The Indian stock market posted solid gains during the truncated week (April 22-26, 2013), with investors indulging in some strong buying, betting on hopes the Reserve Bank will cut interest rate by following a significant drop in inflation in March. Some impressive results from India Inc., strong inflow of funds from foreign institutional investors and a fairly steady trend in global markets too contributed to the up move.
The markets closed with moderate declines in last session with realty being the worst performer down by -2.28%. The Sensex closed at 19286.72, down 120 points from its previous close, and the Nifty shut shop at 5871.45, down 44.85 points. The CNX Midcap index was down by 0.81% and closed at 7715.15, while the CNX Smallcap index loosen 1.33% in yesterday's trade. The market breadth was negative with advances at 355 against declines of 666 on the NSE.
Nifty gave a breakout above falling trend line and closed above 5900 psychological level but it fell again below 5900 level next day. AS per EOD candle stick pattern Bearish harami candlestick pattern has formed on daily chart which is indicating reversal in short term trend. As per nifty Relative Strength Indicator (RSI), it is at 61 level and it has turned its face towards downside indicating trend reversal also. As per nifty slow stochastic indicator it is placed in overbought zone. The recent price pattern on nifty daily chart hadd given strong bullish signal from 5477 with increasing RSI towards upside in near term. Nifty has strong resistance near 5971. NIFTY is in buy mode. But momentum indicator is placed in overbought zone so short term reversal may happen.
Nifty 5900 put added fresh 345,307 fresh contracts in open interest and 5900 call added 422,500 contracts in open interest. Nifty 5900 call total OI is standing at highest no on the call side with at 4589400 contracts, indicating upside boundary in current month further. As nifty was up by 44 points and addition in 5900 call and put both indicating a volatile move around this level. Put call ratio is at 1.05 indicating bull side.
According to the data available from the exchanges, FIIs have bought shares worth over Rs 3000 crore in the current calendar month. Till the middle of last week, FIIs were net buyers to the tune of over Rs 58,500 cores this calendar year.
In the last session FIIs bought 10028 contracts of index future worth Rs. 290 cores and open interest increased by 101%. As nifty Future was down 28 points and open interest increased in index future seems that profit booking has started after a good jump. Fii bought shares in cash segment of 224.75 cores.
LAST HIGH - 5907 LAST LOW - 5860
WEEKLY HIGH - 5924 WEEKLY LOW - 5500
5 DMA DAILY - 5848
20 DMA DAILY- 5674
WEEKLY HIGH - 5924 WEEKLY LOW - 5500
5 DMA DAILY - 5848
20 DMA DAILY- 5674
50 DMA DAILY- 5765
200 DMA DAILY- 5671
Stocks above / below 50 DMA Breakouts: Bullish / Bearish Stocks gaining / losing > 5% Stocks Oversold / Overbought Stocks at 20 day HI / LO Stocks at 52 week HI / LO | 405 / 616 16 / 1 16 / 24 24 / 77 111 / 68 35 / 34 |
Nifty has given strong momentum in last seven days in a perfect channel pattern on hourly chart. We have seen the channel breakdown on hourly chart in last session, indicating termination of previous trend, But I don,t have clear confirmation that trend will reverse. However i assume tread line as a very powerful indicator in technical analysis. 20 period simple moving average on hourly chart is at 5863 and we found that nifty took support exact at this level in last session. Therefore 5863 level will be a very short term trend changing level. Any break below this level may drag nifty 5763 and after that 5661 level. Next week Investors eye will be on the monetary policy review from the Reserve Bank of India, shares from interest rate sensitive automobile, banking and realty sectors will be in focus right through next week, again a truncated one due to a holiday on Wednesday of MAJDOOR DIWASH (May day).
The Reserve Bank of India is scheduled to review its next monetary policy on Friday, 3rd May 2013. It is widely expected that RBI will announce a rate cut, by considering a substantial decline in Wholesale Price Inflation in March. How ever RBI in its last monetary policy had cut repo rate by 25 basis points. According to the data released by the government on April 15, 2013, the wholesale price index eased to 5.96%, its lowest level in 40 months.
In economic news the Market Economics will release India Manufacturing PMI on Wednesday (1 May). And the data on India's services sector activity in April will be released on Friday. On the global front, the outcome of the European Central Bank's monetary policy meeting and disappointing U.S GDP data will impact the mood of market next week.
In short a volatile move is going to happen next week.
In short a volatile move is going to happen next week.
Short term stop loss for long trade at 5860 spot price if broken then expect 5760
Up side target expected - 5970 if broken then 6170 expected.
For larger view click on chart
For larger view click on chart
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