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Hold Long Positions

Monday, January 05, 2015

NSE India : CNX Nifty — Daily Market Report for: Monday (January 5, 2015) By Dominic Rebello

Review of the Previous day:
The Nifty rose substantially on Friday (January 02, 2015) a net 111.45 points (1.35%) and closed at the 8395 point level. The market up with a gap at the 8288 points level and that level itself was the low of the session. It then rose sharply and turned into a range bound movement until 1.45 p.m. The index then rose sharply and registered the day’s high at the 8410 points level at 2.06 p.m. and then turned into a range bound movement until closing at the day. The Nifty remained above its previous close throughout the session, moved in a range of 122 points and closed just below the psychological important 8400 points level. Sentiment was bullish and amongst the 50 Nifty stocks 43 were gainers, while just 7 stocks closed in the red. All the sectoral indices closed in the green. Substantial buying was witnessed in capital goods and banking stocks.

Technical Analysis:
Volume:
Volume (Qty shares) increased 42.37%. 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, 1015 were gainers, 474 were losers and 35 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 40 level and is now rising (positive if it continues).

MACD Indicator: The MACD is below zero but is now rising (positive). 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 8291) Positive.
Is above its 15-day average (at 8223) Positive.
Is below its 25-day average (at 8323) Negative.
Is above its 200-day average (at 7641) 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 the 7909 points level.
The next support is at the 7831 points level.

Resistance Levels: The immediate main resistance is at the 8334 points level.
The next resistance is at the 8581 points level.

Pivot Point Analysis: For intra-day traders the support and resistance levels are calculated according to the pivot point theory and are:
Pivot point = 8365 (This is the level where the trend is likely to change during intra-day).
Support (1) = 8319.       Support (2) = 8243.
Resistance (1) = 8441.  Resistance (2) = 8487.

Outlook for Today:
On Japanese candlestick patterns the index after having formed a doji pattern (indicating indecisiveness amongst investors) has formed a small white body candle on substantially higher volumes. In fact, yesterday's candle is almost like a white body Marubozu candle.  (A White Marubozu forms when the open equals the low and the close equals the high). Moreover, the body of this candle is above and outside the body of the previous candle indicating a range expansion and acceleration. This is positive and indicates that the bias has shifted towards the buy side of the market.

Further, the index has crossed above its 25 days moving average. The index is now above its 5, 15, 25 and 200 days moving averages. Moreover, the velocity parameters too indicate strength. All these indicate a positive bias and the possibility of a further up move unfolding. Investors are advised to hold long positions

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