Friday, August 18, 2017

9820 CONTINUES TO BE IMMEDIATE SUPPORT

9820 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices nosedived 1.2%-1.9%, with the Dow posting biggest one-day fall in 3 months on concerns over the Trump administration's ability to follow through on economic policy

Doubts over Trump's ability to carry out proposed economic policies grew following rumors that National Economic Council Director Gary Cohn would be the next key member to resign from the administration because of Trump's remarks following the violent protests in Charlottesville, VA. The rumor was later refuted by the White House.

A terror attack in Barcelona in which a van drove into pedestrians and killed at least 13, also soured the sentiment.

European markets fell 0.5%-1%. Euro fell off from a near 2½-year high against the dollar after a summary from the European Central Bank's July 20 meeting showed officials were concerned about an "overshooting" in the currency.

AT HOME

Benchmark indices ended little changed after a rangebound but choppy trade. Sensex settled at 31795, up 25 points while Nifty added 7 points to finish at 9904. BSE mid-cap index fell 0.4% while small-cap index gained 0.5%. BSE IT and Teck indices climbed 1.8% each, becoming top gainers among the sectoral indices while Bankex and Auto index were the top losers, down 0.7% each.

FIIs net sold stocks and index futures worth Rs. 981 cr and 253 cr respectively but net bought stock futures worth Rs 726 cr. DIIs were net buyers to the tune of Rs 829 cr.

Currency market was shut yesterday on account of Parsi New Year. 

HDFC Bank Ltd cut interest rates on most of its savings accounts to 3.5% from 4%.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.4%-1.3% and SGX Nifty is suggesting about 60 points lower start for our market.

After Nifty crossed the immediate hurdle of 9860, we had said that 10000, where a trendline adjoining recent tops on the hourly chart is placed, is the next upside target as well as the hurdle to eye.

Nifty, after touching a high of 9948, retreated to close at 9904 and is set to open around 9850 today.

9820, where 34-hour moving average is placed, continues to be immediate support below which 9685, the bottom made last week, would be the next crucial support to eye.


Traders are advised to keep stop-loss of 9820 in long positions.

Thursday, August 17, 2017

NIFTY CROSSES 9860 HURDLE; STAY LONG WITH THE STOP-LOSS OF 9820

NIFTY CROSSES 9860 HURDLE; STAY LONG WITH THE STOP-LOSS OF 9820

WORLD MARKETS                             

US indices gained 0.1%-0.2% but backlash from the business community against President Donald Trump kept gains in check.

CEOs who were part of a strategic council to Trump agreed to disband the group and condemn Trump's confrontational response to a violent white supremacist rally in Charlottesville, Virginia. Shortly after this development, Trump took to Twitter to say he was ending that forum and another featuring manufacturing leaders.

The minutes of the July 26 Fed meeting showed Fed officials were split over the path of future monetary policy. While some Fed members said they were worried over the tightening labor market, others voiced their concern over low inflation rates in the U.S.

U.S. Treasury yields eased after the minutes' release, with the benchmark 10-year yield at 2.234% and the two-year yield at 1.33%. Dollar index fell about a third of a percent to 93.47.

Housing starts and permits fell unexpectedly last month.

Oil fell more than 1% on concerns that U.S. production was increasing.

European markets added 0.7%. Eurozone GDP grew by 2.2% in the second quarter which was slightly stronger-than-expected.

AT HOME

Benchmark indices soared a percent, extending the pullback rally to second straight day. Sensex settled at 31771, up 322 points while Nifty added 103 points to finish at 9897. BSE mid-cap and small-cap indices gained 1.3% each. Except a 0.1% lower Capital Goods and Utilities indices, all the BSE sectoral indices ended in green with FMCG and Metal indices leading the tally, up 2.5% and 1.7% respectively.

FIIs net sold stocks and index futures worth Rs 1090 cr and 1683 cr respectively but net bought stock futures worth Rs 201 cr. DIIs were net buyers to the tune of Rs 1337 cr.

Rupee depreciated 3 paise to end at 64.15/$.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

In Yesterday's report we had mentioned that 9860, the 38.2% retracement level of the recent 10140-9685 fall, is the immediate hurdle, a crossover of which is required for a fresh upmove.

