AUTOMATED TRADING

AUTOMATED TRADING

13 May 2013

NIFTY X-RAY REPORT FOR 13 MAY


Frequently buying by foreign institutional investors, by supporting  firm trend in global markets and IIP data showing a surge in industrial production in March lifted indices Sensex and Nifty up by over 2.5% last week. Sensex ended the week with a gain of 507 points or 2.6% at 20,083, a 14-week high, the Nifty hit its best levels in more than two years, closing at 6095 gaining 151 points or 2.5% along with midcap and smallcap stocks too jumped higher on strong buying support, the BSE Midcap and Smallcap indices moved up by around 2.3%. FMCG heavyweight which hit a new high last week ended stronger by 6.7%. IT stocks were back again and successfully gain with some encouraging economic data from U.S. side. Auto sector had given strong jump too with market. Tata motors was the star performer in Auto sector gained 8% last week. While Coal India declined 5.7% and Sun Pharma was down 5% last week.
In economic news India’s industrial production rose 2.5% in march 2013 as compare to a revised 0.46% growth in February 2013.

After two days consolidation Nifty gave breakout and went above 6100 and closed above 6100 on Saturday special session. Bias is strong positive. Nifty has not given any single day closing below previous bar since it reversed from 5480 level in this up leg. According to Nifty daily chart momentum indicators are in overbought zone indicating nifty may tired any time. According to nifty hourly chart rising wage/ending diagonal pattern has formed on the chart, indicating that price may face resistance very soon and may turn its face towards downside. I still assume that This up move is a corrective wave according to wave principle. Break below the trend line which is drawn on hourly chart may drag nifty towards 5880 level but remember one thing that we have not got any price wise sell or reversal signal. Highest open interest in 6200 call indicating upper boundary for the current series.
In the last session FIIs bought 11104 contracts of index future worth Rs. 337.34  cores with increasing in open interest. As nifty Future was up 50 points and open interest increased in index future indicating that fresh long position was created in Friday’s session.
LAST   HIGH - 6105  LAST LOW - 6045
WEEKLY HIGH - 6105 WEEKLY LOW - 5867
5 DMA DAILY - 6046
20 DMA DAILY- 5844
50 DMA DAILY- 5783
200 DMA DAILY- 5703 

Several top  companies quarterly result still to come out in coming week, investors are advisable to tread cautiously  over the next few sessions. Global factors will continue to make an impact on the Indian market.
Sustained inflow of funds from FIIs was one of the major contributors for the market's rise to multi-month highs last week. And the trend is likely to continue for a while, But we are getting negative divergence sign on momentum indicators, giving warning sign. However we have  no significant negative news is around to warrant a sell-off.
Dr Reddy’s Laboratories, Bank of Baroda , Bajaj Auto, and Reliance Infra  will announce their quarterly results during the course of next week. The data on consumer price inflation for rural and urban India for April, to be released on Monday and it will set the further trend for the market in the beginning part of week. Encouraging report on industrial production of march will help keep the mood positive for a while but technical indicators are giving overbought indication so mood may turn cautious and even bearish any time, as no big positive triggers are in the market ahead. A positive close on Wall street may set up a steady start for the Asian Markets on Monday. In the latter part of week market may remain into sideways to negative. In the below Advance -decline chart market is showing in up trend but advance -decline ratio is in negative divergence indicating possible reversal in near term.
chart source www.icharts.in
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