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Hold Long Positions

Monday, March 09, 2015

NSE India : CNX Nifty — Daily Market Report for: Monday (March 9, 2015) By Dominic Rebello

Review of the Previous day:
The Nifty rose marginally on Thursday (March 05, 2015) a net 15.10 points (0.17%) and closed at the 8937 point level. The market opened up with a gap at the 8929 points level. It then turned into a range bound movement until 11.50 a.m. The index then sharply into the red and registered the day’s low at the 8849 points level at 1.16 p.m. It then rose sharply into the green and registered the day’s high at the 8957 points level at 3.14 p.m. and then turned into a range bound movement until closing at the day. The Nifty witnessed a volatile session and moved in a range of 108 points. Sentiment was bearish and amongst the 50 Nifty stocks 30 were losers, while 20 stocks closed in the green. Substantial buying was witnessed in healthcare and FMCG stocks, while substantial selling was witnessed in metal stocks.

Technical Analysis:
Volume (Qty shares) decreased 29.27%. This change is substantial and indicates a less than full participation by investors.

Market Breadth: Overall Market Breadth on the NSE was neutral. Amongst all the traded stocks, 711 were gainers, 742 were losers and 38 remained unchanged.

Slow Stochastic Indicator: The Slow Stochastic Oscillator has declined and has exited the over-bought zone.
The Slow K line in the Stochastic Oscillator is below the slow D line (negative if it continues).

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 but both lines are converging (negative if it continues).
The ADX is rising while the Market Index is rising, which indicates that the present up trend is increasing in strength.

Moving Averages (Trend Indicators)
The index:
Is below its 5-day average (at 8943) Negative.
Is above its 15-day average (at 8849) Positive.
Is above its 25-day average (at 8785) Positive.
Is above its 200-day average (at 8069) Positive.
All the four averages are positively trended. 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 the 8608 points level.
The next support is at the 8509 points level.

Resistance Levels: The immediate main resistance is at the 8989 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 = 8915 (This is the level where the trend is likely to change during intra-day).
Support (1) = 8872.        Support (2) = 8807.
Resistance (1) = 8980.   Resistance (2) = 9023.

Outlook for Today:
On Japanese candlestick patterns the index 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 index is below its 5 day moving average. This is negative.

But, the index is still above its 15, 25 and 200 day moving averages and all the averages are rising and also positively trended. Further, the velocity parameters indicate strength. All these indicate a positive bias and the possibility of a further up move unfolding. Investors are advised to hold long positions but with a strict stop loss at the 15-day average at the 8849 point’s level.

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