The benchmark surged 103 points to settle at 9897, crossing the 9860 hurdle decisively.

Next meaningful resistance would come around 10000, where a trendline adjoining recent tops on the hourly chart is placed.


Meanwhile, immediate support on the hourly chart is placed around 9820, with the stop-loss of which, trading longs should be held on to.

Wednesday, August 16, 2017

9860-9685 IS THE IMMEDIATE RANGE

9860-9685 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

After rising sharply on Monday, Dow and S & P 500 ended flat yesterday while Nasdaq ended marginally in the red.

Banking stocks, dollar and yields rose following the strong economic data. Retail sales jumped 0.6% in July, more than the expected increase of 0.4%. Retail sales for the month of June were revised upwards to reflect a 0.3% gain from a previously recorded 0.2% decline. Import prices rebounded after two straight months of declines, advancing 0.1%. The Empire State manufacturing index spiked to 25.2 in August from just 9.8 in July.

The benchmark 10-year yield rose to 2.26%. Dollar index rose about half a percent to 93.83.

Gold fell $11 to $1280 per ounce.

European markets gained 0.1%-0.4%

US markets had risen sharply on Monday after North Korean leader Kim Jong Un said he would wait for further action out of the U.S. before making a decision surrounding a missile strike on Guam.

AT HOME

Benchmark indices gained eight tenth of a percent on Monday, breaking 5-day losing streak. Sensex added 235 points to settle at 31449 while Nifty finished at 9794, up 83 points. BSE mid-cap and small-cap indices climbed 2.5% each. Except a 0.6% and 0.4% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Realty and Metal indices leading the tally, up 6% and 3.5% respectively.

FIIs net sold stocks and index futures worth Rs 1639 cr and 453 cr respectively but net bought stock futures worth Rs 571 cr. DIIs were net buyers to the tune of Rs 1619 cr.

Rupee appreciated 2 paise to end at 64.12/$.

India's wholesale inflation in July inched up to 1.88% from 0.90% in June due to an increase in foods articles and vegetable prices. Retail inflation too rose to 2.36% in July from 1.54% in June.

OUTLOOK

Today morning, Asian markets are trading mixed and SGX Nifty is suggesting a flattish start for our market.

In Monday's report we had mentioned that last week's close, 9711, also coincides with the 61.8% retracement level of the 9450-10140 upmove seen since 30th June and hence is an important support to eye.

We had also said that 9860, the 38.2% retracement level of the recent fall, which also coincides with the 34-DMA, is the immediate hurdle, a crossover of which is required for a fresh upmove. 

Nifty on Monday soared 83 points to settle at 9794.

9860 continues to be important immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 9965, the 61.8% retracement level of the recent fall, would be the next hurdle to eye.

9685, the bottom made last week, continues to be important support, a breach of which will open up the possibility of the retest of 9450 bottom made on 30th June.


Traders are advised to wait for the breach of 9860-9685 range, on either side, for taking a fresh directional view.

Monday, August 14, 2017

NIFTY AT CRUCIAL SUPPORT; 9860 IMMEDIATE HURDLE

NIFTY AT CRUCIAL SUPPORT; 9860 IMMEDIATE HURDLE

WORLD MARKETS                             

Dow and S & P 500 gained 0.1% each while Nasaq climbed 0.6% on Friday.

War of words between US and Korea continued with Trump's latest tweet "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely. Hopefully Kim Jong Un will find another path!".

US Consumer Price Index edged up 0.1% last month, versus expectations of a 0.2% gain. The CPI rose 1.7% compared to the previous year, which was a tad below the 1.8% expected.

Gold gained $4 to $1294 per ounce, their highest since June.

European markets, except a flat DAX, plunged 1.1%-1.6%.

For the week, US indices fell 1.1%-1.5% with the Dow and S & P 500 registering their second worst of the year. European markets nosedived 2.3%-2.7%. Asian markets tumbled 1.1%-3.5% with India leading the losses.

Over the weekend, North Korea claimed that more than 3 million volunteers had offered to join its army.

