Friday, December 2, 2016

NIFTY RETREATS AFTER NEARLY ACHIEVING 8260 TARGET; 8120 IS THE IMMEDIATE SUPPORT

NIFTY RETREATS AFTER NEARLY ACHIEVING 8260 TARGET; 8120 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow gained 0.4% but S & P 500 and Nasdaq lost 0.4% and 1.4% respectively as decline in technology offset a rally in financials.

WTI oil extended Wednesday's 9% surge by adding another 3.3% to close at $51.06 a barrel while Brent climbed 4.1% to $53.94. For Brent, this was a 16-month high while WTI hit a 6-week high.

Initial jobless claims came in at 268,000, above an expected 253,000. The ISM manufacturing index for November came in at 53.2, while construction spending for October rose 0.5%. The IHS Markit U.S. Manufacturing index reading for November came in at 54.1.

US treasury yields extended the upmove with the benchmark 10-year note yield at 2.4417% and the two-year note yield around 1.147%. Dollar index slipped half a percent. Gold fell $4.50 to $1169 per ounce.

European markets fell 0.2%-1%. Sterling climbed above $1.13 after David Davis, the U.K.'s Brexit secretary, said the government would assess whether to keep paying into the EU budget to keep its access to the single market.

AT HOME

Benchmark indices ended lower by four tenth of a percent after a choppy session, breaking the four-day winning streak. Sensex lost 93 points to settle at 26560 while Nifty finished at 8193, down 32 points. BSE mid-cap and small-cap slipped 1.2% and 0.6% respectively. BSE Metal and Power indices tumbled 1.7% and 1.6% respectively, becoming top gainers among the sectoral indices while Healthcare and FMCG indices were the top gainers, up 0.3% and 0.2% respectively.

FIIs net sold stocks worth Rs 403 cr but net bought index futures and stock futures worth Rs 708 cr and 304 cr respectively. DIIs were net buyers to the tune of Rs 238 cr.

Rupee appreciated 4 paise to end at 68.34/$.

India's Nikkei/Markit Manufacturing PMI fell to 52.3 in November from October's 54.4, its biggest month-on-month decline since March 2013.

Maruti Suzuki reported better-than-expected 12.2% y-o-y growth in November sales at 1.35 lakh units. Eicher sold 41% higher Royal Enfield at 57313 units however CV sales were down 12.7% at 3176 units. Ashok Leyland sales were up 7% at 9574 units. M & M however reported 22% dip in total sales at 32499 units. Tractor sales for the company were down 21% at 17262 units. Tata Motors sales were flat at 38900 units. TVS Motors sales too were flat at 2.25 lakh units. Hero Motocorp sales dipped 12.9% to 4.79 lakh units.

Telecom stocks tumbled after the announcement that Reliance Jio will be offering free services to existing and new customers through its 'Happy New Year' offer until March 31.

The Reserve Bank of India (RBI) yesterday capped banks’ exposure limit to a single entity to 20% and that to a business group at 25%.

The CBDT has clarified that there would be no seizure of gold jewellery and ornaments if the holding is limited to 500 grams per married woman, 250 grams per unmarried woman and 100 grams per male in the family.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.2%-0.9% and SGX Nifty is suggesting about 50 points lower start for our market.

Just to reiterate, we have been working with targets of 8180, 8260 and 8340, which are the 38.2%, 50% and 61.8% respectively of the recent 8600-7916 fall, after Nifty generated a buy on hourly chart by crossing immediate hurdle of 8085.

The benchmark yesterday touched a high of 8251 before closing at 8193, nearly achieving the middle target mentioned above.

A gap down opening today would take Nifty close to 8150 mark.

Immediate support on the hourly chart has moved up to 8120, which should serve as the fresh stop-loss for trading longs. 8251, the top made yesterday is the immediate hurdle above which 8340 would be the next major target as well as resistance to eye.


US non-farm payroll data for November will be out today where addition of 175,000 is expected which is slightly above October's 161K, while the unemployment rate is expected to remain unchanged at 4.9%.

Thursday, December 1, 2016

OIL SOARS AFTER OPEC DEAL; NIFTY MOVES CLOSER TO 8260 TARGET

OIL SOARS AFTER OPEC DEAL; NIFTY MOVES CLOSER TO 8260 TARGET

WORLD MARKETS                             

Dow closed flat while S & P 500 and Nasdaq lost 0.3% and 1% yesterday as gains energy were offset by fall in utility stocks.

US crude soared 9.3% to $49.21 per barrel after OPEC agreed to cut production by approximately 1.2 million barrels per day, or about 4.5% of current production. This is the first output cut deal since 2008.

