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Bullish Hook Formation...

Tuesday, January 15, 2013

NSE India: S&P Nifty — Daily Market Report for: Tuesday (January 15, 2013) 
(Based on the activity of the previous trading day) by Dominic Rebello

Review of the Previous day:
The Nifty rose substantially on Monday (January 14, 2013) a net 72.75 points (1.22%) and closed at the 6024 point level. The market opened up with a gap at the 5967 points level. It then declined by a few points and registered the day’s low at the 5962 points level at 9.27 a.m. The index then rose and turned into a range bound movement until 3.00 p.m. It then rose sharply towards the end of the session and registered the day’s high at the 6036 points level at 3.30 p.m. The Nifty remained above its previous close throughout the session, moved in a range of 75 points and closed above the psychologically important 6000 points level. Sentiment was bullish and amongst the 50 Nifty stocks 37 were gainers, while 13 were losers. All the sectoral indices barring auto and healthcare closed in the green. Heavy buying was seen in realty, IT, technology and consumer durables stocks.

Technical Analysis:

Volume (Qty shares) decreased 13.31%. This change is moderate and indicates a moderate participation by investors.

Market Breadth:
Overall Market Breadth on the NSE was positive. Amongst all the traded stocks, 987 were gainers, 688 were losers and 74 remained unchanged.

Slow Stochastic Indicator:
The Slow Stochastic Oscillator has risen in the neutral zone.
The Slow K line in the Stochastic Oscillator has risen above the slow D line (positive and a buy signal).

RSI Indicator:
The RSI rose and crossed above the 60 level and is now rising (positive if it continues).

MACD Indicator:
The MACD is above zero and is now rising (positive if it continues). It is below its 9-day Average (negative).

ADX Indicator & DI Lines:
The +DI line is above the –DI line and both lines are flat. No signal here.
The ADX is rising while the Market Index is rising, which indicates that the present up trend is increasing in strength.

Moving Averages (Trend Indicators)
The index:

Has crossed above its 5-day average (at 5983) Positive.
Is above its 15-day average (at 5954) Positive.
Is above its 25-day average (at 5927) Positive.
Is above its 200-day average (at 5419) Positive.
All the four averages are positively trended. Positive.

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

Support Levels:
For short-term traders the immediate main support is at 5610 marked as S1.
The next support is at 5365 marked as S2.

Resistance Levels
The immediate main resistance is at 6176 marked as R1.
The next resistance is at 6339 marked as R2.

Pivot Point Analysis:
For intra-day traders the support and resistance levels are calculated according to the pivot point theory and are:
Pivot point = 6008 (This is the level where the trend is likely to change during intra-day).
Support (1) = 5979.
Support (2) = 5933.
Resistance (1) = 6053.
Resistance (2) = 6082.

Outlook for Today:
As indicated in our previous few reports ‘hold with a stop loss at the 15 day moving average’, the markets bounced back into positive terrain after witnessing a few bouts of profit booking and thus establishing the strength of the 15 day moving average. On Japanese candlestick patterns the index has formed a long white body candle In fact, yesterday's candle is almost like a white body Marubozu candle.  (A White Marubozu forms when the open equals the low and the close equals the high). This is positive. Further, the index has crossed above the 5 day’s moving average. The index is now above the 5, 15, 25 and 200 day’s moving averages and all the four averages are rising and also positively trended. Moreover, a bullish hook formation is visible on the 5 day’s moving average. The velocity parameters which were negatively trended have now turned neutral. All these indicate a positive bias and the possibility of a further up move unfolding. Investors are advised to hold long positions.

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