Friday, September 30, 2016

NIFTY NEARS 8540 TARGET AFTER BEING RESISTED AT 8800 HURDLE AND BREACH OF 8690 SUPPORT; VINDICATES OUR VIEW

NIFTY NEARS 8540 TARGET AFTER BEING RESISTED AT 8800 HURDLE AND BREACH OF 8690 SUPPORT; VINDICATES OUR VIEW

WORLD MARKETS                             

US indices plunged nearly a percent yesterday on concerns over Deutsche Bank's stability.

Deutsche Bank plunged 9% to $11.19, hitting an all-time intraday low before recovering some losses to end 6.7% lower on news report that about 10 hedge funds had cut their exposure to Deutsche Bank over concerns the German bank would be crippled by a potential $14 billion settlement with the U.S. Department of Justice over alleged mortgage derivatives misspelling.

The third — and final — read on second-quarter US GDP showed the U.S. economy grew at an annualized rate of 1.4%, slightly faster than previously estimated. Weekly jobless claims rose 3,000 to 254,000, slightly less than expected. Pending home sales fell 2.4% in August, marking the third straight monthly decline

European markets, except a 0.3% lower DAX, gained 0.3% to 1%, with FTSE on the top.

AT HOME

After gaining more than half a percent in the opening trade, Sensex and Nifty nosedived more than two and a half percent from the top of the day on escalating tension between India and Pakistan and finally settled lower by 1.6% and 1.8% respectively. This was the largest single day fall both the indices since 24th June. Sensex settled at 27828, down 465 points while Nifty lost 154 points to finish at 8591. BSE mid-cap and small-cap indices collapsed 3.6% and 4% respectively. All the BSE sectoral indices ended in red with Realty and Power indices leading the tally, down 6.3% and 4.1% respectively.

FIIs net bought stocks and index futures worth Rs 3413 cr and 876 cr respectively but net sold stock futures worth Rs 137 cr. DIIs were net buyers to the tune of Rs 1631 cr. FII cash figure however included Rs 3653 cr for ING Group NV's 2.5% stake sell in Kotak Mahindra Bank.

Rupee depreciated 39 paise to end at 66.85/$.

For the September derivative series, Nifty ended absolutely flat.

Director General of Military Operations Lt General Ranbir Singh told media in New Delhi that the Indian Army has conducted surgical strikes crossing the Line of Control (LoC) into Pakistan Occupied Kashmir inflicting significant damage to the terrorist infrastructure across the border The operations took place on Wednesday night and is now over, he added.  

OUTLOOK

China's September Caixin manufacturing PMI has come in at 50.1, up marginally from previous month's 50.

Today morning, except a flattish Shanghai, other Asian markets are trading with cuts of 1%-1.6% and SGX Nifty is suggesting about 40 points lower start for our market.

Readers would recall that for past couple of session we had been telling that 8690 was the important immediate support on the daily chart, a breach of which can take Nifty to 8540, the bottom made towards the end of August. In yesterday's report we had also mentioned that 8800 is the immediate hurdle on the hourly chart a sustained trading above which is required to bring bulls back in the game.

Yesterday, the benchmark, after touching a high of 8800, reversed on reports of "surgical strike", broke 8690 support and plunged all the way to 8558 before closing at 8591, vindicating our view.

A gap down opening today would take Nifty close to 8540 support. 8540 is also where a trendline adjoining major bottoms on daily chart lands a support and a close below 8540 can take Nifty all the way to 8300, which was the top made in June this year.


8750 is the immediate hurdle on the way up, until the crossover of which, near term bias would continue to be negative.

Thursday, September 29, 2016

8690-8800 IS THE IMMEDIATE RANGE

8690-8800 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

US indices gained 0.2%-0.6% yesterday as oil prices jumped amid reports that OPEC had reached a deal to cut production.

US oil rallied 5.3% to $47.05 and Brent soared 6% to $48.69 on the back of report that OPEC members had reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day, down slightly on Augusts’ output of 33.2 million barrels a day and that OPEC would finalize an output reduction plan at its official meeting on November 30.

Fed Chair Janet Yellen, in a prepared testimony to the House Financial Services Committee, said the central bank does not have a "fixed timetable" for raising rates. She also said that U.S. banks are well capitalized, but remain challenged by weak interest income.

