Friday, April 20, 2018

KEEP STOP-LOSS OF 10495


KEEP STOP-LOSS OF 10495

WORLD MARKETS

US indices, weighed down by fall in technology stocks and rise in interest rate, fell 0.3%-0.8%.

Technology stocks fell after Taiwan Semiconductor Manufacturing (TSMC), the largest contract chipmaker in the world, said it expects second-quarter revenue to range between $7.8 billion and $7.9 billion, well below a market estimate of $8.8 billion

US 10-year Treasury note yield broke above 2.9% and two-year yield traded near highest levels in nearly a decade.

Weekly jobless claims totaled 232,000, slightly more than expected. The Philadelphia Fed index hit 23.2 for April, higher than estimate of 20.

European markets, except 0.2% lower DAX, gained upto 0.2%.

US oil fell 0.3%.

AT HOME

Sensex and Nifty finished with gains of 0.3% and 0.4% respectively after a rangebound session. Sensex added 96 points to settle at 34427 while Nifty finished at 10565, up 39 points. BSE mid-cap and small-cap indices climbed 0.6% each. BSE Metal index soared 4.5%, becoming top gainer among sectoral indices, followed by 2.8% higher Basic Material index. Oil & Gas and Consumer Durable indices were the top losers, down 1.3% and 0.9% respectively.


FIIs net sold stocks worth Rs 625 cr but net bought index futures and stock futures worth Rs 792 cr and 264 cr respectively. DIIs were net buyers to the tune of Rs 449 cr.

Rupee depreciated 13 paise to end at 65.79/$.

Indusind Bank reported 27% y-o-y rise in March quarter net profit at Rs 953 cr. NII rose 20.4% to Rs 2008 cr. Net interest margin dipped 3 bps q-o-q to 3.97%. Gross NPA ratio rose 1 bps to 1.17% and Net NPA ratio worsened 5 bps to 0.51%. Slippages more than doubled to Rs 860 cr and provisions for bad loans rose 42% q-o-q to Rs 335 cr.

TCS beat market expectations on all front barring operating profit margin that was in line. Revenue in dollar terms increased 3.9%, the highest growth in last 14 quarters, to USD 4,972 million. Constant currency growth stood at 2%. In rupee terms, revenue from operations for the quarter grew by 3.8% to Rs 32,075 cr. Consolidated net profit rose 5.7% q-o-q to Rs 6904 cr. EBIT increased 4.7% to Rs 8,147 cr and margin improved 20 bps to 25.4%. It also announced 1:1 bonus.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.2%-0.4% and SGX Nifty is suggesting about 40 points lower start for our market.

Readers would recall that we have maintained positive stance on Nifty ever since immediate hurdle of 10130 was taken out on 26th March and have been advising holding on to long positions with a trailing stop-loss. In yesterday's report, we had mentioned that 10630, in the vicinity of couple of tops were made in February, is the immediate hurdle to eye above which 10700, the 61.8% retracement level of the entire 11171-9951 fall, would be the next target to eye.

Nifty yesterday traded within previous day's range and finally settled at 10565 and is set to open lower today.

10495, as mentioned in yesterday's report, continues to be immediate support, a decisive breach of which would generate a sell on the hourly chart and would pave the way for further correction.

Traders are advised to hold existing longs with the stop-loss of 10495.

Thursday, April 19, 2018

10630, 10700 ARE UPSIDE TARGETS; TRAIL STOP-LOSS TO 10495


10630, 10700 ARE UPSIDE TARGETS; TRAIL STOP-LOSS TO 10495

WORLD MARKETS

Dow, weighed down by IBM, fell 0.2% but S & P 500 and Nasdaq ended with modest gains on the back of some strong corporate earnings.

Rail transportation company CSX and United Airlines also posted better-than-expected results. Morgan Stanley reported a record profit and revenue for the first quarter.

IBM nosedived 7.5% despite reporting earnings and revenue that topped expectations as forward-looking guidance disappointed.

The Federal Reserve said in the latest Beige Book the U.S. economic outlook remains positive, but noted that steel prices are rising due to tariffs.

US oil jumped 2.9% to $68.47 a barrel, its strongest levels since late 2014 on data that showed a drop in U.S. crude inventories. Brent rose 2.7% to $73.48.