AT HOME

Mayhem was extended to fifth straight session as benchmark indices plunged a percent to close at nearly five-week low. Sensex slumped 318 points to settle at 31214 while Nifty finished at 9711, down 109 points. BSE mid-cap and small-cap indices however fell less at 0.2% and 0.04% respectively. BSE Metal index plunged 3.6%, becoming top loser among the sectoral indices, followed by 1.5% lower Auto index. Consumer Durable and Healthcare indices were the sole gainers, up 0.3% and 0.2% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1944 cr, 1408 cr and 88 cr respectively. DIIs were net buyers to the tune of Rs 2017 cr.

Rupee depreciated 5 paise to end at 64.13/$.

For the week, Sensex and Nifty lost and 3.4% and 3.5% respectively, marking the worst fall since the week ended 12th February, 2016.

SBI reported nearly three-fold jump in its consolidated profit at Rs 3,032 crore for the quarter ended June 2017 but asset quality including subsidiaries worsened further. NII fell 1.8% to Rs 19323 cr. Net interest margin declined sharply to 2.36% from 2.74% q-o-q. Gross NPA ratio increased 86 bps to 9.97% and net NPA ratio rose 78 bps to 5.97% on sequential basis. Consolidated gross slippages for the quarter stood at Rs 30,059 crore and watch list at Rs 24,444 crore (Rs 32,427 crore QoQ). Slippages from watchlist were at Rs 7,976 cr.

Sun Pharma disappointed with a consolidated loss of Rs 425 cr, dented by one-time loss of Rs 950 cr due to provision for settlement with certain plaintiffs. Revenue fell 24.8% to Rs 6209 cr. EBIDTA plunged 62.5% to Rs 1096 cr and margin halved to 17.6% from 35.4%.

Hindalco reported a fall of 1.6% in its June quarter net profit at Rs 290 cr, affected by one-time loss of Rs 104 cr. Revenue wa up 27.5% at Rs 10407 cr. Operating profit fell 2% to Rs 1148 cr and margin fell to 11.75% from 14.8%.

Cipla posted 21% rise in net profit to Rs 409 cr. Revenue fell 3% to Rs 3525 cr. EBIDTA margin improved 600 bps to 18.3%.

Bank of Baroda reported weak earnings and deterioration in asset quality. Net profit plunged 52% y-o-y to Rs 203 cr. NII rose 1% to Rs 3405 cr. Gross NPA ratio rose 94 bps q-o-q to 11.4% and net NPA ratio rose 45 bps to 5.17%. Slippages rose to a four-quarter high of Rs 5200 cr from Rs 4077 cr q-o-q.

OUTLOOK

Japanese economy grew at an annualized rate of 4% in the June quarter, topping the 2.5% rise forecast.

Today morning, except a 1% lower Nikkei, other Asian markets are trading with gains of 0.2%-1% and SGX Nifty is suggesting about 40 points higher start for our market.

Readers would recall that, we have been sounding a word of caution after Nifty soared nearly 6% in July and achieved the first major target of 10000, that we had given in our April 3rd report.

Nifty last week nosedived 3.5% to close at 9711, vindicating our caution.

After last week's cut, Nifty is at a crucial juncture. 9711 also coincides with the 61.8% retracement level of the 9450-10140 upmove seen since 30th June. A sustained trading below 9711 would open up the possibility of the retest of 9450 bottom. In that sense, 9685, the bottom made last week, is the important support, a breach of which might lead to above mentioned outcome.

Meanwhile, 9860, the 38.2% retracement level of the recent fall, which also coincides with the 34-DMA, is the immediate hurdle, a crossover of which is required for a fresh upmove.


Coal India will report its quarterly earnings today.

Friday, August 11, 2017

CRUCIAL SUPPORT LEVELS ON TEST

CRUCIAL SUPPORT LEVELS ON TEST

WORLD MARKETS                             

US indices nosedived 0.9%-2.1% as tensions between the United States and North Korea persisted.

After previously warning of "fire and fury" if North Korea persisted in threatening the U.S., Trump yesterday said his statement "wasn't tough enough." While he did not comment on what he meant by that statement, Trump said that North Korea should be "very, very nervous" if it "(did) anything in terms of even thinking about an attack."

