NSE India: CNX Nifty — Daily Market Report for: Friday (February 5, 2016)
(Based on the activity of the previous trading day) by Dominic Rebello
Review of the Previous day
The Nifty rose moderately on Thursday (February 04, 2016) a net 42.20 points (0.57%) and closed at the 7404 point level. The market opened up with a gap at the 7411 points level. It then turned into a range bound movement until 12.15 p.m. The index then rose sharply and registered the day’s high at the 7457 points level at 12.48 p.m. It then declined sharply and registered the day’s low at the 7365 points level at 2.48 p.m. The index then rose 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 91 points and closed above the psychologically important 7400 points level. Sentiment was bullish and amongst the 50 Nifty stocks 36 were gainers, while 14 stocks closed in the red. Substantial buying was seen in metal and capital goods stocks.
Technical Analysis:
Volume:
Volume (Qty shares) decreased 16.32%. This change is substantial and indicates a less than full participation by investors.
Market Breadth:
Overall Market Breadth on the NSE was negative. Amongst all the traded stocks, 432 were gainers, 726 were losers and 24 remained unchanged.
Slow Stochastic Indicator:
The Slow Stochastic Oscillator has declined in the neutral 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 40 level and is now rising (positive if it continues).
MACD Indicator:
The MACD is below zero but is rising (positive if it continues). It is above its 9-day Average (positive).
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:
Is below its 5-day average (at 7468) Negative.
Is below its 15-day average (at 7427) Negative.
Is below its 25-day average (at 7537) Negative.
Is below its 200-day average (at 8062) Negative.
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 the 7224 points level.
The next support is at the 7136 points level.
Resistance Levels
The immediate main resistance is at the 7608 points level.
The next resistance is at the 7768 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 = 7409 (This is the level where the trend is likely to change during intra-day).
Support (1) = 7361.
Support (2) = 7318.
Resistance (1) = 7452.
Resistance (2) = 7500.
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, 15, 25 and 200 days moving averages and all the four averages are declining. Further, the velocity parameters too indicate weakness. Both these indicate a negative bias. Investors are advised to avoid buying at current levels.