Monday, March 27, 2017

NIFTY RESISTED NEAR 9130 HURDLE; 9019 IS THE IMMEDIATE SUPPORT

NIFTY RESISTED NEAR 9130 HURDLE; 9019 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow and S & P 500 fell 0.3% and 0.1% respectively while Nasdaq gained 0.2% on Friday after media reports that the House pulled a key health care vote that was seen as crucial for President Donald Trump's agenda. Material stocks lagged while health care sector turned positive following the news.

Trump had warned House Republican lawmakers on Thursday that he is prepared to leave Obamacare unchanged and move on to tax reform if they do not vote in favor for new health-care legislation on Friday.

Durable goods orders rose 1.7% in February, above the expected increase of 1.2%. The IHS Markit manufacturing PMI, meanwhile, hit a five-month low of 53.4.

The dollar traded marginally lower. Treasuries rose, as the benchmark 10-year note yield dipped below 2.4%.

European markets closed mixed with modest changes. The composite Purchasing Managers Index (PMI) for the euro zone came in stronger-than-anticipated, rising to 56.7 from 56.0. The flash reading represents the highest first quarter average in six years.

For the week US indices fell 1.2%-1.5%. In Europe, FTSE fell 1.2% while CAC and DAx were down 0.2% and 0.3% respectively. In Asia, Nikkei was down 1.3% but Shanghai and Hang Seng gained 1% and 0.2% respectively.

A joint committee of ministers from OPEC and non-OPEC oil producers agreed on Sunday to review whether a global pact to limit supplies should be extended by six months.

AT HOME

After rising half a percent through the session, benchmark indices gave away half of the gains in last 45 minute dip to end higher by a fourth of a percent. Sensex added 89 points to settle at 29421 while Nifty finished at 9108, up 22 points. BSE mid-cap index ended marginally lower while small-cap index gained 0.4%. BSE Bankex climbed 1.2%, becoming top gainer among the sectoral indices, followed by 0.9% rise in Finance index. IT and Teck indices were the top losers, down 0.8% and 0.7% respectively.

FIIs net bought stocks worth Rs 543 cr but net sold index futures and stock futures worth Rs 316 cr and 81 cr respectively. DIIs were net buyers to the tune of Rs 117 cr.

Rupee appreciated 16 paise to end at 65.41/$.

SEBI banned Reliance Industries and 12 others from equity derivatives trading for one year and directed the firm to disgorge nearly Rs 1,000 crore for alleged fraudulent trading in a 10-year-old case. The company said it will appeal against the order.

For the week, Sensex and Nifty lost 0.6% and 0.8% respectively, breaking two-week winning streak.

OUTLOOK

Today morning, except a marginally higher Shanghai, other Asian markets are trading with cuts of 0.2%-1.5% with Nikkei leading the losses. SGX Nifty is suggesting about 25 points lower start for our market.

In Friday's report we had mentioned that "9120-9130 continues to be immediate resistance area, a sustained trading above which is required to generate a buy on the hourly chart". The benchmark, after touching a high of 9134, retreated to end at 9108 and is set to open lower today.


9130 continues to be immediate hurdle, a decisive crossover of which is required to generate a fresh buy on the hourly chart. 9218, the top made on 17th March, would be th next target in that case. On the way down, 9019, the bottom made last week, is the immediate support, below which 34-DMA, placed around 8930, would be the next support to eye.

Friday, March 24, 2017

9120 CONTINUES TO BE IMMEDIATE HURDLE; 8975 IMPORTANT SUPPORT

9120 CONTINUES TO BE IMMEDIATE HURDLE; 8975 IMPORTANT SUPPORT

WORLD MARKETS                             

US indices ended marginally lower as U.S. President Donald Trump failed to close the deal with Republican lawmakers on how to dismantle Obamacare and the House vote was delayed.

Weekly jobless claims rose by 15,000 to 258,000, above the expected print of 240,000. New home sales hit a seven-month high last month, rising 6.1% to a seasonally-adjusted annual rate of 592,000, topping expectations.

