Afternoon Newspaper : Daily Market Report for Thursday (December 31, 2009)
stratstar
Nifty consolidating at current levels?
By Dominic Rebello
Review of the Previous day: The Nifty fell marginally on Wednesday
(December 30, 2009) a net 18.50 points (0.36%) and closed at the 5169
point level. The market opened up then turned down and continued so
until 11:34 hours when it reached its day low at 5160 points. Then it
rose but fell again on weak European cues and then turned into a range
bound movement until closing at the day. The market moved in a narrow
range of just 37 points. Sentiment was mixed and amongst the 50 Nifty
stocks, 29 were losers, while 21 were gainers. Buying was witnessed in
realty, cement, auto and power stocks, while selling was witnessed in
capital goods, metal, oil & gas exploration and private financial
companies stocks.
Technical Analysis:
Volume: (Qty shares) increased 9.08%. 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, 795 were gainers, 497 were losers and
40 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).
RSI Indicator: The RSI fell and crossed below the 60 level and is now
declining (negative if it continues).
MACD Indicator: 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 flat while
the Market Index is falling. No signal here.
Moving Averages (Trend Indicators)
The index:
Is above its 5-day average (at 5133) Positive.
Is above its 15-day average (at 5089) Positive.
Is above its 25-day average (at 5082) Positive.
Is above its 200-day average (at 4379) 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 4788 marked as S1 (blue line below the Index). The next support is
at 4394 marked as S2 (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 = 5176 (This is the level where the trend is likely to
change during intra-day).
Support (1) = 5154.
Support (2) = 5139.
Resistance (1) = 5191.
Resistance (2) = 5212.
(For support and resistance levels all F&O stocks refer to the
Afternoon
Newspaper or Click here
http://www.stratstar.com/markets/resistance.php?type=Futures)
Outlook for Today: The market seems to be consolidating at current
levels. On Japanese candlestick patterns the index has formed a second
consecutive doji pattern. This 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 is above its 5, 15, 25 and 200 day’s moving
averages and all the averages are positively trended. Moreover, the
velocity parameters also continue to remain positively trended. Both
these indicate the possibility of an up move unfolding.
Incidentally, the index is still struggling below its major resistance
level at the 5193 points level. (The index tested that level intra-
day, yesterday, but could not sustain above it.) There is a
possibility that the index could continue to face some further
resistance there. However, if it crosses above it, then a further
sharp rise can be expected. Investors are advised to hold long
positions.
Work with strict stop losses on all positions.