NSE India: S&P Nifty — Daily Market Report for: Wednesday (June 13, 2012)
(Based on the activity of the previous trading day) by Dominic Rebello
Review of the Previous day:
The Nifty rose substantially on Tuesday (June 12, 2012) a net 61.80 points (1.22%) and closed at the 5115 point level. The market opened down with a gap at the 5015 points level and that level itself was the low the session. It then rose and turned into a range bound movement until 11.10 a.m. It then rose sharply into the green and turned into a range bound movement until 2.15 p.m. It then rose further and registered the day’s high at the 5128 points level at 3.09 p.m. and then turned into a range bound movement until closing at the day. The market rose sharply in late trade on the hopes of a repo rate cut by the RBI at its policy meet on 18th June. Sentiment was bullish and amongst the 50 Nifty stocks 39 were gainers, while 11 were losers. All the sectoral indices barring healthcare closed in the green. Heavy buying was seen in realty, banking, capital goods, auto and consumer durables stocks.
Technical Analysis:
Volume:
Volume (Qty shares) decreased 13.80%. This change is moderate and indicates a moderate participation by investors.
Market Breadth:
Overall Market Breadth on the NSE was positive. Amongst all the traded stocks, 759 were gainers, 644 were losers and 90 remained unchanged.
Slow Stochastic Indicator:
The Slow Stochastic Oscillator has risen 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.
RSI Indicator:
The RSI rose and crossed above the 60 level and is now rising (positive if it continues).
MACD Indicator:
The MACD is below zero but 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 rising, which indicates that the present up trend is decreasing in strength.
Moving Averages (Trend Indicators)
The index:
Is above its 5-day average (at 5056) Positive.
Is above its 15-day average (at 4957) Positive.
Is above its 25-day average (at 4938) Positive.
Has crossed above its 200-day average (at 5067) Positive.
Overall Market Strength/Weakness:
The indicators and oscillators discussed here are indicating a strong market with a positive bias.
Support Levels:
For short-term traders the immediate main support is at 4724 marked as S1.
The next support is at 4542 marked as S2.
Resistance Levels
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 = 5087 (This is the level where the trend is likely to change during intra-day).
Support (1) = 5045.
Support (2) = 4973.
Resistance (1) = 5158.
Resistance (2) = 5200.
Outlook for Today:
On Japanese candlestick patterns the index has formed a long white body candle. In fact, yesterday's candle is almost like a white body Marubozu candle. (A White Marubozu forms when the open equals the low and the close equals the high). This is positive.
Further, the index has crossed above the 200 day’s moving average. The index is now above the 5, 15, 25 and 200 day’s moving averages and all the four averages are rising. Moreover, the velocity parameters continue to indicate strength. All these indicate a positive bias and the possibility of a further up move unfolding. Investors are advised to hold long positions.