Market outlook for 24/05/10

Nifty fell 16.45 points or 0.33% to 4931.15 whilst Nifty May Future closed at 4928.4 discount of 2.75 points.

• FII sold in Cash (Net sell 1540.32 Crore)
• FII bought in index options and stock futures but sold in index futures and stock options (Net buy 105.4 Crore)
• DII bought in Cash (Net buy 816.92 Crore)
• US market ended in Positive.
• Global cues are Positive.
• SGX nifty is Positive as of now.
• Most Active Nifty May Call Option: 5000 and 4900.
• Most Active Nifty May Put Options: 4800 and 4900.
• Advance Decline for the day was 288:1025

NIFTY Technical

Current Spot: 4931.15
Pivot: 4906
3DEMA: 4952
7DEMA: 5007
20DEMA: 5102
100DEMA: 5077
RSI (7 days): 28.38
Parabolic SAR: 5083
Supports: 4868 - 4805
Resistance: 4969 - 5007

MP Values Spot: VAH - 4928, POC - 4884, VAL - 4880
MP Values Futures: VAH - 4932, POC - 4881, VAL - 4871

Over all view
On the Daily Chart nifty;

• Hammer formed at crucial support of 4844.
• The bounce was from the trend line joining lows made during the fall from 5400.
• Positive divergence in RSI 14 is intact. Stochastic has reached oversold zone.
• Volumes were good and breadth was poor.
• AD line has fallen to its lowest level since September 2009.

The Nifty is in a downtrend for the sixth consecutive week. Oscillators have started showing positive divergence. Stochastics on the weekly and daily charts have reached oversold zone. The daily charts show a hammer formed at good support. The Bullish Hammer Pattern is a significant candlestick that occurs at the bottom of a trend or during a downtrend and it is called a hammer since it is hammering out a bottom. The hammer has been formed after violating the 200 Dema intraday and recovering sharply from the lows of 4842.
The above indications point at the probability of a short term bottom having been formed at 4842. Hammer patterns need confirmation with a bullish candle the next trading day. Watch out for a bullish day on Monday.

Swing Trade

Biocon (284.60) - “Bullish Engulf”

Stock was in downtrend after completing “Evening Star “a bearish candlestick pattern on 3 May 2010. On Friday stock has formed “Bullish Engulf” a bullish candlestick pattern with strong volume breakout on daily chart. Daily momentum indicators have given bullish crossover to signal line. Short term moving averages also showing upward movement. Looking at all above technical parameters traders with moderate risk appetite can consider buy above 286 with tight Stop loss of 281 (closing basis) for a Target of 299.

Target Nifty
Buy Nifty above 4932 - 4962 - 4998 - 5055 SL - 4905
Sell Nifty below 4900 - 4874 - 4817 - 4781 SL - 4910

Stock Ideas for the Day
Reliance Industries: Buy above 998 for targets of 1002, 1012, 1026 SL of 988
Reliance Industries: Sell below 986 for targets of 982, 969, 960 SL of 993
Ceat: Buy above 132.1 for target of 133.8, 136 SL 128.8
JP Associates: Buy above 118 for target of 122, 127 SL 115

Positional Call
Bajaj Hindusthan: Buy above 103.9 for target of 118 SL 98 (One Month)
Tata Steel: Buy above 510 for target of 577 SL 487 (One Month)

Use strict STOP LOSS in each and every trade in this kind of volatile market and Trade at your own risk.

Thanks and Regards

S&P Wealth Creators

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