Gold jumped more than a percent to its highest levels in more than two months on safe haven demand.

Dollar slipped on the back of weaker-than-expected U.S. producer prices.

Brent crude fell 1.5% to $51.90 a barrel and U.S. crude declined 2% to $48.59.

European markets tumbled 0.6%-1.4%. U.K.'s trade deficit rose in June due to a fall in exports. In France, industrial output contracted 1.1% on a monthly basis in June.

AT HOME
After plunging a percent and third, benchmark indices recouped some of the losses in last half an hour to end lower by nine tenth of a percent, extending the losing streak to fourth consecutive day and closing at one-month low. Sensex settled at 31531, down 267 points while Nifty lost 88 points to finish at 9820. BSE mid-cap and small-cap indices nosedived 2.6% and 2.9% respectively. Except a 0.6% and 0.1% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Realty index leading the tally, down 5.1%, followed by 3.2% lower Healthcare index.

FIIs net sold stocks worth Rs 1171 cr but net bought index futures and stock futures worth Rs 471 cr and 359 cr respectively. DIIs were net buyers to the tune of Rs 822 cr.

Rupee depreciated 25 paise to end at 64.08/$.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.6%-1.4% and SGX Nifty is suggesting about 100 points lower start for our market.

Nifty yesterday plunged all the way to 9776 before closing at 9820, achieving the 34-DMA target of 9840 and testing the 50-DMA placed around 9775.

A gap down opening today would take Nifty close to 9710, which is the 61.8% retracement level of the 9450-10140 upmove seen since June end. In the event of 9710 also not holding, one will have to be prepared for the retest of 9450 bottom.

9890, the top made yesterday, can now be considered immediate hurdle, with the stop-loss of which, existing shorts can be held on to.
                                                   
From the larger perspective, Nifty has never closed below the 50-DMA ever since the rally began in late December 2016. Currently 50-DMA is placed around 9775 and a close below it would not be a good sign and would make the overall structure weak.


SBI, BoB, BPCL, Bosch, Cipla, Hindalco and Sun Pharma will report their quarterly earnings today.

Thursday, August 10, 2017

NIFTY PLUNGES TOWARDS 34-DMA TARGET; TRAIL STOP-LOSS TO 10000

NIFTY PLUNGES TOWARDS 34-DMA TARGET; TRAIL STOP-LOSS TO 10000

WORLD MARKETS                             

US indices ended with cuts of upto 0.3% and safe haven assets jumped on US-North Korea tensions.

Trump, on Tuesday, warned North Korea about facing "fire and fury" if North Korea delivers more threats against the U.S. North Korea responded by saying it was "carefully examining" the idea of a missile strike on Guam, a U.S. Pacific territory.

Bond prices climbed with 10-year U.S. note yield falling 7 bps to hit its lowest level since June 28 and gold surging more than 1%. Swiss franc rose almost 1% against the U.S. dollar. The yield on the German government bond dropped to a six-week low.

Disney plunged 4% after quarterly sales missed expectations.

In economic news, productivity in the second quarter rose 0.9%, more than the expected gain of 0.7%. Mortgage applications rose by 3% last week, boosted by a drop in rates. Wholesale trade data showed inventories posted their biggest gain in six months.

Brent crude gained 1.1% to $52.70 a barrel and U.S. crude rose 0.8% to at $49.56.

European markets fell 0.6%-1.4%.

AT HOME

Benchmark indices tumbled seven tenth of a percent, extending the losing streak to third straight day and closing at a three-week low. Sensex slipped 216 points to close at 31798 and Nifty finished at 9908, down 70 points. BSE mid-cap and small-cap indices plunged 1.7% and 1.9% respectively. All the BSE sectoral indices ended in red with Healthcare and Industrial indices leading the tally, down 3.7% and 2.1% respectively.

FIIs net sold stocks worth Rs 841 cr but net bought index futures and stock futures worth Rs 420 cr and 151 cr respectively. DIIs were net buyers to the tune of Rs 553 cr.

Rupee depreciated 20 paise to end at 63.83/$.