Data from ADP and Moody's analytics showed US private companies added 216,000 jobs in November, well above the expected 165,000. Consumer spending rose 0.3% in October, while personal income gained 0.6%, the best showing since April. The Chicago PMI index reading for November came in at 57.6, well above an October reading of 50.6. Pending home sales rose 0.1% month over month in October and 1.8% year over year, in line with expectations.

Dollar index rose about half a percent to 101.53, breaking four-day losing streak. US treasuries fell, with the two-year note yield rising to 1.11% and the benchmark 10-year note yield at 2.38%. Gold fell $17 to $1174 per ounce, marking a near 10-month low.

European markets gained 0.2%-2.2% with Italy on the top. Italy is scheduled to hold a referendum on Sunday in which citizens will vote in a referendum on whether to overhaul their national constitution. Eurozone flash inflation for November came in at 0.6%, meeting expectation.

AT HOME

Benchmark indices soared a percent yesterday, extending the winning streak to fourth straight day and closing at the highest level since 11th November. Sensex climbed 259 points to settle at 26653 while Nifty finished at 8224, up 82 points. BSE mid-cap and small-cap indices gained 1.1% and 1.3% respectively. All the BSE sectoral indices ended in green with Consumer Durable index and Bankex leading the tally, up 2.5% and 2.2% respectively.

FIIs net sold stocks worth Rs 434 cr but net bought index futures and stock futures worth Rs 659 cr and 371 cr respectively. DIIs were net buyers to the tune of Rs 677 cr.

Rupee appreciated 27 paise to end at 68.38/$.

India’s economy grew 7.3% in July to September, marginally quicker than the previous quarter’s 7.1%, but below the estimated 7.5% mark.

The fiscal deficit for the April-October period came in at Rs 4.2 lakh crore against Rs 4.1 lakh crore on a year on year basis. The deficit figure for the first seven months of this fiscal year was 79.3% of Rs 5.34 Lakh crore FY17 Budget target.

OUTLOOK

China's November manufacturing PMI has come in at 51.7, up from 51.2 in October. The Services PMI has edged up to 54.7 from 54.

Asian markets are trading with gains of 0.4%-1.8% with Nikkei leading the gains and SGX Nifty is suggesting a flattish start for our market.

After Nifty generated a "buy" on the hourly char by crossing the immediate hurdle of 8085, we have been working with upside targets of 8180, 8260 and 8340 which are the 38.2%, 50% and 61.8% respectively of the recent 8600-7916 fall.

The benchmark yesterday touched a high of 8234, nearly achieving the middle target of the three targets mentioned above. 8260 continues to be next target to eye above which 8340 would be the bigger hurdle as well as the milestone to watch.

Immediate support on the hourly chart has moved up to 8110, which should serve as the stop-loss for trading longs.


Auto companies will report November sales figures today.

Wednesday, November 30, 2016

NIFTY ACHIEVES 8180 TARGET; TRAIL STOP-LOSS TO 8060

NIFTY ACHIEVES 8180 TARGET; TRAIL STOP-LOSS TO 8060

WORLD MARKETS                             

US indices gained 0.1%-0.2% yesterday supported by gains in healthcare and real estate stocks while energy stocks fell tracking steep decline in oil ahead of OPEC meeting.

WTI and Brent crude tumbled 3.9% each to $45.38 and $46.38 a barrel respectively amid fresh uncertainties over an OPEC deal to reduce production levels

The second read on US third-quarter GDP came in at an annualized rate of 3.2%, above a previous reading of 2.9%. S&P Core Logic Case-Shiller index showed U.S. home prices gained 5.5% in September. The Consumer confidence index for November came in at 107.1, well above expectations.

Dollar index slipped about 0.3%. Treasuries gained with the two-year note yield trading at 1.099% and the benchmark 10-year yield around 2.302%. Gold fell $3 to $1189 per ounce.

European markets, except a 0.4% lower FTSE, gained 0.4%-2.1% with Italy on the top. Banking stocks gained following news that the European Central Bank stands ready to increase its purchase of Italian government bonds to control any market turbulence following Sunday's referendum. Basic resources stocks were the worst performers with a slide in metal prices.

AT HOME

After rising about nine tenth of a percent, benchmark indices gave away large part of the gains in the late noon tumble to end just modestly higher. Sensex added 44 points to settle at 26394 while Nifty finished at 8142, up 15 points. BSE mid-cap and small-cap indices gained half a percent each. BSE Auto and Telecom indices climbed 2.2% and 2% respectively, becoming top gainers among the sectoral indices while IT and FMCG indices were the top losers, down half a percent each.

