Market outlook for 10/05/10

Nifty fell 72.80 points or 1.43% to 5018.05 whilst Nifty May Future closed at 5019.80 premium of 1.75 points.

• FII sold in Cash (Net sell 1308.39 Crore)
• FII bought in index options and stock futures but sold in index futures (Net buy 806.77 Crore)
• DII bought in Cash (Net buy 654.35 Crore)
• US market ended in Deep RED.
• Global cues are flat to Negative.
• SGX nifty is Negative as of now.
• Most Active Nifty May Call Option: 5200 and 5100.
• Most Active Nifty May Put Options: 4900 and 5000.
• Advance Decline for the day was 139:1191

NIFTY Technical

Current Spot: 5018.05
Pivot: 5025
3DEMA: 5078
7DEMA: 5162
20DEMA: 5240
100DEMA: 5114
RSI (7 days): 18.71
Parabolic SAR: 5304
Supports: 4978 - 4938
Resistance: 5065 - 5113
MP Values Spot: VAH - 5040, POC - 5029, VAL - 5009
MP Values Futures: VAH - 5030, POC - 5013, VAL - 5005

Over all view
Daily

• Fall continuously on all days of the last week on increasing volumes and extremely bad breadth.
• 61.8 % fibo support at 4955 of rise from 4675.
• Oscillators weak and stochastic in oversold zone in positive divergence.
• Taken support on trendline from 3918. Nifty must trade above 4990 for a bounce from the trendline.
• 200 DEMA at 4880 coinciding with the 50% fibo level of rise from 3918 and the 200 DSMA is at 4962 almost coinciding with 61.8% fibo level of rise from 4675.

Intra day

• Oscillators showing positive divergence.
• A falling wedge and inverted head and shoulder pattern seen formed in the last two days action.
• All EMA’s are bearishly aligned.

The nifty has fallen sharply for the last 5 trading days without respite. The daily and weekly oscillators are weak and indicating further fall. The intraday charts though are showing positive divergence and very minor bullish patterns which could develop into a small bounce. Strong supports exist at 4960-4955-4880 for this possibility.
Nifty trading above 5046 is necessary for further bullishness. Resistance for this up move is at 5100, 5150.
The trend is down and one should look for opportunities to short on rallies.

Target Nifty
Buy Nifty above 5024 - 5047 - 5077 - 5114 SL - 5010
Sell Nifty below 5005 - 4985 - 4949 - 4919 SL - 5015

Stock Ideas for the Day
Reliance Industries: Buy above 1035 for targets of 1044, 1053, 1067 SL of 1020
Reliance Industries: Sell below 1018 for targets of 1009, 1000, 988 SL of 1026
ITC: Buy above 260.1 for targets of 262, 265 SL of 257
Dabur: Sell below 179 for targets of 176, 171 SL of 184

Positional Call
Tata Steel: Buy above 561 for target of 580 SL 552 (One Week)
Reliance Industries: Buy above 1035 for targets of 1145 SL of 1009 (One Month)
Engineers India Ltd.: Buy above 505 for targets of 570 SL of 499 (One Week)

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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