Tata Motor's June quarter missed expectations. Consolidated profit, aided by one-time gain of Rs 3609 cr, rose 42% y-o-y to Rs 3200 cr. Consolidated revenue fell 9.6% to Rs 58651 cr. Operating profit was down 26.5% at Rs 5597 cr and margin contracted by 210 bps to 9.6%. JLR margin crashed to 7.9% from 12.6%.

Eicher Motors reported 29% jump in revenue at Rs 2254 cr. EBIDTA was up 32% at Rs 620 cr and PAT soared 22% to Rs 459 cr. Margin improved to 53.2% from 53%.

Aurobindo Pharma reported 2% dip in revenue at Rs 3679 cr. Margin eased to 22.4% from 23.6%. PAT fell 11% to Rs 518 cr.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 10 points lower start for our market.

Readers would recall that we had initiated a short-term bearish stance after immediate support of 10000 was taken out. In yesterday's report we had mentioned that 9944, the bottom made towards July end, is the immediate support below which 34-DMA, placed around 9830, would be the next target as well as the important support to eye.

Nifty broke 9944 support and plunged all the way to 9893, moving towards target mentioned above.

34-DMA, placed around 9840, continues to be important support to eye around which some profit in short positions should be booked.

Immediate resistance on the hourly chart is placed at 10000, which should serve as the stop-loss for short positions.


GAIL, BHEL, Bharat Forge and Motherson Sumi will report their quarterly earnings today.

Wednesday, August 9, 2017

9830 BELOW 9944; STAY SHORT WITH THE STOP-LOSS OF 10070

9830 BELOW 9944; STAY SHORT WITH THE STOP-LOSS OF 10070

WORLD MARKETS                             

US indices fell about a fifth of a percent with the Dow snapping a 10-day winning streak as Geopolitical tensions resurfaced.

President Trump warned North Korea, saying that threats will be "met with fire and fury" after revelations that Korea has successfully created a miniaturized nuclear weapon designed to fit inside its missiles.

US 10-year yield jumped to 2.28% after the jobs openings and labor turnover survey showed a record number of job openings for June.

St. Louis Fed President James Bullard said the central bank doesn't need to change rates in the near term because inflation is unlikely to rise significantly, despite improvements in the labor market.

European markets gained 0.1%-0.3% shrugging off weaker-than-expected trade data from China and Germany.

Just hours after Trump's warning, North Korea reportedly said it was "carefully examining" a plan to strike the U.S. Pacific territory of Guam with missiles.

AT HOME

Benchmark indices plunged eight tenth of a percent to close at the lowest level in nearly two weeks. Sensex lost 259 points to settle at 32014 while Nifty finished at 9979, down 79 points. BSE mid-cap and small-cap indices nosedived 1.2% and 1.3% respectively. Except a 1.6% and 0.3% higher Metal and Basic Material indices, all the BSE sectoral indices ended in red with Realty index leading the tally, down 4.5%, followed by 2.2% lower Oil & Gas index.

FIIs net bought stocks and stock futures worth Rs 1540 cr and 26 cr respectively but net sold index futures worth Rs 417 cr. DIIs were net buyers to the tune of Rs 799 cr. However, excluding Rs 2570 Bharti Infratel deal, FII's were net sellers.

Rupee appreciated 17 paise to end at 63.63/$.

OUTLOOK

Today morning, Nikkei is down more than a percent, other Asian markets are trading with cuts of 0.3%-0.7% and SGX Nifty is suggesting about 25 points lower start for our market.

After the immediate support of 10000 was taken out, we had said that 20-DMA is the next support to eye. Nifty yesterday touhced a low of 9947 before closing at 9978, breaching the 20-DMA support placed around 9970 intraday but managing to close above it.

9947, the bottom made yesterday, also coincides with the 9944 bottom made towards the end of July and therefore is the immediate support to eye. Below 9947, 34-DMA, placed around 9830, would be the next important support to eye.

Meanwhile, immediate resistance on the hourly chart is placed around 10070, with the stop-loss of which trading shorts should be held on to.


Tata Motors, Eicher Motors and Aurobindo Pharma will report their quarterly earnings today.