NSE India : S&P CNX Nifty - Daily Market Report for: Friday (November
06, 2009)

Nifty Recovers Sharply in late trade on Disinvestment Plans…

By Dominic Rebello

Review of the Previous day: The Nifty rose substantially on Thursday
(November 05, 2009) a net 54.75 points (1.16%) and closed at 4765
point level. The market opened down and continued so until 12:26 hours
when it reached its day low at 4610 points. Then it rose sharply in
the latter half of the day and closed near the day high. Sentiment was
bullish and amongst the 50 Nifty stocks, 41 were gainers, while 9 were
losers. Heavy buying was witnessed in telecom, metal, realty, power,
auto, oil & gas exploration, select banking and capital goods stocks.

Technical Analysis:

Volume: (Qty shares) increased 7.87%. This change is moderate and
indicates a moderate participation by investors.

Market Breadth: Overall Market Breadth on the NSE was positive.
Amongst all the traded stocks, 951 were gainers, 322 were losers and
39 remained unchanged.

Slow Stochastic Indicator: The Slow Stochastic Oscillator has risen
and has exited the over sold zone. The Slow K line in the Stochastic
Oscillator is above the slow D line (positive if it continues).

RSI Indicator: The RSI rose and crossed above the 40 level and is now
rising (positive 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 but both
lines are converging (positive if it continues).The ADX is rising
while the Market Index is rising, which indicates that the present up
trend is increasing in strength.

Moving Averages (Trend Indicators)

The index:

Has risen above its 5-day average (at 4700) Positive.

Is below its 15-day average (at 4913) Negative.

Is below its 25-day average (at 4960) Negative.

Is above its 200-day average (at 3961) Positive.

Overall Market Strength/Weakness: The indicators and oscillators
discussed here are indicating a neutral market but with a positive
bias.

Support Levels: For short-term traders the immediate main support is
at 4394 marked as S1 (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 = 4718 (This is the level where the trend is likely to
change during intra-day).
Support (1) = 4659.
Support (2) = 4552.
Resistance (1) = 4824.
Resistance (2) = 4883.

 (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 white body candle on higher volumes. In
fact, yesterday's candle has a long lower tail. A long lower tail
indicates that sellers dominated trading and drove prices lower during
the session. However by the end of the session, buyers resurfaced and
pushed prices back.

Further, the index has risen above its 5 day’s moving average.
Moreover, the velocity parameters, which were neutrally trended, have
now turned positive. All these indicate a positive bias.

Incidentally, all these may be the first signs of a reversal pattern.
A crossover by the index above the 15 days average will confirm the
same.
Investors are advised to adopt a wait and watch policy until a clear
reversal pattern emerges.

Work with strict stop losses on all positions.