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Avoid Buying At Current Levels

Thursday, April 30, 2015

NSE India: CNX Nifty — Daily Market Report for: Thursday (April 30, 2015)  
(Based on the activity of the previous trading day) by Dominic Rebello

Review of the Previous day:
The Nifty fell moderately on Wednesday (April 15, 2015) a net 45.85 points (0.55%) and closed at the 8239 point level. The market opened down with a gap at the 8274 points level. It then declined sharply and registered the day’s low at the 8219 points level at 10.42 a.m. The index then rose and turned into a range bound until 1.28 p.m. It then rose sharply into the green and registered the day’s high at the 8308 points level at 1.52 p.m. The index then dropped back into the red and turned into a range bound until closing at the day. The Nifty witnessed a volatile session and moved in a range of 89 points. Sentiment was bearish and amongst the 50 Nifty stocks 34 were losers while 16 stocks closed in the green. Substantial selling was witnessed in FMCG stocks.

Technical Analysis:

Volume (Qty shares) decreased 6.45%. This change is small and indicates a moderate participation by investors.

Market Breadth:
Overall Market Breadth on the NSE was negative. Amongst all the traded stocks, 825 were gainers, 614 were losers and 43 remained unchanged.

Slow Stochastic Indicator:
The Slow Stochastic Oscillator is 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 30 level but is now declining (negative if it continues).

MACD Indicator:
The MACD is below zero and 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 rising while the Market Index is falling, which indicates that the present down trend is increasing in strength.

Moving Averages (Trend Indicators)
The index:

Is below its 5-day average (at 8288) Negative.
Is below its 15-day average (at 8524) Negative.
Is below its 25-day average (at 8522) Negative.
Has dropped below its 200-day average (at 8267) Negative.

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

Support Levels: For short-term traders the immediate main support is at the 8172 points level. The next 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 = 8256 (This is the level where the trend is likely to change during intra-day).
Support (1) = 8203.
Support (2) = 8167.
Resistance (1) = 8292.
Resistance (2) = 8345.

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 dropped below its 200 day moving average. The index is now below its 5, 15, 25 and 200 day moving averages. Further, the velocity parameters too indicate weakness. All these indicate a negative bias and the possibility of a further decline unfolding. Investors are advised to avoid buying at current levels.

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