Monday, February 27, 2017

NIFTY RETREATS AFTER ACHIEVING MAJOR TARGET OF 8970

NIFTY RETREATS AFTER ACHIEVING MAJOR TARGET OF 8970

WORLD MARKETS                             

US indices gained upto 0.2% on Friday, with the Dow recording its 11th straight record close and its longest winning streak since 1992.

US treasuries rose with the benchmark 10-year note yield falling to 2.33% while the two-year note yield declined to 1.15%. Gold jumped $7 to $1258 per ounce, marking a three and a half month high.

WTI oil fell 46 cents to $53.99 a barrel on concerns over rising U.S. supplies after oilfield service firm Baker Hughes reported its weekly count of U.S. oil rigs topped 600 for the first time since October, 2015.

U.S. new home sales rose 3.7% in January, below the expected increase of 6.3%. Consumer sentiment hit 96.3 in February, slightly above an estimate of 96.

European markets fell 0.4%-1.2% on the back of a fall in commodities and a slew of underwhelming earnings reports.

For the week, Dow and S & P 500 gained 1% and 0.6% respectively while Nasdaq was up 0.1%. In Europe, FTSE and CAC lost -0.8% and 0.4% respectively but DAX gained 0.4%. In Asia, Shanghai soared 1.6%, Nikkei added 0.2% but Hang Seng fell 0.3%.

AT HOME

After gaining nearly six tenth of a percent, benchmark indices gave away most of the gains in late noon tumble to end just marginally higher. Sensex settled at 28893, up 28 points while Nifty added 13 points to finish at 8940. BSE mid-cap and small-cap indices gained 0.2% and 0.1% respectively. BSE Telecom and IT indices gained 1.8% and 1.7% respectively, becoming top gainers among the sectoral indices while Energy and Utilities indices were the top losers, down 0.8% and 0.6% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 392 cr, 2431 cr and 37 cr respectively. DIIs were net sellers to the tune of Rs 445 cr.

Rupee appreciated 14 paise to end at 66.82/$.

For the week, Sensex and Nifty gained 1.5% and 1.3% respectively, extending the winning streak to fifth straight week.

BJP won 8 out of 10 municipal corporations of Maharashtra.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.3%-1.3% and SGX Nifty is suggesting about 20 points lower start for our market.

Nifty on Thursday touched a high of 8982, achieving the 8970 target we have been working with ever since 8560, the 61.8% retracement level of the entire 8970-7893 fall, was taken out on 25th January.

The benchmark however could not sustain above that level and slipped to end the week at 8940.


As we have been mentioning, a decisive crossover of 8970 is required for the fresh upmove. If that happens, 9119, the top made in March 2015, would be the next target to eye. Meanwhile, immediate support on the hourly chart has move up to 8880, with the stop-loss of which existing longs can be held on to.

Thursday, February 23, 2017

NIFTY NEARLY ACHIEVES MAJOR 8970 TARGET; 8830 IS THE IMMEDIATE SUPPORT

NIFTY NEARLY ACHIEVES MAJOR 8970 TARGET; 8830 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow gained 0.2% while S & P 500 and Nasdaq fell 0.1% each yesterday after minutes from the Federal Reserve's previous meeting hinted that a rate hike coming "fairly soon."

Energy stocks lead decliners af US crude fell 1.4% to $53.59 a barrel.

Weekly mortgage applications fell 2% for the week ending Feb. 17 amid lackluster refinancing. Existing home sales rose 3.3% in January to a 10-year high.

Treasury yields fell with the 10-year yield around 2.41% after earlier hitting a near 2-week low of 2.391%. The 2-year yield held near 1.21%.

In Europe, FTSE, CAC and DAX gained 0.2%-0.4% but Italy and Spain tumbled 0.8% each. German Ifo business climate index for January rose to 111.0 and matched December's 33-month high. The 10-year German bund yield hit its lowest level in five weeks as geopolitical concerns remained.

AT HOME

After gaining about six tenth of a percent in the first half, Sensex and Nifty gave away nearly half of the gains in the second half to end higher by 0.36% and 0.2% respectively. Nevertheless, both the indices closed at their highest level since 8th September, 2016, marking a 5-1/2 month high. Sensex added 103 points to settle at 28865 while Nifty finished at 8927, up 19 points. BSE mid-cap and small-cap indices however lost 0.6% each. BSE Energy index soared 4.5%, becoming top gainer among the sectoral indices, followed by 1.8% rise in Oil & Gas index. IT index was the top loser, down 1.7%, followed by 1.4% each cut in Utilities, Consumer Durable and Teck indices.

FIIs net sold stocks and index futures worth Rs 259 cr and 272 cr respectively but net bought stock futures worth Rs 306 cr. DIIs were net buyers to the tune of Rs 918 cr.

