Outlook for the Day: 9th July 2010

The markets around the globe were bouncing in expectations of “better than expected” quarterly results by the corporates. The Wall Street acted as a leading indicator to the markets all over the world. The Asian & European markets opened up with strong gains. The Indian markets were no exception and the index opened with a gap up opening. As suggested in our
newsletter, the markets all over the world are correlated and the intraday swings would be mainly news driven. The benchmark is expected to be momentum driven and could witness vacillation.

The market was largely driven by the global cues and the gap up opening was susceptible for profit booking. The support at the short term moving average (20-EMA) at 5242 acted as a strong support to the benchmark. The medium term moving average (50-EMA) is in the sideways movement which could be acting as a strong bottom even in case of a sharp correction.
The ADX indicator is showing some movement towards the upper levels. This move upwards could be converted in to a trend if the indicator crosses the 30 mark convincingly. The +DI line and-DI line are deviating away from each other which could be signal towards higher level keeping in view the periodic nature of these indicators.

The MACD trend indicator is showing a decisive moment in terms of technical view on Nifty. The MACD line is flipping at the zero line along with the Signal line which is floating slowly towards the zero level. It would be interesting to see the next move of these indicators which would be giving decisive push to the markets. The similar story holds good for the MACD Histogram
which could give a final breakout in any side of the neutral levels.

The Slow Stochastic momentum indicator as already iterated in our newsletters will contain the most weightage in these times of momentum based trades. The position of the %K and the %D line both in absolute and relative terms would be important to see. We expect Nifty to trade in the range of 5335-5255.


-TEAM SLT