FIIs net sold stocks worth Rs 715 cr but net bought index futures and stock futures worth Rs 615 cr and 833 cr respectively. DIIs were net buyers to the tune of Rs 534 cr.

Rupee appreciated 11 paise to end at 68.65/$.

The Lok Sabha yesterday passed the Taxation Laws (Second Amendment) Bill, which amends the Income-tax Act, 1961, and the Finance Act, 2016.

Rating agency Fitch lowered India's GDP growth forecast for this fiscal to 6.9% from 7.4%, saying there will be "temporary disruptions" to economic activity post demonetisation.

OUTLOOK

Today morning, except a modestly lower Shanghai, other Asian markets are trading with gains of upto 0.9% and SGX Nifty is suggesting about 15 points higher start for our market.

In yesterday's report we had reiterated the view that Nifty continues to be in the buy mode on the hourly chart and that 8180, the 38.2% retracement level of the recent 8600-7916 fall, is the first upside target to eye above which 8260 and 8340, the 50% and 61.8% retracement levels of the aforementioned upmove, would be the subsequent levels to watch.

The benchmark touched a high of 8197 before closing at 8142, achieving the first target mentioned above.

8197, the top made yesterday, is the immediate hurdle above which 8260, as mentioned above, would be the next target to eye.

Immediate support on the hourly chart has moved up to 8060, with the stop-loss of which trading longs can be held on to.

India's Q2 FY17 GDP figure will be released today and is expected to show a growth of 7.5%.


Ministers from the 14-nation cartel, OPEC, are slated to meet in Vienna today to announce a decision on output curbs proposed in September. In September, OPEC had outlined a deal to cut output by approximately 1 million barrels per day and failure to reach a deal for production cuts could see oil prices decline further. 

Tuesday, November 29, 2016

8020 IS THE IMMEDIATE SUPPORT; 8180, 8260 UPSIDE TARGETS

8020 IS THE IMMEDIATE SUPPORT; 8180, 8260 UPSIDE TARGETS

WORLD MARKETS                             

US indices fell 0.3%-0.6% yesterday with Dow and S & P 500 breaking four-day winning streak. The Russell 2000, which is composed of small-cap stocks, closed about 1.3% lower, snapping a 15-day winning streak, its longest in 20 years.

Dollar index eased to 101.16 from 101.50. U.S. Treasuries rose with the two-year note yield falling to 1.107% and the benchmark 10-year yield trading lower at 2.314%. Gold rose $12 to $1191 per ounce.

US crude climbed 2.2% to $47.08 a barrel and Brent added 2.1% to $48.24 after the Iraqi oil minister said Iraq will cooperate with other OPEC members to reach a deal.

European markets lost 0.6%-1.8% with Italy leading the losses on worries that the upcoming referendum in Italy could potentially lead to the fall of the Italian government and raise possible concerns over the recapitalization of the banking system.

AT HOME

After starting about half a percent lower, benchmark indices recouped all the losses and more through the choppy session to end with modest gains. Sensex settled at 26350, up 34 points while Nifty added 13 points to finish at 8127. BSE mid-cap and small-cap indices gained 1% and 0.7% respectively. BSE Telecom index soared 4%, becoming top gainer among the sectoral indices, followed by 1.9% rise in Realty index. Consumer Durable index and Bankex were the top losers, giving away 1.2% each.

FIIs net sold stocks and index futures worth Rs 1436 cr and 123 cr respectively but net bought stock futures worth Rs 753 cr. DIIs were net buyers to the tune of Rs 1234 cr.

Rupee depreciated 30 paise to end at 68.76/$.

Government yesterday moved “The Taxation Laws (Second Amendment) Bill, 2016" in the Parliament to allow for the taxation of unaccounted money declared post demonatisation. Proposals include levy a total tax, penalty and surcharge of 50% on the amount deposited post demonetisation while higher taxes and stiffer penalty of up to 85% await those who don't disclose but are caught.

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 said that Nifty had generated "Buy" on hourly chart by crossing immediate hurdle placed at 8085 and that 8180, the 38.2% retracement level of the recent 8600-7916 fall, is the first upside target to eye above which 8260 and 8340, the 50% and 61.8% retracement levels of the aforementioned upmove, would be the subsequent levels to watch. We had also advised holding on to trading longs with the stop-loss of 8000.

The benchmark, after touching a low of 8066 in the opening session, rebounded to end at 8126.

8180 continues to be first upside target to eye above which 8260 and 8340, as mentioned above would be the subsequent milestones to watch.

