NIFTY and stock market outlook and review for July 28, 2010 (28/07/2010)

NIFTY and Share market outlook and review for July 28, 2010 (28/07/2010)

Yesterday, on the Daily Charts, NIFTY made a Small White Candlestick, continuing the uptrend in the market. Till the announcement of the RBI’s Credit Policy, the markets traded very range bound with no major movement. RBI hiked the Repo Rate by 25 bps from 5.50% to 5.75% and also the Reverse Repo Rate by 50 bps from 4.00% to 4.50%, keeping the CRR (Cash Reserve Ratio) unchanged. After this announcement a good bounce back was witnessed in the rate sensitive stocks (Banking, Realty & Infra and Autos). For the day, NIFTY made a high of 5450.95 and a low of 5407.20. Finally, for the day it closed at 5430.60 (making it a fourth consecutive session to give closing above the levels of 5400).

A range bound movement is expected in the next trading session, as F&O Expiry is also on Thursday (the last Thursday of the month). Only Stock and Sector specific momentum will be observed as results season is running, but then too traders should follow a cautious approach by following Strict Stop Losses.

Net Selling of Rs. 22.10 Crore in Cash Segment and Net Buying of Rs. 1507.79 Crore in F&O Segment by FIIs was witnessed on Tuesday’s Trading Session.

Important Results to be announced tomorrow:
CHENNIPETRO, CORPBANK, DLF, GMDC, HAVELLS, HCLTECH, JINDALSTEL, LUPIN,M&M, MMTC, MRF, NEYVELI, PATNI, SOBHA, SUNTV, TATACOMM, VOLTAS, WELCORP

5360 is the major Support which has to be breached to prove the weakness, and unless the NIFTY is trading above this level, the Markets are positive. It was the fourth continuous closing of NIFTY above 5400 levels; hence it may touch the levels of 5500 too in the coming sessions, continuing the positive trend.

The 20-Days EMA (Exponential Moving Average) has crossed the 50-Days SMA (Simple Moving Average), supporting the recent positive move. MACD (Moving Average Directional Index) and RSI (Relative Strength Index) have turned positive. Traders may take delivery basis position in the stocks turning from their oversold territory and make smart gains.

For the day, intraday resistance for NIFTY comes at 5445 / 5460 / 5485 levels. At the same time, 5416 / 5395 / 5380 will act as major intraday support levels.

Contributed By: Sonal Natani MS(Finance), ICFAI, Hyderabad.