Daily Market Report for Tuesday (June 28, 2011)

Daily Market Report for Tuesday (June 28, 2011) Uptrend Continues...

Review of the Previous day: The Nifty rose substantially on Monday (June 27, 2011) a net 55.35 points (1.01%) and closed at the 5526 point level. The market opened down with a gap at the 5441 points level on weak global cues. It then declined further and registered the day’s low at the 5434 points level at 9.16 a.m. It then rose sharply into the green and registered the day’s high at the 5552 points level at 1.21 p.m. It then declined marginally and turned into a range bound movement until closing at the day. Sentiment was bullish and amongst the 50 Nifty stocks, 39 were gainers, while 11 were losers. The index rose for the third consecutive session and closed above the psychologically important 5500 points level. Heavy buying was witnessed in capital goods, banking, auto and oil & gas stocks, while some selling was witnessed in realty, FMCG, and consumer durables stocks. Technical Analysis: Volume (Qty shares) decreased 6.37%. This change is small and indicates a moderate participation by investors. Market Breadth: Overall Market Breadth on the NSE was positive. Amongst all the traded stocks, 868 were gainers, 520 were losers and 66 remained unchanged. Slow Stochastic Indicator: The Slow Stochastic Oscillator has risen in the neutral zone. The Slow K line in the Stochastic Oscillator is above the slow D line (positive if it continues). RSI Indicator: The RSI is above the 40 level and is now rising (positive if it continues). MACD Indicator: The MACD is below zero but is now rising (positive if it continues). It has crossed above its 9-day Average (positive and a buy signal). ADX Indicator & DI Lines: The +DI line is above the –DI line and both lines are diverging (positive if it continues). The ADX is falling while the Market Index is rising, which indicates that the present up trend is decreasing in strength. Moving Averages (Trend Indicators) The index: Is above its 5-day average (at 5374) Positive. Is above its 15-day average (at 5427) Positive. Is above its 25-day average (at 5450) Positive Is below its 200-day average (at 5752) Negative. All the four averages are negatively trended. Negative.Overall Market Strength/Weakness: The indicators and oscillators discussed here are indicating astrong market with a positive bias. Support Levels: For short-term traders the immediate main support is at 5135 marked as S1 (blue line below the Index). The next support is at 4795 marked as S2 (blue line below the Index). Resistance Levels: The immediate main resistance is at 5982 marked as R1 (red line above the Index). The next resistance is at 6357 marked as R2 (red line above the Index). Pivot Point Analysis: For intra-day traders the support and resistance levels are calculated according to the pivot point theory and are: Pivot point = 5505 (This is the level where the trend is likely to change during intra-day). Support (1) = 5456. Support (2) = 5386. Resistance (1) = 5575. Resistance (2) = 5623. Outlook for Today: On Japanese candlestick patterns the index has formed a third consecutive and long white black body candle. This is positive. Further, the index is above the 5, 15 and 25 days moving averages. Moreover, the velocity parameters are also positively trended. Also, a buy signal has been generated on the MACD indicator. All these indicate a positive bias and the possibility of a further up move unfolding. Investors are advised to hold long positions. Work with strict stop losses on all positions.