Afternoon Newspaper : Daily Market Report for Tuesday (December 30, 2009)

[stockanalytics]

Nifty struggles below 5193 resistance level …

By Dominic Rebello

Review of the Previous day: The Nifty rose marginally on Tuesday
(December 29, 2009) a net 9.55 points (0.18%) and closed at the 5188
point level. The market opened down then turned up and continued so
until 2:44 hours when it reached its day high at 5214 points. Then it
fell and turned into a range bound movement until closing at the day.
The market moved in a narrow range of just 39 points. The Nifty rose
for the fourth consecutive session and closed at a new 2009 high. It
rose above the psychological 5200 points level, for the first time
since May 2008, but could not sustain above it and turned down.
Sentiment was mixed and amongst the 50 Nifty stocks, 27 were gainers,
while 23 were losers. Heavy buying was witnessed in power, telecom,
banking and metal stocks, while selling was witnessed in pharma and
technology stocks

Technical Analysis:

Volume: (Qty shares) decreased 17.88%. This change is substantial and
indicates a less than full participation by investors.

Market Breadth: Overall Market Breadth on the NSE was positive.
Amongst all the traded stocks, 857 were gainers, 433 were losers and
41 remained unchanged.

Slow Stochastic Indicator: The Slow Stochastic Oscillator has risen
and has entered 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 is above the 60 level and has now turned flat
(positive if it rises).

MACD Indicator: The MACD is above zero and is rising (positive if it
continues). It has crossed above its 9-day Average (positive and a buy
signal).

ADX Indicator & DI Lines: The +DI line is above the –DI line and both
lines are diverging (positive if it continues). The ADX is flat while
the Market Index is flat. No signal here.

Moving Averages (Trend Indicators)

The index:

Is above its 5-day average (at 5089) Positive.

Is above its 15-day average (at 5082) Positive.

Is above its 25-day average (at 5080) Positive.

Is above its 200-day average (at 4366) 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 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 = 5193 (This is the level where the trend is likely to
change during intra-day).
Support (1) = 5171.
Support (2) = 5154.
Resistance (1) = 5210.
Resistance (2) = 5232.

(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 three consecutive white body candles has formed a doji
pattern. This indicates indecisiveness amongst investors. The next
candle formation will confirm whether the bias is towards the buy or
sell side of the market.
However, the 5 days moving average has risen above the 15 and 25 days
moving average. This is positive and a buy signal. Further, 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. All these indicate a
positive bias and the possibility of a further up move unfolding.
Incidentally, the index is struggling below a 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 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.