In economic data news, U.S. durable goods orders for August came in unchanged versus an expected decline, but core capital goods orders rose for a third straight month.

European markets added 0.5%-0.8%, buoyed by a rally in Deutsche Bank shares and a strong performance in the basic resources stock sector. Shares of Deutsche Bank rebounded from all-time low levels after CEO John Cryan told a German newspaper that the bank did not need any government assistance or a capital increase.

AT HOME

After a flattish start, benchmark indices saw a sustained northward move through the session with Sensex and Nifty ending with gains of 0.25% and 0.45% respectively and breaking the three-day losing streak. Sensex added 39 points to settle at 8745 while Nifty finished at 8745, up 39 points. BSE mid-cap and small-cap indices soared 0.9% and 1% respectively. Except a 0.5% and 0.3% cut in Energy and IT indices respectively, all the BSE sectorla indices ended in green with Telecom and Metal indices leading the tally, up 2.3% and 1.9% respectively.

FIIs net bought stocks and index futures worth Rs 74 cr and 135 cr respectively but net sold stock futures worth Rs 357 cr. DIIs were net sellers to the tune of Rs 70 cr.

Rupee appreciated 2 paise to end at 66.46/$.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.2%-1.5% with Nikkei on the top and SGX Nifty is suggesting about 40 points higher start for our market.

After Nifty bounced back exactly from the 8690 support on Tuesday, in yesterday's report we had mentioned that 8800 is the immediate resistance, at least a crossover of which is required to bring bulls back in the game.

The benchmark added 39 points yesterday to end at 8745 and a higher opening today would take it closer to the 8800 hurdle mentioned above. A sustained trading above 8800 would generate a buy on the hourly chart and would pave the way for the further upside. 8893, the top made last week, would be the next target if that happens.


Meanwhile, traders would do well to wait for the breach of either 8690 support or 8800 resistance, for taking a fresh view on Nifty.

Wednesday, September 28, 2016

NIFTY ACHIEVES 8690 TARGET; 8800 IS THE IMMEDIATE HURDLE

NIFTY ACHIEVES 8690 TARGET; 8800 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices gained 0.6%-0.9% yesterday, despite a sharp fall in oil prices, on the back of the first presidential debate and a beat on consumer confidence.

Democratic candidate Hillary Clinton was seen as having an upper edge over her opponent Republican hopeful Donald Trump at the first U.S. presidential debate.

U.S. Consumer Confidence Index hit 104.1 in September, notably higher than the 99.0 print expected. The read was also the highest since the recession. The S&P CoreLogic Case-Shiller 20-City Composite index rose 5% y-o-y, slightly below the expected 5.1% increase. The September Markit Flash U.S. Services PMI showed expansion.

US crude fell 2.7% to $44.67 a barrel while Brent lost 3% to $45.97 as hopes for an output-limiting deal during an oil producer meeting in Algeria faded. 

Gold fell $14 to $1330 per ounce.

European markets fell 0.2%-0.4%.  Deutsche Bank shares hit a fresh all-time, weighing on European equities. Volkswagen shares fell on reports that the U.S. Department of Justice was calculating what criminal fine it could levy on the carmaker.

AT HOME

After gaining about half a percent in the initial trade, benchmark indices tumbled about seven tenth of a percent from the top of the day to end lower by a fifth of a percent, extending the losing streak to third straight day. Sensex settled at 28224, down 71 points and Nifty lost 17 points to finish at 8706. BSE mid-cap and small-cap indices however managed to end 0.1% higher. BSE Telecom and Capital Goods indices were the top losers among the sectoral indices, down 1.5% and 1.1% respectively while IT and Healthcare were the top gainers, up 0.7% and 0.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 155 cr, 356 cr and 17 cr respectively. DIIs were net buyers to the tune of Rs 91 cr.

Rupee appreciated 12 paise to end at 66.48/$.

OUTLOOK

Today morning Nikkei is down more than a percent and half as the yen has strengthened to around 100.20 against the dollar. Other Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting a marginally lower start for our market.

Readers would recall that after Nifty broke the immediate support of 8790 on Monday, we had been working with the downside target of 8690, which was the bottom made in mid-September.

