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Adopt A Wait And Watch Policy

Thursday, February 12, 2015

NSE India: CNX Nifty — Daily Market Report for: Thursday (February 12, 2015)  
(Based on the activity of the previous trading day) by Dominic Rebello

Review of the Previous day:
The Nifty rose moderately on Wednesday (February 11, 2015) a net 61.85 points (0.72%) and closed at the 8627 point level. The market opened up with a gap at the 8603 points level. It then declined and registered the day’s low at the 8593 points level at 9.48 a.m. The index then rose sharply  and registered the day’s high at the 8651 points level at 1.21 p.m. The index then declined and 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 58 points and closed above the 8600 points level. Sentiment was bullish and amongst the 50 Nifty stocks 39 were gainers, while 11 stocks closed in the red. All the indices closed in the green. Substantial buying was witnessed in capital goods and metal stocks.

Technical Analysis:

Volume (Qty shares) decreased 5.07%. This change is small and indicates a moderate participation by investors.

Market Breadth:
Overall Market Breadth on the NSE was positive. Amongst all the traded stocks, 990 were gainers, 456 were losers and 36 remained unchanged.

Slow Stochastic Indicator:
The Slow Stochastic Oscillator has risen 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 rising (positive if it continues).

MACD Indicator:
The MACD is above zero but is 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 but both lines are converging (positive if it continues).
The ADX is falling while the Market Index is rising, which indicates that the present up trend is decreasing in strength.

Moving Averages (Trend Indicators)
The index:

Has crossed above its 5-day average (at 8618) Positive.
Is below its 15-day average (at 8752) Negative.
Has crossed above its 25-day average (at 8602) Positive.
Has crossed above its 200-day average (at 7905) Positive.

Overall Market Strength/Weakness:
The indicators and oscillators discussed here are indicating a weak market but with a positive bias.

Support Levels:
For short-term traders the immediate main 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 = 8624 (This is the level where the trend is likely to change during intra-day).
Support (1) = 8597.
Support (2) = 8566.
Resistance (1) = 8655.
Resistance (2) = 8683.

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 has crossed above the 5 and 25 day moving average. The index is now above its 5, 25 and 200 day moving averages. This is positive.

But, the index is still below its 15 day moving averages. Further, the velocity parameters too indicate weakness. Both these indicate a negative bias. Investors are advised to adopt a wait and watch policy, until a clearer signal emerges.

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