The Afternoon Newspaper : Daily Market Report for Monday (January 04, 2010)
stockanalytics
By Dominic Rebello
Review of the Previous day: The Nifty rose moderately on Thursday
(December 31, 2009) a net 31.60 points (0.61%) and closed at the 5201
point level. The market opened up and continued so until 1:10 p.m.
when it reached its day high at 5221 points. Then it turned into a
range bound movement until closing at the day. The market moved in a
range of 53 points. Incidentally, the Nifty closed above the 5,200
psychological mark for the first time since May 2, 08. Sentiment was
bullish and amongst the 50 Nifty stocks, 35 were gainers, while 15
were losers. Buying was witnessed in oil & gas, power, capital goods,
and select auto, banking & technology stocks, while selling was
witnessed in pharma & realty stocks.
Technical Analysis:
Volume: (Qty shares) increased 24.69%. This change is substantial and
indicates a wide participation by investors.
Market Breadth: Overall Market Breadth on the NSE was positive.
Amongst all the traded stocks, 708 were gainers, 583 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 has
dropped below the slow D line (negative sell signal if it continues).
(However, these signals are generally 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 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 and both
lines are diverging (positive if it continues). The ADX is flat while
the Market Index is rising. No signal here.
Moving Averages (Trend Indicators)
The index:
Is above its 5-day average (at 5176) Positive.
Is above its 15-day average (at 5092) Positive.
Is above its 25-day average (at 5087) Positive.
Is above its 200-day average (at 4392) 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 = 5197 (This is the level where the trend is likely to
change during intra-day).
Support (1) = 5173.
Support (2) = 5144.
Resistance (1) = 5226.
Resistance (2) = 5250.
(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 small white body candle on
substantially (24%) higher volumes. This indicates that the bias has
shifted towards the buy side of the market.
Further, the index has risen above a major resistance level at the
5193 points level. Moreover, the index also continues to remain above
its 5, 15, 25 and 200 day’s moving averages and all the averages are
positively trended. The velocity parameters also continue to remain
positively trended. All these indicate the possibility of a further up
move unfolding.
Work with strict stop losses on all positions.