The benchmark touched exactly that level yesterday before closing at 8706, achieving the target mentioned above and vindicating our view.

8690 is the important support to eye, a close below which would confirm a lower-top lower-bottom formation on the daily chart. 8540, the bottom made towards the End of August, would be the next support to eye if that happens.

Immediate resistance on the hourly chart has moved to 8800, at least a crossover of which is required to bring bulls back in the game.


Traders would do well to wait for the breach of 8690 for taking a fresh bearish view.

Tuesday, September 27, 2016

NIFTY NEARS 8690 TARGET AFTER BREACHING 8790 SUPPORT; 8810 IS THE IMMEDIATE HURDLE

NIFTY NEARS 8690 TARGET AFTER BREACHING 8790 SUPPORT; 8810 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices fell 0.9% each yesterday, keeping an eye on an informal OPEC meeting in Algeria and looked ahead to the first U.S. presidential debate. Financials and health care lead the losses.

US crude rose 3.3% to $45.93 a barrel and Brent added 3.2% to $47.35  after media reports cited the Algerian energy minister saying all options were possible for an output cut or freeze and that OPEC oil ministers will "not come out empty-handed" from the meeting.

European markets saw cuts of 1.3%-2.2%. Shares of Deutsche Bank plunged 7.5% to hit an all-time low after German Chancellor Angela Merkel had reportedly ruled out helping the bank with its U.S. legal troubles. 

Back in the US First televised debate between the two presidential candidates Hillary Clinton and Donald Trump is scheduled for 6.30 am IST.

AT HOME

After a modestly lower start, benchmark indices saw a sustained downward move through the session to end with deep cuts of nearly a percent and fourth. Sensex lost 374 points to settle at 28294 while Nifty finished at 8723, down 108 points. BSE mid-cap and small-cap indices lost half a percent each. BSE Realty index cracked 2%, becoming top loser among the sectoral indices, followed by 1.8% cut in Telecom index. Energy index gained 0.4%, followed by 0.1% each rise in Metal and Oil & Gas indices.

FIIs net sold stocks, index futures and stock futures worth Rs 206 cr, 1121 cr and 686 cr respectively. DIIs were net sellers to the tune of Rs 113 cr.

Rupee appreciated 5 paise to end at 66.60/$.

OUTLOOK

Today morning, Nikkei is down about half a percent, Hang Seng is up about half a percent and other Asian markets are trading in between. SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that "8790 continues to be the immediate support, a sustained trading below which would generate a sell on the hourly chart and can take Nifty to 8690".

The benchmark broke 8790 support in the first hour itself and plunged all the way to 8715 before closing at 8723.

8690, the bottom made in the middle of September, continues to be important support to eye, a close below which would confirm a lower-top lower-bottom formation on the hourly chart and would pave the way for further correction. 8540, the bottom made towards the end of August, would be the next downside target to eye if that happens.

8810 is the immediate hurdle on the hourly chart above which 8893, the top made last week, would be the bigger resistance to eye.


Traders can hold short positions with the stop-loss of 8810.

Monday, September 26, 2016

NIFTY SLIPS AFTER FAILING TO CROSS THURSDAY’S TOP; 8790 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY SLIPS AFTER FAILING TO CROSS THURSDAY’S TOP; 8790 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices fell 0.6%-0.7% on Friday to snap a three-day winning streak, with energy stocks leading the losses on the back of sharp fall in oil prices.

US oil tumbled 4% to settle at $44.48 per barrel on reports that Saudi Arabia doesn't see an output deal being reached at Monday's meeting in Algeria.

The September read on the Markit Manufacturing Flash PMI came in at 51.4, below the August read of 52.0.

The U.S. dollar rose slightly against a basket of currencies

European markets saw cuts of upto 1.2%. Euro zone PMI showed that business activity in the 19-country region fell to a near two-year low at 52.6 in September versus 52.9 in August and below market expectations.

For the week, Dow added 0.8% while Nasdaq and S & P 500 rose 1.2% each. European markets soared 3%-3.6%. Asian markets gained 1%-1.5%.

U.S. presidential nominees Hillary Clinton and Donald Trump are set to go head-to-head in their first debate on Monday in the U.S.