Immediate support on the hourly chart has moved up to 8020, with the stop-loss of which trading longs should be held on to.


Tata Power will report its quarterly earnings today.

Monday, November 28, 2016

STAY LONG WITH THE STOP-LOSS OF 8000

STAY LONG WITH THE STOP-LOSS OF 8000

WORLD MARKETS                             

US indices gained about four tenth of a percent on Friday to close at fresh record high.

U.S. trade deficit totaled $62 billion in October. The November read on the IHS Markit non-manufacturing index came in at 54.7, marginally lower than the October read of 54.8.

US oil fell 3.1% to $46.48 and Brent lost 3.6% to $47.25 a barrel as Saudi Arabia announced it will not attend talks on Monday with non-OPEC producers to discuss supply cuts.

US 10-year note yield held at 2.372% while the dollar index fell 0.2%. Gold fell $11 to $1178 per ounce.

European markets ended with modest gains.

For the week US indices added almost 1.5% each, extending the winning streak to third straight week. In Europe FTSE and CAC climbed 1% each while DAX was up 0.3%. In Asian, Nikkei and Shanghai soared 2.3% and 2.2% respectively while Hang Seng rose 1%.

AT HOME

After a modestly higher start, Sensex and Nifty kept on moving higher through the session to end with mammoth gains of 1.8% and 1.9% respectively, marking the biggest daily gain since 18 October and 25th May respectively. Sensex soared 456 point to settle at 26316 while Nifty finished at 8114, up 150 points.  BSE mid-cap and small-cap indices added 1.3% and 2% respectively. All the BSE sectoral indices ended in green with IT and Teck indices leading the tally, up 4.7% and 3.8% respectively.

FIIs net sold stocks worth Rs 373 cr but net bought inex futures and stock futures worth Rs 638 cr and 1034 cr respectively. DIIs were net buyers to the tune of Rs 998 cr.

Rupee appreciated 27 paise to end at 68.46/$.

For the week, Sensex and Nifty gained 0.6% and 0.5% respectively, breaking four-week losing streak.

The government released the revised draft Goods & Services Tax (GST) Compensation Law for public as well as the revised IGST Law after incorporating suggestions from industries. Government officials have said that these bills will tabled in the Parliament during 5-9 December.

With a move to managing the excess liquidity in the system banking regulator Reserve Bank of India announced that it would absorb a part of this extra cash by applying an incremental cash reserve ratio (CRR) as a purely temporary measure. On the increase in NDTL between September 16, 2016 and November 11, 2016, scheduled banks shall maintain an incremental CRR of 100%, effective the fortnight beginning November 26, 2016. This move is expected to suck out around Rs 3.3 lac cr from the banking system.

OUTLOOK

Today morning, except a half a percent lower Nikkei, other Asian markets are trading with gains of 0.3%-0.8% but SGX Nifty is suggesting about 40 points lower start for our market.

In Friday's report we had reiterated the view that 8085 continues to be immediate hurdle, a crossover of which would generate a buy ont he hourly chart and would pave the way for the further upmove.

The benchmark crossed this hurdle on Friday and touched a high of 8122 before closing at 8114 but is set to open lower today.

8180 the 38.2% retracement level of the recent 8600-7916 fall, is the first upside target to eye above which 8260 and 8340, the 50% and 61.8% retracement levels of the aforementioned upmove, would be the subsequent levels to watch.


Immediate support on the hourly chart is placed around 8000, with the stop-loss of which trading longs should be held on to.

Friday, November 25, 2016

NIFTY SHEDS 7.5% IN NOVEMBER SERIES; 7900-8085 CONTINUES TO BE IMMEDIATE RANGE

NIFTY SHEDS 7.5% IN NOVEMBER SERIES; 7900-8085 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS                             

US markets were shut yesterday for the Thanksgiving holiday.

European markets, except a 0.2% lower Italy, gained upto 0.3%. The German Ifo Business Climate Index stood at 110.4 points in November, unchanged from the previous month but below forecasts.

Dollar index ended almost flat at 101.69.

WTI and Brent crude rose 0.1% each to $47.92 and $49 a barrel respectively.

AT HOME

After a choppy session, which is customary for an expiry day, benchmark indices ended with cuts of about eight tenth of a percent, breaking the two-day winning streak. Sensex lost 192 points to settle at 25860 while Nifty finished at 7966, down 68 points. BSE mid-cap and small-cap indices fell 0.1% each. BSE Bankex and Auto indices tumbled 1.4% and 1.3% respectively, becoming top gainers among the sectoral indices while IT and Metal indices added 1.2% each, becoming top gainers.