Rupee depreciated 5 paise to end at 66.97/$.

Reliance Industries soared 11.2%, registering the biggest single-day gain in nearly eight years and also touching an eight-year high after Reliance Jio yesterday announced that it will end free data service and start charging its customers from 1 April.

OUTLOOK

Today morning Asian markets are trading flat to modestly lower and SGX Nifty is suggesting a marginally higher start for our market.

Just to recall, we had been working with a major target of 8970 after 8560, the 61.8% retracement level of the entire 8970-7893 fall, was taken out in late January. The benchmark touched a high of 8961 yesterday, nearly achieving this target and vindicating our view.

8970 is the top made in September 2016 and hence a major ceiling, a decisive crossover of which is required for a fresh upmove. While 9119, the top made in March 2015, would be the immediate target if that happens, eventual target of this near 2-year consolidation breakout would come to around 10000.


Meanwhile, immediate support on the hourly chart has moved up to 8830, which should serve as the stop-loss for existing longs.

Wednesday, February 22, 2017

NIFTY APPROACHING MAJOR RESISTANCE ZONE; TRAIL STOP-LOSS TO 8810

NIFTY APPROACHING MAJOR RESISTANCE ZONE; TRAIL STOP-LOSS TO 8810

WORLD MARKETS

US indices climbed 0.5%-0.6%, closing at record highs, following a key naming by the Trump administration and corporate earnings.

The White House, on Monday, announced that Lieutenant General H. R. McMaster will become the new national security advisor. McMaster replaces Michael Flynn, who resigned last week.

The flash read on the IHS Markit U.S. purchasing managers' index for February came in at 54.3, falling slightly from January's 14-month peak.

Dollar index gained half a percent to 101.44.

Oil prices rose with Brent crude up 0.9% to $56.66. U.S. crude March contract climbed 1.2% to $54.06. OPEC said it would be sticking to its agreement to cut production, adding that it hoped compliance from the deal would be higher in the future.

European markets, except a 0.3% lower FTSE, gained 0.4%-1.2% with DAX on the top. Euro zone composite Purchasing Managers Index for February came in at 56.0 – the highest level since April 2011. France reported a composite PMI of 56.2, well above  forecasts, while Germany also surged to a figure of 56.1.

AT HOME

After trading with negative bias in the first half, benchmark indices shot up in the noon trade to end higher by a third of a percent. Nifty added 29 points to settle at 8908, the highest close since 8th September 2016 and Sensex gained 100 points to finish at 28762, the highest close since 22nd September, 2016. BSE mid-cap and small-cap indices added half a percent each. BSE Consumer Durable index soared 2.4%, becoming top gainer among the sectoral indices, followed by 1% higher Bankex. Telecom index tumbled 2.4% to become top loser, followed by half a percent lower Teck index.

FIIs net sold stocks and index futures worth Rs 1436 cr and 1017 cr respectively but net bought stock futures worth Rs 341 cr. DIIs were net buyers to the tune of Rs 1535 cr.

Currency market was shut on account of Municipal Corporation elections in Mumbai.

OUTLOOK

Today morning, except a marginally lower Shanghai, other Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting a marginally higher start for our market.

At the risk of repeating, we have been working with a major target of 8970, which was the top made in September 2016, after 8560, the 61.8% retracement level of the 8970-7893 fall, was taken out.

Nifty yesterday touched a high of 8921 before closing at 8908, moving towards this target.

However, Nifty is now approaching a major resistance area as 8930 is where the trendline adjoining tops made in March 2015 and September 2016 is placed and 8970 is the top made in September 2016. This makes 8930-8970 a major resistance area, a decisive crossover of which is required for a fresh upmove.


Therefore, traders would do well to book some profit in long positions and trail stop-loss in remaining ones to 8810, which is now the immediate support on the hourly chart.

Tuesday, February 21, 2017

TRAIL STOP-LOSS TO 8790

TRAIL STOP-LOSS TO 8790

WORLD MARKETS                             

US markets were shut yesterday for the President's Day Holiday.

European markets ended mixed with 0.6% higher DAX, flat FTSE and modestly lower CAC and Italy. Euro zone consumer confidence fell to minus 6.2 percent during February, compared to minus 4.8 for January.

Oil prices rose with Brent up 0.7% at $56.18 a barrel. U.S. crude added 0.5% to $53.69. Media reports suggested top OPEC producer Saudi Arabia's crude oil shipments fell in December to 8.014 million barrels per day (bpd) from 8.258 million bpd in November.

AT HOME

After a flattish start, benchmark indices saw a sustained northward move through the session to end higher by two-third of a percent, closing at five-month high. Sensex soared 193 points to settle at 28662 while Nifty finished at 8879, up 57 points. BSE mid-cap and small-cap indices added 0.7% and 0.9% respectively. BSE Metal index climbed 2%, becoming top gainers among the sectoral indices, followed by 1.6% each rise in IT and Teck indices.

