NSE India: CNX Nifty — Daily Market Report for: Friday (March 20, 2015)
(Based on the activity of the previous trading day) by Dominic Rebello
Review of the Previous day:
The Nifty fell substantially on Thursday (March 19, 2015) a net 51.25 points (0.59%) and closed at the 8634 point level. The market opened up with a gap at the 8749 points level. It then rose further and registered the day’s high at the 8788 points level at 10.09 a.m. The index then declined and turned into a range bound movement until 2.25 p.m. It then declined sharply into the red and registered the day’s low at the 8614 points level at 3.10 p.m. and then turned into a range bound movement until closing at the day. The Nifty witnessed a choppy session and moved in a range of 174 points. Sentiment was bearish and amongst the 50 Nifty stocks 36 were losers, 13 were gainers and 1 remained unchanged. Substantial selling was witnessed in banking and realty stocks.
Technical Analysis:
Volume:
Volume (Qty shares) decreased 6.93%. 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, 476 were gainers, 964 were losers and 47 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 at the slow D line (neutral).
RSI Indicator:
The RSI is above the 40 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 and both lines are diverging (negative if it continues).
The ADX is falling while the Market Index is falling, which indicates that the present down trend is decreasing in strength.
Moving Averages (Trend Indicators)
The index:
Is below its 5-day average (at 8664) Negative.
Is below its 15-day average (at 8788) Negative.
Is below its 25-day average (at 8788) Negative.
Is above its 200-day average (at 8134) Positive.
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 8608 points level.
The next 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 = 8679 (This is the level where the trend is likely to change during intra-day).
Support (1) = 8570.
Support (2) = 8506.
Resistance (1) = 8744.
Resistance (2) = 8853.
Outlook for Today:
On Japanese candlestick patterns the index has formed a second consecutive long black body candle. This is negative. Further, the index is below its 5, 15 and 25 day moving averages. Moreover, the velocity parameters continue to indicate weakness. All these indicate a negative bias and the possibility of a further decline unfolding.
Incidentally, the index is approaching a major support level at the 8608 points level. There is a possibility that the index could find some support and reverse from there. However, if it declines below it, then a further decline could be expected. Investors are advised to avoid buying at present levels.