NSE India: CNX Nifty — Daily Market Report for: Thursday (May 14, 2015)
(Based on the activity of the previous trading day) by Dominic Rebello
Review of the Previous day:
The Nifty rose substantially on Wednesday (May 13, 2015) a net 108.50 points (1.34%) and closed at the 8235 point level. The market opened up with a gap at the 8181 points level. It then rose further and registered the day’s high at the 8254 points level at 10.00 a.m. The index then declined sharply into the red and registered the day’s low at the 8089 points level at 11.08 a.m. It then bounced back into the green and turned into a range bound until closing at the day. The Nifty moved in a range of 165 points and closed above the psychologically important 8200 points level. Sentiment was bullish and amongst the 50 Nifty stocks 43 were gainers, while 7 stocks closed in the red. All the sectoral indices barring realty closed in the green. Substantial buying was witnessed in banking and capital goods stocks.
Volume (Qty shares) increased 12.51%. 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, 957 were gainers, 493 were losers and 36 remained unchanged.
Slow Stochastic Indicator: The Slow Stochastic Oscillator has risen in the neutral zone. The Slow K line in the Stochastic Oscillator is above the slow D line (positive if it continues).
RSI Indicator: The RSI rose and crossed above the 40 level and is now rising (positive if it continues).
MACD Indicator: The MACD is below zero and is rising (positive 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 flat while the Market Index is rising. No signal here.
Moving Averages (Trend Indicators)
Is below its 5-day average (at 8159) Negative.
Is below its 15-day average (at 8259) Negative.
Is below its 25-day average (at 8432) Negative.
Is below its 200-day average (at 8289) Negative.
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 7857 points level.
Resistance Levels: The immediate main resistance is at the 8609 points level. The next resistance is at the 8523 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 = 00 (This is the level where the trend is likely to change during intra-day).
Support (1) = 00.
Support (2) = 00.
Resistance (1) = 00.
Resistance (2) = 00.
Outlook for Today:
On Japanese candlestick patterns the index has formed a hammer, (reflected by it small body and long lower tail - A long lower tail indicates that the Bears controlled the ball for part of the session, but lost control by the end and the Bulls made an impressive comeback) The formation of a Hammer after a major decline is a bullish reversal pattern. As such there is a possibility that the market could reverse from here.
Further, the index has crossed above its 5 and 200 day moving averages. Moreover, the velocity parameters which were negatively trended have now turned neutral. All these indicate a positive bias and the possibility of a further upmove unfolding.
However, the index is still below its 15 and 25 day moving averages. This is negative. Investors are advised to avoid selling at present levels and adopt a wait and watch policy for the next session or two until clearer signals emerge.