NSE India: S&P Nifty — Daily Market Report for: Friday (March 9, 2012) (Based on the activity of the previous trading day) by Dominic Rebello
Review of the Previous day:
The Nifty fell marginally on Wednesday (March 07, 2012) a net 1.95 points (0.04%) and closed at the 5220 point level. The market opened down with a gap at the 5207 points level. It then turned into a range bound movement until 10.35 a.m. It then rose sharply into the green and registered the day’s high at the 5243 points level at 11.27 a.m. The index then declined into the red and turned into a range bound movement until 2.00 p.m. It then declined sharply and registered the day’s low at the 5171 points level at 2.17 p.m. It then rose sharply and turned into a range bound movement until closing at the day. The index witnessed a volatile session and moved in a range of 72 points. Sentiment was mixed and amongst the 50 Nifty stocks 26 were losers, while 24 were gainers. Buying was witnessed in realty, IT, banking, healthcare, technology and auto stocks, while selling was seen in oil & gas, metal, power, capital goods and FMCG stocks.
Technical Analysis:
Volume:
Volume (Qty shares) decreased 12.75%. This change is moderate and indicates a moderate participation by investors.
Market Breadth:
Overall Market Breadth on the NSE was negative. Amongst all the traded stocks, 496 were gainers, 945 were losers and 52 remained unchanged.
Slow Stochastic Indicator:
The Slow Stochastic Oscillator has declined in the over-sold 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 and is now turned flat (positive if it rises).
MACD Indicator:
The MACD is above zero but is now 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 flat while the Market Index is flat. No signal here.
Moving Averages (Trend Indicators)
The index:
Is below its 5-day average (at 5288) Negative.
Is below its 15-day average (at 5395) Negative.
Is below its 25-day average (at 5389) Negative.
Is above its 200-day average (at 5163) Positive.
Overall Market Strength/Weakness:
The indicators and oscillators discussed here are indicating a weak market but with a neutral bias.
Support Levels:
For short-term traders the immediate main support is at 4920 marked as S1.
The next support is at 4724 marked as S2.
Resistance Levels
The immediate main resistance is at 5743 marked as R1.
The next resistance is at 5919 marked as R2.
Pivot Point Analysis:
For intra-day traders the support and resistance levels are calculated according to the pivot point theory
and are:
Pivot point = 5212 (This is the level where the trend is likely to change during intra-day).
Support (1) = 5180.
Support (2) = 5140.
Resistance (1) = 5252.
Resistance (2) = 5284.
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 the 5, 15 and 25 day’s moving averages and all these averages are declining. Further, the velocity parameters continue to remain negatively trended indicating weakness. All these indicate a negative bias and the possibility of a further decline unfolding. Incidentally, the index declined near its 200 days average but immediately bounced back, indicating strong support at that level. The 200 days average is now at the 5163 points level. This again could prove to be a strong support level. However, if it declines below it, than it would indicate a change in the primary trend and a further decline could be expected. Investors are advised to avoid buying at present levels.