Afternoon Newspaper : Daily Market Report for Wednesday (November 11, 2009)
Stratstar.com
2009)
Hold Long Positions…
By Dominic Rebello
Review of the Previous day: The Nifty fell marginally on Tuesday
(November 10, 2009) a net 16.70 points (0.34%) and closed at 4881
point level. The market opened up on positive Asian and US cues, but
then turned down and continued so until 01:37 p.m. when it reached its
day low at 4860 points. It then rose and turned into a range bound
movement until closing at the day. The market moved in a range of 88
points. Sentiment seemed bearish and amongst the 50 Nifty stocks, 35
were losers, 14 were gainers and 1 remained unchanged. Selling was
witnessed in telecom, FMCG, realty, select power, technology and auto
stocks while some buying was witnessed in public sector enterprises,
metal, oil & gas and select bank stocks.
Technical Analysis:
Volume: (Qty shares) increased 15.08%. This change is substantial, but
indicates a moderate participation by investors because in the
previous session volumes had decreased by 13%.
Market Breadth: Overall Market Breadth on the NSE was negative.
Amongst all the traded stocks, 565 were gainers, 715 were losers and
42 remained unchanged.
Slow Stochastic Indicator: The Slow Stochastic Oscillator is in the
neutral zone. The Slow K line in the Stochastic Oscillator is above
the slow D line (positive if it continues).
RSI Indicator: The RSI is above the 40 level but is now declining
(negative if it continues).
MACD Indicator: The MACD is below zero but is rising (positive if it
continues). It is below its 9-day Average (negative).
ADX Indicator & DI Lines: The +DI line is below the –DI line but both
lines are converging (positive 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:
Is above its 5-day average (at 4810) Positive.
Is above its 15-day average (at 4859) Positive.
Is below its 25-day average (at 4936) Negative.
Is above its 200-day average (at 3992) Positive.
Overall Market Strength/Weakness: The indicators and oscillators
discussed here are indicating a strong market but with a neutral bias.
Support Levels: For short-term traders the immediate main support is
at 4394 marked as S1 (blue line below the Index).
Resistance Levels: The immediate main resistance is at 5193 marked as
R1 (red line above the Index). The next resistance is at 5580 marked
as R2 (red line above the Index).
Pivot Point Analysis: For intra-day traders the support and resistance
levels are calculated according to the pivot point theory and are:
Pivot point = 4897 (This is the level where the trend is likely to
change during intra-day).
Support (1) = 4845.
Support (2) = 4809.
Resistance (1) = 4933.
Resistance (2) = 4984.
*(For support and resistance levels all F&O stocks refer to the
Afternoon
newspaper)
Outlook for Today: On Japanese candlestick patterns the index after
having formed four consecutive white body candles has formed a doji
pattern. This indicates indecisiveness amongst market men. The next
candle formation will confirm whether the bias is towards the buy or
sell side of the market.
However, the index is above its 5, 15 and 200 day’s moving averages.
Moreover, the velocity parameters are also positively trended. Both
these indicate a positive bias and the possibility of a further up
move unfolding.
Investors are advised to hold long positions.
Work with strict stop losses on all positions.