WTI crude fell about a percent to $47.63 a barrel on continued concerns about that the OPEC-led supply cuts were not enough as U.S. stockpiles continue to rise.

European markets gained 0.2%-1.1% with Italy on the top. U.K. retail sales rebounded in February after three month decline, rising 1.4%.

AT HOME

After a positive start, benchmark indices added some more gains through the session to end with gains of six tenth of a percent, breaking the three-day losing streak. Sensex added 164 points to settle at 29332 while Nifty finished at 9086, up 56 points. BSE mid-cap and small-cap indices gained 1% and 0.9% respectively. Except a 0.1% lower FMCG index, all the BSE sectoral indices ended in green with Utilities index leading the tally, up 1.3%, followed by 1.2% rise in Energy, Industrial and Oil & Gas indices.

FIIs net bought stocks and index futures worth Rs 1094 cr and 101 cr respectively but net sold stock futures worth Rs 232 cr. DIIs were net sellers to the tune of Rs 591 cr.

Rupee depreciated 6 paise to end at 65.5650/$.

OUTLOOK

Today morning, except a 1% higher Nikkei, other Asian markets are trading little changed and SGX Nifty is suggesting about 10 points higher start for our market.

After Nifty broke immediate support of 9045, we had said that 8975, the lower level of the big gap up opening witnessed after the assembly election result, is the next support to eye while 9120 is the immediate hurdle on the hourly chart, which should serve as the stop-loss for trading shorts.

The benchmark, after touching a low of 9019 on Wednesday, rebounded yesterday to 9086 and is set to open around 9100 today.

9120-9130 continues to be immediate resistance area, a sustained trading above which will generate a buy on the hourly chart and next target to eye in that case would be 9218, the top made last week.


8975 continues to be important support to eye.

Thursday, March 23, 2017

8975 IS THE NEXT SUPPORT; 9120 IMMEDIATE HURDLE

8975 IS THE NEXT SUPPORT; 9120 IMMEDIATE HURDLE

WORLD MARKETS                             

Dow ended marginally in the red but S & P 500 and Nasdaq gained 0.2% and 0.5% respectively, awaiting a key health care vote in Congress, which is seen as a proxy of U.S. President Donald Trump's mandate.

The House is expected to vote on House Speaker Paul Ryan's healthcare plan today, but the Obamacare replacement has seen resistance not just from Democrats, but from conservative GOP members too. Market is concerned that a prolonged battle in Congress to repeal and replace Obamacare could delay tax reform, deregulation and government spending.

WTI crude fell 0.4% to $48.04 per barrel, its lowest since November, after Energy Information Administration (EIA) data showed that U.S. stockpiles climbed almost 5 million barrels to 533.1 million last week, beating forecasts of a 2.8 million-barrel increase.

Dollar index fell 0.1%.

Main European markets lost 0.2%-0.7%. The pound fell to a low of $1.2426 after a terror incident in London left five dead, including an attacker and a police officer.

AT HOME

Sensex and Nifty plunged 1.1% and 1% respectively, registering the biggest fall since 2nd December 2016 and 20th January 2017 respectively. Sensex settled at 29168, down 318 points while Nifty lost 91 points to finish at 9030. BSE mid-cap and small-cap indices fell 1% and 0.9% respectively. Except a flat Realty index, all the sectoral indices of BSE ended in red with Telecom and Consumer Durable indices leading the tally, down 2.1% and 1.9% respectively.
FIIs net bought stocks and index futures worth Rs 357 cr and 1053 cr respectively but net sold stock futures worth Rs 1820 cr. DIIs were net sellers to the tune of Rs 780 cr.

Rupee depreciated 20 paise to end at 65.51/$.

NSE has added 15 stocks in derivative segment from 31st March. These are PVR, CAPF, Muthoot Finance, Equitas, Infibeam, Reliance Defence, Indigo, Dalmia Bharat, Ujjivan, Suzlon, Piramal Enterprises, Escorts, Shree Cements, Max Financial and Indian Bank.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 30 points higher start for our market.