FIIs net sold stocks and index futures worth Rs 433 cr and 1141 cr respectively but net bought stock futures worth Rs 540 cr. DIIs were net buyers to the tune of Rs 828 cr.

Rupee appreciated 8 paise to end at 66.92/$.

TCS announced buyback of upto 5.6 cr equity shares, representing 2.85% of total paid-up equity share capital of the company for an aggregate amount not exceeding Rs 16000 cr. The buyback price has been set at Rs 2850 per share.

OUTLOOK

Today morning Asian markets are trading with gains of 0.2%-0.9% and SGX Nifty is suggesting a marginally higher start for our market.

In yesterday's report we had reiterated the view that 8900-8970 region, where the trendline adjoining tops made in March 2015 and September 2016 is placed, continues to be the major target as well as the resistance area.

The benchmark touched a high of 8886 before closing at 8879, moving towards this target area.


Meanwhile, immediate support on the hourly chart has moved up to 8790, with the stop-loss of which, existing longs can be held on to.

Monday, February 20, 2017

8900-8970 IS THE MAJOR RESISTANCE AREA; 8750 IMMEDIATE SUPPORT

8900-8970 IS THE MAJOR RESISTANCE AREA; 8750 IMMEDIATE SUPPORT

WORLD MARKETS

Dow ended flat while S & P 500 and Nasdaq gained 0.2% and 0.4% respectively on Friday.

U.S. Treasuries rose, with the benchmark 10-year note yield falling to 2.42% and the short-term two-year note yield declining to 1.19%.

European markets, except a 0.3% higher FTSE and flat DAX, fell 0.4%-0.6%. According to recent polls, Le Pen — France's far-right, anti-European Union candidate — is the favorite to win the first round of voting, scheduled for April. French bond yields ticked higher on the news, pushing the spread between 10-year French sovereigns and German bunds above 70 basis points.

For the week, US indices gained 1.3%-1.7%. In Europe, FTSE gained 0.3% while DAX and CAC climbed 0.8% and 1.5% respectively. In Asia Nikkei was down 0.2% but Shanghai and Hang Seng soared 1% and 2.3% respectively.

AT HOME

After opening with a big gap of a percent and third, benchmark indices gave away more than half of the gains through the volatile session to end higher by about half a percent. Sensex settled at 28469, up 167 points while Nifty added 44 points to finish at 8822. BSE mid-cap and small-cap indices gained 0.5% and 0.4% respectively. BSE Healthcare and Oil & Gas indices were the top gainers among the sectoral indices, up 1.6% and 1.4% respectively while IT and Teck indices were the top losers, down 1% and 0.9% respectively.

FIIs net bought stocks worth Rs 8043 cr and DIIs were net sellers to the tune of Rs 5632 cr, most of which was on account of HDFC Bank after RBI notified that the aggregate foreign shareholding in HDFC Bank had gone below the prescribed limit stipulated under the extant FDI policy. FIIs net sold index futures and stock futures worth Rs 719 cr and 5632 cr respectively.

Rupee appreciated 6 paise to end at 67.01/$.

For the week, Sensex and Nifty gained 0.5% and 0.3% respectively, extending the winning streak to fourth straight week.

GST Council, on Saturday, approved the Draft Compensation Bill and anti-profiteering clause. The Council will now meet on March 4 and 5 to give final touches to the CGST, IGST and SGST laws.

OUTLOOK

Today morning Shanghai and Hang Seng are up about half a percent, other Asian markets are modestly lower and SGX Nifty is suggesting a flattish start for our market.

After trading in 8825-8710 range for 9 sessions, Nifty, on Friday, touched a high of 8896 in the initial trade, crossing this congestion zone, but cooled-off to end the session at 8822. Readers would recall that we have been saying that 8900-8970, where the trendline adjoining tops made in March 2015 and September 2016 is placed, is the major resistance area. A decisive crossover of 8970 is required for the fresh upmove.

Meanwhile, trendline adjoining major bottoms on the daily chart lands support around 8750, with the stop-loss of which trading longs can be held on to.

Ambuja Cements will report its quarterly earnings today.


US markets will remain shut today for Presidents Day holiday.

Friday, February 17, 2017

AFTER HOLDING ON TO 8715 SUPPORT, NIFTY SET TO RETEST 8825 HURDLE

AFTER HOLDING ON TO 8715 SUPPORT, NIFTY SET TO RETEST 8825 HURDLE

WORLD MARKETS                             

Dow gained 0.4% while S & P 500 and Nasdaq fell 0.1% to break seven-day winning streak.

