Review of the Previous day: The Nifty rose marginally on Wednesday (March 10, 2010) a net 14.75 points (0.29%) and closed at the 5116 point level. The market opened down then turned up and continued so until 10:52 a.m. when it reached its day high at 5137 points. Then it fell and turned into a range bound movement until closing at the day. The Nifty moved in a range of just 45 points. Sentiment was bullish and amongst the 50 Nifty stocks, 31 were gainers, while 19 were losers. Buying was witnessed in FMCG, cement, banking & financial, auto and capital goods stocks.

Technical Analysis:

Volume (Qty shares) increased 0.06%. 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, 523 were gainers, 800 were losers and 39 remained unchanged.

Slow Stochastic Indicator: The Slow Stochastic Oscillator is in the over-bought 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 60 level and is now rising (positive if it continues).

MACD Indicator: The MACD is above zero and is rising (positive if it continues). It is above its 9-day Average (positive).

ADX Indicator & DI Lines: The +DI line is above the -DI line and both lines are are flat. No signal here. The ADX is flat while the Market Index is rising. No signal here.

Moving Averages (Trend Indicators)

The index:

Is above its 5-day average (at 5102) Positive.

Is above its 15-day average (at 4975) Positive.

Is above its 25-day average (at 4907) Positive.

Is above its 200-day average (at 4784) Positive.

All the four averages are positively trended. Positive.

Overall Market Strength/Weakness: The indicators and oscillators discussed here are indicating a strong market but with a neutral 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 5161 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 = 5115 (This is the level where the trend is likely to change during intra-day).
Support (1) = 5093.
Support (2) = 5070.
Resistance (1) = 5138.
Resistance (2) = 5161.

(For support and resistance levels all F&O stocks refer to the Afternoon
Newspaper or Click here)

Outlook for Today: On Japanese candlestick patterns the index the index has formed a doji pattern. This indicates indecisiveness amongst market men. The next candle formation will confirm whether the bias is towards the buy or sell side of the market.
However, the index is above its 5, 15, 25 and 200 days moving averages and all the averages are positively trended. Further, the velocity parameters also continue to remain positively trended. Both these indicate the possibility of a further up move unfolding.
Incidentally, the index is approaching a major resistance level at the 5161 points level. There is a possibility that the index could face some resistance there. However, if it crosses above it, then a further sharp rise can be expected. Investors are advised to hold long positions.

Work with strict stop losses on all positions.