Nifty yesterday broke the immediate support of 9045 and touched a low of 9019 before closing at 9030. 8975, the lower end of the gap created by the big gap up opening after the assembly election results last week, is the next support to eye.


Immediate resistance on the hourly chart is placed around 9120, with the stop-loss of which trading shorts can be held on to.

Wednesday, March 22, 2017

US EQUITIES SUFFER WORST FALL IN 5-MONTHS; NIFTY SET TO TEST 9045 SUPPORT

US EQUITIES SUFFER WORST FALL IN 5-MONTHS; NIFTY SET TO TEST 9045 SUPPORT

WORLD MARKETS                             

US indices plunged 1.1%-1.8%, posting their first 1% plus fall in 5 months as concerns over the fate of a healthcare reform bill weighed, banks struggled with falling yields and oil resumed decline.

House Republicans are expected to vote on repealing and replacing the Affordable Care Act on Thursday with the votes needed for passage in doubt. The Freedom Caucus, a key group of House Republicans, threatened to issue a formal statement of opposition to the Obamacare replacement bill, which would delay the vote, unless the language in the bill changes dramatically.

U.S. Treasury yields traded mixed, with the benchmark 10-year note yield holding around 2.42% and the short-term two-year note yield trading around 1.26%. Dollar index fell more than half a percent to 99.70. Gold gained little less than 1% to $1245 an ounce.

Retail stocks took a hit after Kevin Brady, the Republicans' chief tax writer in the House said that a border adjustment tax will probably appear in the final tax reform plan

Cleveland Federal Reserve President Loretta Mester said that if economic data holds up she would support a reduction in the Fed's $4.5 trillion balance sheet.

The American Petroleum Institute reported a 4.53 million barrels build in crude stocks at the end of last week, nearly double the expected gain. WTI crude fell 1.8% to $47.34 a barrel, its lowest since Nov. 29. Brent dropped 1.3% to $50.96.

European markets fell upto 0.8%. Basic resources stocks were the worst performers amid a slide in metal prices. U.K. inflation jumped to 2.3% in February, up from 1.8% in January.  

AT HOME

After a positive start, benchmark indices tumbled two third of a percent from the top of the day but recouped most of the losses in late noon trade to end just marginally lower. Sensex settled at 29485, down 33 points while Nifty lost 5 points to finish at 9121. BSE mid-cap and small-cap indices lost 0.4% and 0.2% respectively. BSE Healthcare index tumbled 1.4%, becoming top loser among the sectoral indices, followed by 0.6% cut in Telecom index and Bankex. Realty and FMCG indices were the top gainers, up 1.4% and 1% respectively.

FIIs net bought stocks worth Rs 1663 cr but net sold index futures and stock futures worth Rs 26 cr and 2391 cr respectively. DIIs were net sellers to the tune of Rs 799 cr.

Rupee appreciated 12 paise to end at 65.3075/$, it's highest in 17 months.

Dr Reddy plunged 4.6% on news that 13 observations it received from the US Food and Drug Administration on March 18 contained repeats from a 2015 warning letter.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5%-1.7% with Nikkei leading the losses and SGX Nifty is suggesting about 60 points lower start for our market.

After today's gap down opening, Nifty would be close to 9045, the level which we have been mentioning as the immediate support on the hourly chart. A breach of 9045 would generate a sell on the hourly chart and next downside target to eye in that case would be 8970, which earlier acted as a hurdle.


Traders are advised to keep stop-loss of 9045 in longs.

Tuesday, March 21, 2017

9045 CONTINUES TO BE IMMEDIATE SUPPORT; 9218 IMMEDIATE HURDLE

9045 CONTINUES TO BE IMMEDIATE SUPPORT; 9218 IMMEDIATE HURDLE

WORLD MARKETS                             

Nasdaq ended flat while Dow and S & P 500 fell 0.04% and 0.2% yesterday.

