The Afternoon Newspaper

NSE India : S&P CNX Nifty - Daily Market Report for: Tuesday (November
03, 2009)

 Nifty near a strong support level at 4672 points level…

By Dominic Rebello

Review of the Previous day: The Nifty fell moderately on Friday
(October 30, 2009) a net 38.85 points (0.82%) and closed at 4711 point
level. The market opened up, taking cues from the US and Asian
Markets, and continued so until 10:04 a.m. when it reached its day
high at 4853 points. Then it fell until 01:59 p.m. when it and reached
its day low at 4687 points.  It then turned into a range bound
movement until closing at the day. The Nifty witnessed an intraday
movement of 166 points. Sentiment turned bearish in the later half of
the day and amongst the 50 Nifty stocks, 30 were losers, while 20 were
gainers. Heavy selling was witnessed in telecom, technology, private
power, capital goods and oil & gas exploration stocks, while some
buying was witnessed in metal, auto, banking & financial, realty and
cement stocks.

Technical Analysis:

Volume: (Qty shares) increased 10.86%. This change is moderate but
indicates a wide participation by investors.

Market Breadth:Overall Market Breadth on the NSE was negative. Amongst
all the traded stocks, 491 were gainers, 777 were losers and 31
remained unchanged.

Slow Stochastic Indicator:The Slow Stochastic Oscillator is in the
over-sold zone. The Slow K line in the Stochastic Oscillator is below
the slow D line (negative if it continues).

 RSI Indicator:The RSI is above the 30 level but is now declining
(negative if it continues).

MACD Indicator: The MACD is below zero and is declining (negative if
it continues). It is below its 9-day Average (negative).

ADX Indicator & DI Lines:The +DI line is below the –DI line and both
lines are diverging (negative if it continues).The ADX is rising while
the Market Index is falling, which indicates that the present down
trend is increasing in strength.

Moving Averages (Trend Indicators)

The index:

Is below its 5-day average (at 4821) Negative.

Is below its 15-day average (at 4985) Negative.

Is below its 25-day average (at 4995) Negative.

Is above its 200-day average (at 3937) Positive.

Overall Market Strength/Weakness: The indicators and oscillators
discussed here are indicating a weak market with a negative bias.

Support Levels:For short-term traders the immediate main support is at
4672 marked as S1 (blue line below the Index). The next support is at
4394 marked as S2 (blue line below the Index).

Resistance Levels: The immediate main resistance is at 5193 marked as
R1 (red line above the Index). The next resistance is at 5580 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 = 4751 (This is the level where the trend is likely to
change during intra-day).

Support (1) = 4648.

Support (2) = 4585.

Resistance (1) = 4814.

Resistance (2) = 4917.
(For  support and resistance levels all F&O stocks refer to the
Afternoon newspaper)

Outlook for Today: On Japanese candlestick patterns the index has
formed a second consecutive, but small black body candle with a long
upper tail. A long upper tail indicates that the Bulls controlled part
of the session but lost control by the end and the Bears made an
impressive comeback. As such it indicates that the index was facing
selling pressure at higher levels. The body of this candle is below
and outside the body of the previous black body candle. This is also
negative.

Further, the index is below its 5, 15 and 25 day’s moving averages and
all the three averages are negatively trended. Moreover, the velocity
parameters are also negatively trended. All these indicate a negative
bias and the possibility of a further decline unfolding.

Incidentally, the index is approaching a major support level at the
4672 point's level. This could be a strong support level and there is
a possibility that the index could reverse from there. However, if it
declines below it, then a further decline could be expected. Investors
are advised to avoid buying at current levels.

Work with strict stop losses on all positions.