AT HOME

After trading in a narrow range for better part of the day, benchmark indices slipped sharply in the late noon trade to end lower by four tenth of a percent, breaking two-day winning streak. Sensex lost 105 points to settle at 28668 while Nifty finished at 8832, down 36 points. BSE mid-cap and small-cap indices however, gained 0.3% and 0.1% respectively. BSE Bankex was the top loser among the sectoral indices, down 1.2%, followed by 0.7% cut in Utillities index. Realty and Energy indices were the top gainer, up 1% and 0.9% respectively.

FIIs net sold stocks and stock futures worth Rs 300 cr and 349 cr but net bought index futures worth Rs 389 cr. DIIs were net buyers to the tune of Rs 496 cr.

Rupee appreciated 1 paise to end at 66.65/$.

For the week, Sensex and Nifty gained 0.2% and 0.6% respectively.   

The Goods and Services Tax Council, in its second day of meeting, has struck political consensus on the GST threshold limit which has been set at Rs 20 lakh. For North-Eastern and other small states, the limit is Rs 10 Lakh. If a trader's turnover is less than the threshold limit per annum, he won't be covered under the indirect tax reform. The financial year ending March 31, 2016 will be the base year for making revenue projection. The Council will meet again on September 30 to finalize draft rules on exemptions. It will meet between October 17-19 to discuss rates.

SEBI board meeting on Friday amended the regulations for infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) to facilitate their growth and allowed foreign portfolio investors (FPIs) to directly trade in debt markets.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 35 points lower start for our market.

In Friday's report we had mentioned that "Yesterday, Nifty, after a big gap-up opening at 8873, touched a high of 8893 in the initial trade, but failed to hold at higher level and finally settled at 8867. Usually, the first-hour high on a gap-up day works as the immediate hurdle and therefore one would want to see the crossover of 8893 as a proof of strength".

The benchmark, after touching a high of 8885, slipped to end at 8832 and is set to open lower today.

8790 continues to be the immediate support, a sustained trading below which would generate a sell on the hourly chart and can take Nifty to 8690. On the way up, 8893 continues to be immediate hurdle above which, 8970, the top made in early September, would be the bigger resistance to eye.


Traders are advised to keep stop-loss of 8790 in long positions.

Friday, September 23, 2016

STAY LONG WITH THE STOP-LOSS OF 8790

STAY LONG WITH THE STOP-LOSS OF 8790

WORLD MARKETS                             

US indices gained between 0.5%-0.8% amid rising oil and mixed economic data.

Economic data was mixed. Existing home sales for August fell 0.9%, as against the expectation for an increase of 1.3%. Leading indicators for August fell 0.2%. Weekly jobless claims fell to a two-month low.

US crude rose 2.2% to $46.32 and Brent added 1.8% to settle at $47.65 per barrel, extending the winning streak to third day.

Dollar index, after touching a low of 95.05, recovered to close at 95.37, the previous close being 95.44. Gold gained $13 to $1345 per ounce.

European markets climbed 1.1%-2.3% with the basic resources sector leading the gains as a weaker dollar after the Fed announcement helped the prices of commodities.

AT HOME

Benchmark indices soared 1% with Sensex and Nifty closing at the highest level since 9th September and 8th September respectively. Sensex added 266 points to settle at 28773 while Nifty finished at 8867, up 90 points. BSE mid-cap and small-cap indices climbed 1.4% and 1% respectively. Except a 0.4% and 0.1% cut in IT and Teck indices respectively, all the BSE sectoral indices ended in green with Finance and Oil & Gas indices leading the tally, up 1.6% and 1.5% respectively.

FIIs net bought stocks worth Rs 337 cr but net sold index futures and stock futures worth Rs 299 cr and 127 cr respectively. DIIs were net buyers to the tune of Rs 310 cr.

Rupee appreciated 35 paise to end at 66.66/$.

Aurobindo Pharma surged 6% on the back of announced that it has received the tentative approval for Dolutegravir 50mg from US Food & Drug Administration (USFDA). The drug is used for the treatment of HIV.

The Appointments Committee of the Cabinet yesterday announced the names of Monetary Policy Committee members, who will hold office for a period of four years. This includes Chetan Ghate, Associate professor - Economics & Planning Unit, Indian Statistical Institute; Pami Dua, Professor and Head of department at Delhi School of economics and Ravindra Dholakia, economics professor at IIT, Ahmadabad. The committee will also include the Reserve Bank Governor Urjit Patel and the deputy governor and an executive director. This comes just before the next central bank meet scheduled for October 4.

