The domestic Indian markets opened lower and witnessed sustained selling pressure, falling further due to higher than expected food inflation data. However, the markets pulled back from the lows in the afternoon on short covering and selective buying. The markets ended the day with moderate losses, closing near the highs. Technically, the market breadth remained negative amidst lower trading volumes. Key support and resistance levels for the Nifty are identified. Short term trading ideas based on technical analysis are also provided.

1. Daily Technical Outlook
21st October 2011
Indices Close % Chg. Mirroring the weak set of global market cues, the domestic
BSE SENSEX 16936.89 -0.87 markets witnessed a gap down opening. Sustained selling
S&P CNX NIFTY 5091.90 -0.92 pressure was witnessed as Nifty slipped lower. Higher food
NIFTY OCT. FUT. 5102.85 -0.90 inflation data also did not help in improving the market
India VIX 25.60 6.44
sentiment. However, the markets managed to pull back from
the lows of the day in the afternoon session on back of short
S&P CNX NIFTY Technical Levels covering and selective buying support. The markets ended
Level 1 Level 2 Level 3
the day with moderate losses to close near the highs for the
day. The top losers for the day were HDFC, IDFC, DLF, JP
Support 4987 4757 4563
Associates, ICICI Bank, Tata Power, Rel. Power, Siemens,
Resistance 5161 5230 5325
Ranbaxy and Sesa Goa.
Volume (Lacs Shares) Technically, the market breadth remained negative
20/10/11 19/10/11 % Chg. amidst lower volumes. The global market set of cues are
BSE 1915 2186 -12.40 largely negative. The domestic markets are likely to
NSE 4960 5434 -8.72 witness a flat opening. The Nifty remains placed above
Total 6875 7620 -9.77 its 50-day SMA, which is a short term positive for the
Source – BSE & NSE markets. Moreso, the KST, RSI and MACD are placed
above their respective averages. The KST and MACD are
Turnover ( ` Crores)
placed in the positive territory. All these conditions
20/10/11 19/10/11 % Chg.
would lead to further buying support. However, the few
BSE 2580.57 2448.33 5.40 prevailing technical negatives continue to hold good and
NSE 9127.84 9489.69 -3.81 are likely to cap the upside gains. The Stochastic is
NSE F&O 159182.05 137726.54 15.58 placed below its average. The Nifty continues to trade
Total 170890.46 149664.56 14.18 below its 200-day SMA. Further the 50-day SMA remains
Source – BSE & NSE placed below the 100-day SMA. All these conditions
Market Breadth (NSE)
would lead to selling pressure and profit taking
especially at higher levels. The ADX, +DI line and –DI
Advances 510
line are moving sideways, indicating a range bound
Declines 923
trend. The market sentiment remains cautious. Now, it is
Same 80 important that the Nifty moves and sustains above the
Total 1513 5161 level for it to move higher to test the 5230 level. The
A/D Ratio 0.55 : 1 4987 remains an important support level. The markets
Source – NSE will witness intermediate bouts of volatility ahead of the
Moving Averages S&P CNX NIFTY derivative segment expiry and RBI’s policy meet next
50 Day SMA 4998.57
week. In the meanwhile the markets would take cues
◄Negative from the global markets and the earnings season. The
100 Day SMA 5258.09
support levels for Nifty are placed at 4987, 4757, 4563 and
200 Day SMA 5431.13 ◄Negative
4387. The Nifty faces resistance at the 5161, 5230 and 5325.
Intra-day Resistance Intra-day Support
Indices Close Pivot Point R1 R2 R3 S1 S2 S3
BSE SENSEX 16937 16881 17018 17098 17315 16801 16664 16447
S&P CNX NIFTY 5092 5075 5116 5140 5205 5051 5010 4945
NIFTY OCT. FUT. 5103 5082 5132 5160 5238 5054 5005 4927
Sanjay Bhatia (AVP – Technicals), Email Id sanjay@keynotecapitals.net Yahoo Chat Id: keytechnicals@yahoo.in
Keynote Capitals Ltd.
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4 Floor, Balmer Lawrie Bldg., 5, J. N. Heredia Marg, Ballard Estate, Fort, Mumbai, India – 400001. Tel: 3026 6000 / 2269 4322
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2. Short Term Trading Ideas Based On Technical Analysis (5 - 7 Days)
Stop
Initiation Stop Loss Target
Stock Close Action Price Loss * (%) Target (%) Remarks
Apollo Tyre 53.20 Sell Below 52.00 55.60 6.92 44 15.38
Adani Power 85.75 Buy Above 86.25 84.00 2.61 91 5.51
Bombay Dying 411.25 Buy Above 415.00 399.00 3.86 450 8.43
* Stop Losses are to be considered on Closing basis only.
Keynote Capitals Ltd.
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4 Floor, Balmer Lawrie Bldg., 5, J. N. Heredia Marg, Ballard Estate, Fort, Mumbai, India – 400001. Tel: 3026 6000 / 2269 4322
www.keynotecapitals.com

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