Afternoon Newspaper : Daily Market Report for Monday (December 21, 2009)
Stratstar
21, 2009)
Correction could continue…
By Dominic Rebello
Review of the Previous day: The Nifty fell substantially on Friday
(December 18, 2009) a net 54.05 points (1.07%) and closed at 4987
point level. The market opened down then turned up and continued so
until 1:30 p.m. when it reached its day high at 5043 points. Then it
fell and turned into a range bound movement until closing near the day
low. The market moved in a range of 64 points. The Nifty closed below
the psychological 5,000 mark for the first time in the last 15
sessions. Sentiment was bearish and amongst the 50 Nifty stocks, 40
were losers, while just 10 were gainers. Heavy selling was witnessed
across all the sectors barring pharma and auto. Realty, oil & gas,
banking and FMCG were amongst the worst hit sectors.
Technical Analysis:
Volume: (Qty shares) decreased 1.66%. This change is small and
indicates a moderate participation by investors.
Market Breadth:Overall Market Breadth on the NSE was negative. Amongst
all the traded stocks, 415 were gainers, 865 were losers and 48
remained unchanged.
Slow Stochastic Indicator:The Slow Stochastic Oscillator is in the
neutral zone. The Slow K line in the Stochastic Oscillator is below
the slow D line (negative 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 above zero but is declining (negative if it
continues). It is below its 9-day Average (negative).
ADX Indicator & DI Lines: The +DI line is below the –DI line and both
lines are diverging (negative if it continues).The ADX is rising while
the Market Index is falling, which indicates that the present down
trend is increasing in strength.
Moving Averages (Trend Indicators)
The index:
Is below its 5-day average (at 5042) Negative.
Is below its 15-day average (at 5087) Negative.
Is below its 25-day average (at 5070) Negative.
Is above its 200-day average (at 4307) Positive.
Overall Market Strength/Weakness:
The indicators and oscillators discussed here are indicating a weak
market with a negative 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 = 5003 (This is the level where the trend is likely to
change during intra-day).
Support (1) = 4963.
Support (2) = 4939.
Resistance (1) = 5028.
Resistance (2) = 5068.
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: On Japanese candlestick patterns the index after
having formed two consecutive doji patterns (indicating indecisiveness
amongst investors) has formed a long black body candle. In fact, this
candle is almost like a Black Marubozu candle. (A Black Marubozu forms
when the open equals the high and the close equals the low). This is
negative and indicates that the bias has shifted towards the sell side
of the market.
Further, the index continues to remain below its 5, 15 and 25 days
moving averages. Moreover, the velocity parameters are also negatively
trended. All these indicate a negative bias and the possibility of a
further decline unfolding.
Investors are advised to avoid buying at current levels.
Work with strict stop losses on all positions.