Chicago Fed President Charles Evans said the central bank will likely wait until June to decide on the next rate hike. Minneapolis Fed President said he voted against a rate hike last week because he wanted to see more inflation in the U.S. Philadelphia Fed President Patrick Harker said it's OK if inflation overshoots the Fed's inflation target as the labor market tightens.

Treasuries traded higher, with the two-year note yield slipping to 1.29% and the benchmark 10-year note yield holding near 2.465%.

U.S. crude settled down 56 cents or 1.2% to $48.22 a barrel. Brent crude fell 14 cents to $51.62.

European markets, except a 0.1% higher FTSE, lost 0.3%-0.5% after the G-20 failed to agree on a joint communication that supported free and open trade.

Pound slipped against the dollar after UK Prime Minister Theresa May's office announced the country will trigger Article 50 to exit the European Union on March 29.

AT HOME

After falling about half a percent in the morning trade, benchmark indices traded in a narrow range through rest of the session and finally ended with cuts of about 0.4%. Sesex settled at 29519, down 130 points while Nifty lost 33 points to finish at 9127. BSE mid-cap and small-cap indices however managed to gain 0.2% and 0.3% respectively. BSE IT and Teck indices tumbled 1.4% and 1.2% respectively, becoming top losers among the sectoral indices while Consumer Durable and Healthcare indices were the top gainers, up 1% and 0.4% respectively.

IIs net bought stocks and index futures worth Rs 57 cr and 777 cr respectively but net sold stock futures worth Rs 1280 cr. DIIs were net sellers to the tune of Rs 536 cr.

Rupee appreciated 14 paise to end at 65.43/$, hitting a fresh 16-month high.

Idea plunged 10% after company's valuation for merger with Vodafone India turned out to be lower than market expectation.

OUTLOOK

Today morning, Nikkei is down about half a percent, other Asian markets are little changed and SGX Nifty is suggesting about 25 points higher start for our market.


Nifty yesterday fell 0.4% to close at 9127, digesting heady gains made last week. As mentioned in yesterday's report, immediate support on the hourly chart is placed at 9045, with the stop-loss of which trading longs should be held on to. On the upside, 9218, the top made last week, is the immediate hurdle above which 9300-9320 would be the next target area.

Monday, March 20, 2017

TRAIL STOP-LOSS TO 9045

TRAIL STOP-LOSS TO 9045

WORLD MARKETS                             

Nasdaq ended flat while Dow and S & P 500 closed 0.1% lower on Friday.

Industrial production came in unchanged for February. Capacity utilization edged 0.1% lower to 75.4%. The University of Michigan preliminary read on consumer sentiment for March was 97.6.

US crude rose 3 cents or 0.1% to $48.78 a barrel. Baker Hughes said the weekly U.S. rig count rose by 14 oil rigs to a total of 631.

Treasury yields traded slightly lower, with the 2-year yield around 1.32% and the 10-year yield around 2.50%. Dollar index was little changed. Gold gained $3 to $1230 an ounce.

European markets, except a 0.2% lower Italy, gained 0.1%-0.8%. Euro zone registered a trade deficit in January - the first time in three years.

For the week, Dow gained 0.1%, S & P 500 fell 0.1%. WTI crude gained 0.1%. Gold soared 2.4%, its best week since Feb 3.

Finance ministers from twenty of the world's biggest economies held a two-day meeting, and warned against competitive devaluations and disorderly FX markets but failed to agree on keeping global trade free and open.

AT HOME

After a positive start, benchmark indices traded in a narrow range through the day and finally ended with modest gains. Sensex added 63 points to settle at 29649 while Nifty finished at 9160, up 6 points. BSE mid-cap index lost 0.1% while small-cap index ended marginally in the green. BSE FMCG index soared 2.4%, becoming top gainer among the sectoral indices, followed by 0.8% higher Realty index. Telecom index tumbled 2.7% to become top loser, followed by 0.5% cut in Utilities, Auto, Bank and Capital Goods indices.