Economic data was strong. Weekly jobless claims held around their lowest levels in more than 40 years and the Philadelphia Federal Reserve manufacturing index hit its highest level since January 1984.

U.S. Treasuries rose with the benchmark 10-year yield falling to 2.45% and the short-term two-year note yield holding around 1.21%. Dollar index fell 0.7%.

US crude rose 25 cents to $53.36 a barrel.

European markets, except a 0.2% higher Italy, fell 0.3%-0.5%. Minutes from January's European Central Bank meeting showed that policymakers think that it's too early to withdraw any monetary stimulus. Car registrations in Europe rose 10.2% y-o-y in January, accelerating from a 3% rise in December. In France, unemployment rate dropped to 10% at the end of last year.

AT HOME

After a flattish start, Sensex and Nifty saw a sustained northward move through the session to end with gains of 0.5% and 0.6% respectively. Sensex added 146 points to settle at 28301 while Nifty finished at 8778, up 53 points. BSE mid-cap and small-cap indices gained 1.2% and 1.3% respectively. Except a 0.9% lower FMCG index, all the BSE sectoral indices ended higher with Healthcare and Realty indices leading the tally, up 2.5% and 2.1% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 226 cr, 103 cr and 56 cr respectively. DIIs were net buyrs to the tune of Rs 249 crr.

Rupee depreciated 17 paise to end at 67.07/$.

BHEL and Idea will be replaced by Indiabulls Housing Finance and IOC in Nifty from March 31.

RBI yesterday notified that the aggregate foreign shareholding in HDFC Bank has gone below the prescribed limit stipulated under the extant FDI policy. This means that foreign investors can buy more shares in HDFC Bank.

OUTLOOK

Today morning Asian markets are trading with cuts of upto half a percent but SGX Nifty is suggesting about 30 points higher start for our market.

Nifty, after retesting the 8715 level, which has been the bottom in the last 9-day 8825-8715 consolidation phased, rebounded yesterday to end at 8778 and is set to open higher today.

After today's positive start, benchmark would be close to the higher end of this consolidation phase placed at 8825, upon decisive crossover of which, 8970, the top made in September 2016, would be the next major target to eye.


Traders should keep stop-loss of 8825 in short positions.

Thursday, February 16, 2017

NIFTY BREAKS 8715 SUPPORT; STAY SHORT WITH THE STOP-LOSS OF 8825

NIFTY BREAKS 8715 SUPPORT; STAY SHORT WITH THE STOP-LOSS OF 8825

WORLD MARKETS                             

Dow and S & P 500 added half a percent each while Nasdaq gained 0.6% for a fresh record high on continued optimism over President Donald Trump's economic agenda of tax cuts and infrastructure spending.

the consumer price index (CPI) rose a more-than-expected 0.6% in January, the largest monthly gain since February 2013. At 2.5%, y-o-y rise was the biggest since March 2012. January retail sales rose 0.4% after an upwardly revised 1% gain in December. Business inventories for December rose 0.4% and the February read on U.S. home builder sentiment showed a decline.

U.S. Treasury yields spiked following data releases, with the benchmark 10-year note yield breaking above 2.5%, while the shorter-term two-year note yield climbed to 1.26%. Dollar index, after touching a high of 101.76, slipped to end at 101.09. Gold rose $8 to $1233 an ounce.

US oil fell 9 cents to $53.11 a barrel.

European markets, except a 0.7% lower Italy, gained between 0.2%-0.8%. U.K. unemployment data met forecasts with a rate of 4.8%.

AT HOME

Sensex and Nifty plunged 0.65% and 0.8% respectively, suffering the worst fall in two-weeks and also closing at two-week low. Sensex slipped 184 points to settle at 28156 while Nifty finished at 8725, down 68 points. BSE mid-cap and small-cap indices fell 1.2% and 1.5% respectively. Except a 0.1% higher FMCG index, all the BSE sectoral indices ended in red with Realty and Industrial indices leading the tally, down 3.5% and 3.1% respectively.

FIIs net bought stocks and index futures worth Rs 226 cr and 689 cr respectively but net sold stock futures worth Rs 1667 cr. DIIs were net buyers to the tune of Rs 249 cr.

Rupee appreciated 2 paise to end at 66.90/$.

Cabinet yesterday cleared merger of SBI's associated banks with SBI.

India's trade deficit narrowed to $9.84 bn in January from $10.37 in December.

OUTLOOK

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

Nifty yesterday touched a low of 8713, breaking the lower end of the 8715-8825 consolidation phase by a bit, but rebounded immediately to end above it at 8725. A sustained trading below 8715 will also break a trendline support on daily chart and next meaningful target to eye in that case would be around 8540, the bottom made on the budget day.


Nevertheless, a sell has been generated on the hourly chart and traders can hold on to short positions with the stop-loss of 8825.