FIIs net sold stocks, index futures and stock futures worth Rs 2010 cr, 1563 cr and 1153 cr respectively. DIIs were net buyers to the tune of Rs 1648 cr.

Rupee depreciated 17 paise to end at 68.73/$.

For the November derivative series, Nifty lost 7.5%, marking the biggest loss in a series since August 2013.

OUTLOOK

Today morning Asian markets are trading with gains of upto 0.7% and SGX Nifty is suggesting about 20 points higher start for our market.

As we have been mentioning for couple of days, 7900, the 50% retracement level of the entire 6825-8970 upmove, is the immediate support to eye, upon breach of which next meaningful  to eye would be 7650, the 61.8% retracement level.


8085 continues to be immediate hurdle, a crossover would confirm a "buy" on hourly chart after a long time and would pave the way for the further upmove.

Thursday, November 24, 2016

7900-8085 CONTINUE TO BE IMMEDIATE BOUNDARIES

7900-8085 CONTINUE TO BE IMMEDIATE BOUNDARIES

WORLD MARKETS                             

Dow and S & P 500 gained 0.3% and 0.1% respectively Nasdaq lost 0.1% digested a number of economic data, including minutes from the Federal Reserve's November meeting.

Minutes backed the consensus view that the central bank is poised to raise rates in December. Weekly jobless claims increased 18,000 to a seasonally adjusted 251,000 for the week ended Nov. 19. That said, claims have now been below 300,000, a threshold associated with a healthy labor market, for 90 straight weeks. U.S. durable goods increased 4.8% in October, well above a 1.5% consensus estimate.  IHS Markit manufacturing index for November showed a slight increase to 53.9 from 53.4 in October. New home sales for October fell 1.9%, while consumer sentiment came in at 93.8, above a 91.6 estimate.

Dollar index soared to 101.71 from previous day's 101 level, touching a fresh 13 1/2 year high. Gold fell $22 to $1189 per ounce, marking a nine-month low.

US crude rose 0.4% to $48.22 and Brent gained 0.3% to $49.27 after data from the U.S. Energy Information Administration showed crude inventories fell 1.3 million barrels in the week to Nov. 18, compared with market expectations for a build of 671,000 barrels.

European markets, except a marginally higher Italy, lost upto 0.5%. Euro zone composite purchasing managers' index (PMI) for November came in at 54.1, the highest since December 2015 and up from 53.3 in October. The U.K. government cut its growth forecast for 2017 from 2.2% to 1.4% and for 2018 from 2.1% to 1.7%.

AT HOME

Benchmark indices added four tenth of a percent yesterday, extending the winning streak to second straight day. Sensex settled at 26052, up 91 points while Nifty rose 31 points to finish at 8033. BSE mid-cap and small-cap indices climbed 1.2% and 1.5% respectively. Except a marginally lower Finance and Telecom indices, all the BSE sectoral indices closed higher, with Realty and Metal indices leading the tally, up 3.4% and 2.3% respectively.

FIIs net sold stocks and index futures worth Rs 1023 cr and 55 cr respectively but net bought stock futures worth Rs 1458 cr. DIIs were net buyers to the tune of Rs 1255 cr.

Rupee tumbled 31 paise to close at fresh nine-month low of 68.56/$.

With several states suggesting changes in the model GST and compensation laws, the GST Council meeting scheduled for November 25 has been postponed to December 2-3. The officers' committee of both the Centre and states, however, will meet on November 25 to finalise the three draft legislations -- CGST, IGST and compensation law. These will be placed in public domain for stakeholders' comments. 

SBI cut bulk deposit rates by 1.25%-1.9%.

OUTLOOK

Today morning Nikkei, after yesterday’s break, has opened higher by about a percent but other Asian markets are trading with cuts of upto 0.8% and SGX Nifty is suggesting about 40 points lower start for our market.

In yesterday's report we had reiterated the view that 7900, the 50% retracement level of the 6825-8970 upmove, continues to be immediate support to eye, upon breach of which, next meaningful support will come only at 7650, which is the 61.8% retracement level of this upmove. We had also said that the immediate resistance on the hourly chat has moved lower to 8085, a crossover of which is required for the fresh upmove.

Yesterday, the benchmark, after touching a high of 8055, retreated to end at 8033 and is set to open around 8000 today.

8085 continues to be immediate hurdle, a crossover of which is required to generate a buy on the hourly chart which in turn would pave the way for the fresh upmove.

Traders should keep a stop-loss of 8085 for short positions.


U.S. markets will be closed today for the Thanksgiving holiday and open for a half-day on Friday.