FIIs net bought stocks worth Rs 1532 cr but net sold index futures and stock futures worth Rs 137 cr and 425 cr respectively. DIIs were net sellers to the tune of Rs 712 cr.

Rupee depreciated 4 paise to end at 65.57/$.

ITC surged 4.4% after the GST Council yesterday decided to cap the cess rate on tobacco products at Rs 4,170 per 1,000 sticks or 290% ad valorem.

For the week, Sensex and Nifty gained 2.4% and 2.5% respectively.

OUTLOOK

Today morning Japan, Singapore and Korea are trading with cuts of upto half a percent while China and Hang Seng are marginally higher. SGX Nifty is suggesting about 15 points lower start for our market.

We have been advising holding on to long positions with a trailing stop-loss and that continues to be the view. Immediate support on the hourly chart has moved up to 9045, which should serve as the fresh stop-loss for long positions.


On the way up, 9218, the top made on Friday, is the immediate hurdle above which 9300 would be the next target to eye.

Friday, March 17, 2017

TRAIL STOP-LOSS TO 9040

TRAIL STOP-LOSS TO 9040

WORLD MARKETS                             

Dow and S & P 500 fell 0.1% and 0.2% respectively while Nasdaq ended flat yesterday.

Healthcare stocks were under pressure as U.S. President Trump released his budget blueprint that proposed cutting the National Institutes of Health's spending by $5.8 billion.

Weekly initial jobless claims fell to 241,000. Housing starts rose more than expected in February to a seasonally adjusted annual rate of 1.288 million. The Philly Fed Index also topped forecasts at 32.8 for March.

U.S. crude oil reversed earlier gains settle down 11 cents at $48.75 a barrel.

Dollar index fell about half a percent. Gold climbed $26 to $1227 an ounce.

In Europe, FTSE, CAC and DAX gained 0.6% each while Italy and Spain soared 1.7% and 1.8% respectively after the defeat of the populist anti-European Union candidate Geert Wilders in the Dutch election. The Bank of England kept rates unchanged.

Earlier, Bank of Japan kept its rates unchanged and the People's Bank of China raised its short-term interest rate by 10 basis points on both medium-term lending facility loans and its open market operation reverse repurchase agreements.

AT HOME

After a gap up opening, benchmark indices added some more gains through the session with Sensex and Nifty closing higher by 0.6% and 0.8% respectively. Sensex settled at 29586, up 188 points while Nifty added 69 points to finish at 9154. BSE mid-cap and small-cap indices climbed 1.6% and 1.1% respectively. Except a marginally lower Telecom index, all the BSE sectoral indices ended in green with Metal and Power indices leading the tally, up 2.8% and 1.8% respectively.

FIIs net bought stocks and index futures worth Rs 1360 cr and 858 cr respectively but net sold stock futures worth Rs 166 cr. DIIs were net sellers to the tune of Rs 88 cr.

Rupee appreciated 28 paise to end at 65.5350/$.

GST council yesterday cleared drafts of two main supplementary legislations — the State GST Bill and the UT GST Bill. The other three enabling legislations — Central GST, Integrated GST and the Compensation Law — have already been cleared by the Council in an earlier meeting, thus concluding the legislative exercise of approving the draft legislation after months of hectic confabulations between the Centre and the states. Four of these legislations — CGST, IGST, UTGST and the Compensation law — will now be cleared by the Union Cabinet and taken to Parliament for final approval. The fifth law — SGST Bill — will be taken by the state government through the cabinets to their respective state assemblies.

OUTLOOK

Today morning, except a 0.3% lower Nikkei, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 15 points higher start for our market.

As mentioned in yesterday's report, a decisive crossover of 8970 marks a major breakout after a two-year long consolidation, major target of which comes to around 10000. "Hold on to long positions with a trailing stop-loss" continues to be the advisee.


Immediate support on the hourly chart has moved up to 9040, which should serve as the fresh stop-loss for trading longs.