IT and technology closed in the red. Heavy selling was seen in realty, banking, capital goods, power and auto stocks.
Volume (Qty shares) decreased 12.16%. This change is moderate and indicates a moderate participation by investors.
Overall Market Breadth on the NSE was negative. Amongst all the traded stocks, 430 were gainers, 986 were losers and 71 remained unchanged.
Slow Stochastic Indicator:
The Slow Stochastic Oscillator has declined in the over-bought zone. The Slow K line in the Stochastic Oscillator has dropped below the slow D line (negative and a sell signal). However, such signals are considered invalid in the over-bought zone.
The RSI fell and crossed below the 60 level and is now declining (negative if it continues).
The MACD is above zero and is rising (positive if it continues). It is above its 9-day Average (positive).
ADX Indicator & DI Lines:
The +DI line is above the –DI line but both lines are converging (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)
Has crossed below its 5-day average (at 5082) Negative.
Is above its 15-day average (at 4985) Positive.
Is above its 25-day average (at 4948) Positive.
Has crossed below its 200-day average (at 5070) Negative.
Overall Market Strength/Weakness:
The indicators and oscillators discussed here are indicating a strong market but with a negative bias.
For short-term traders the immediate main support is at 4724 marked as S1. The next support is at 4542 marked as S2.
The immediate main resistance is at 5228 marked as R1.
The next resistance is at 5743 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 = 5077 (This is the level where the trend is likely to change during intra-day).
Support (1) = 5025; Support (2) = 4995; Resistance (1) = 5107;
Resistance (2) = 5160.
Outlook for Today
On Japanese candlestick patterns the index after having formed a doji pattern (indicating indecisiveness amongst investors) has formed a black body candle. This is negative and indicates that the bias has shifted towards the sell side of the market. Further, the index has crossed below the 5 and 200 day’s moving averages in a single day. All these indicate a negative bias.
However, the index is above the 15 and 25 day’s moving averages and both the averages are rising. Further, despite the sharp decline, the velocity parameters continue to indicate strength. Both these indicate a positive bias. Investors are advised to hold long positions but with a strict stop loss at the 15-day average at the 4985 point’s level.