The first meeting of the newly constituted GST Council Centre and states agreed on a timetable for deciding on the tax rate and completion of legislative work but differences remained on the turnover limit for exemption from the new tax.

OUTLOOK

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

Yesterday, Nifty, after a big gap-up opening at 8873, touched a high of 8893 in the initial trade, but failed to hold at higher level and finally settled at 8867. Usually, the first-hour high on a gap-up day works as the immediate hurdle and therefore one would want to see the crossover of 8893 as a proof of strength. Meanwhile, 8970, the top made in early September, continues to be the upside target to eye.


8790 is now the immediate support on the hourly chart, with the stop-loss of which trading longs can be held on to.

Thursday, September 22, 2016

WORLD EQUITIES CHEER BOJ, FED OUTCOME; NIFTY SET TO CHALLENGE 8860 HURDLE

WORLD EQUITIES CHEER BOJ, FED OUTCOME; NIFTY SET TO CHALLENGE 8860 HURDLE

WORLD MARKETS                             

US indices soared 0.9%-1.1% after the Federal Reserve kept interest rates unchanged but hinted at the possibility of one rate hike later this year. The Nasdaq composite hit a fresh all-time intraday high, and closed at a new all-time high.

In its post-meeting statement, Fed expressed confidence in economic growth, but not enough to make a move this month. They also lowered their expectations for rate hikes in the years ahead, suggesting two hikes in 2017 and three each in 2018 and 2019.

Dollar index, after touching a high of 96.33, eased to end at 95.50, the previous close being 96. Gold rose $13 to $1335 an ounce.

US oil climbed nearly 3% to $45.34 after data from the U.S. Energy Information Administration (EIA) showed crude inventories fell 6.2 million barrels in the previous week, compared to expectation of a 3.4 million build. Brent rose 2% to $46.83.

European markets saw gains of upto 0.9%

Earlier, Nikkei soared nearly 2% and yield on the 10-year Japanese government bond rose into positive territory for the first time since March after the Bank of Japan announced it would change policy, abandoning its monetary base target in favor of targeting the yield curve for Japanese bonds. It held the deposit rate unchanged at -0.1% and said it would maintain its program of bond purchases.

AT HOME

After gaining more than half a percent in the morning session, benchmark indices gave away all the gains in the noon trade to end little changed. Sesex settled at 28507, down 16 points while Nifty rose 1 point to finish at 8777. BSE mid-cap index lost 0.1% but the small-cap index added 0.2%. BSE Telecom index was the top gainer among the sectoral indices, rising 1.5%, followed by 0.8% rise in Consumer Durable index. FMCG and Power indices fell 0.6% and 0.2% respectively, becoming top losers.

FIIs net bought stocks and index futures worth Rs 184 cr and 444 cr respectively but net sold stock futures worth Rs 502 cr. DIIs were net sellers to the tune of Rs 231 cr.

Rupee depreciated 1 paise to end at 67.01/$.

India’s current account deficit (CAD) narrowed sharply to just USD 300 million, or 0.1% of GDP, in the June quarter, driven by lower trade deficit on deeper import contraction. CAD had stood at a high of USD 6.1 billion, or 1.2% of GDP, in the year-ago period.

IDFC Bank, DCB Bank and Torrent Power will be included in the derivative segment of NSE from September 30.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.4%-1.4% with Hang Seng on the top and SGX Nifty is suggesting about 50 points higher start for our market.

Yesterday, Nifty, after touching a high of 8827, eased to end at 8777, extending the consolidation within the 8690-8860 range we have been talking for past couple of days.

A gap up opening today would take the benchmark back near the high made yesterday.

8860, the upper level of the gap created by the big gap-down opening last Monday, continues to be immediate hurdle to eye, above which 8970, the top made earlier this month, would be the next big resistance to eye. 8690, the bottom made last week, continues to be important immediate support.


Meanwhile, 8750 is where a double-bottom on the hourly chart is placed and traders can use this level as the stop-loss in long positions once they are initiated if Nifty is able to take out 8960 hurdle.