In Europe, DAX ended flat while FTSE soared 1.3% and CAC rose 0.5%. Auto stocks fell after data showed European car registrations fell 5.2%. The British pound fell on the back of March U.K. inflation coming in at a one-year low of 2.5% in March, down from 2.7% in February. Eurozone inflation came in at 1.3%, an increase from the previous month, but lower than estimates.

AT HOME

After gaining just under half a percent, benchmark indices saw a sharp dip in late noon trade to end with modest cuts, breaking the nine-day gaining streak. Sensex settled at 34331, down 63 points while Nifty lost 22 points to finish at 10526. BSE mid-cap and small-cap indices fell 0.1% and 0.4% respectively. BSE Consumer Durable index tumbled 1.2%, becoming top loser among sectoral indices, followed by 0.8% lower Bankex and Energy indices. FMCG index soared 1.6%, becoming top gainer, followed by 0.5% higher Telecom and Realty indices.

FIIs net sold stocks and stock futures worth Rs 916 cr and 188 cr respectively but net bought index futures worth Rs 2320 cr. DIIs were net buyers to the tune of Rs 870 cr.

Rupee depreciated 2 paise to end at 65.66/$.

Defending the Reserve Bank of India’s (RBI) norms on resolution of banks’ non-performing assets (NPAs), announced in February, RBI Deputy Governor N.S. Vishwanathan said these are outcome-oriented and provide banks the flexibility on deciding the contours of resolution. As per the RBI’s revised framework on NPAs, banks are required to classify even a day’s delay in paying loan installments as a default.

OUTLOOK

Today morning, Shanghai is little changed but Hang Seng and Nikkei are up 0.8% each. SGX Nifty is suggesting about 40 points higher start for our market.

After Nifty achieved 10420 and 10560 targets, we had given next target of 10700, which is the 61.8% retracement level of the entire 11171-9951 fall. Nifty yesterday touched a high of 10594 before closing at 10538 and is set to open above 10550 today.

10700 continues to be next major target as well as resistance to eye. Before that 10630, in the vicinity of couple of tops were made in February, will be the immediate hurdle to eye.

Immediate support on the hourly chart has moved up to 10495, with the stop-loss of which, existing longs should be held on to.

TCS and Indusind Bank will report their quarterly earnings today.

Wednesday, April 18, 2018

TRAIL STOP-LOSS TO 10470 FOR NEXT TARGET OF 10700


TRAIL STOP-LOSS TO 10470 FOR NEXT TARGET OF 10700

WORLD MARKETS

US indices gained 0.9%-1.7% on the back of strong earnings.

Netflix soared 9% after reporting in-line quarterly earnings and higher-than-expected subscriber growth. UnitedHealth rose 4% after it reported better-than-expected earnings and raised its outlook for 2018. Johnson & Johnson and Goldman Sachs too posted better-than-expected earnings and revenue.

Housing starts rebounded in March, totaling 1.319 million versus estimate of 1.262 million.

European markets gained 0.2%-0.8% with basic resources leading after China growth data. Germany's ZEW economic sentiment index slumped for the third straight month to -8.2 — the lowest level since November 2012.

US crude rose 0.5% to $66.87 and Brent gained 0.4% to trade at $71.90 a barrel.

China said it would impose deposits on U.S. sorghum imports and Several U.S. companies will be asked to put up a deposit of up to 178.6% on sorghum imports. It however, also announced plans to relax foreign ownership rules in the car market.

Earlier, China growth data for the first quarter came in at 6.8%, slightly above estimates.

AT HOME

Sensex and Nifty gained 0.3% and 0.2% respectively, extending the winning streak to ninth straight day. Sensex added 90 points to settle at 34395 and Nifty finished at 10548, up 20 points. BSE mid-cap and small-cap indices gained 0.3% each. BSE Power and Realty indices climbed 1.2% each, becoming top gainers among sectoral indices while IT and Teck indices were the top losers, down 0.4% each.

FIIs net sold stocks and stock futures worth Rs 951 cr and 432 cr respectively but net bought index futures worth Rs 237 cr. DIIs were net buyers to the tune of Rs 724 cr.

Rupee depreciated 16 paise to end at near seven-month low of 65.65/$.

The World Bank has forecasted a growth rate of 7.3% for India this year and 7.5% for 2019 and 2020, and noted that the country's economy has recovered from the effects of demonetisation and the Goods and Services Tax.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.8%-1.4% and SGX Nifty is suggesting about 50 points higher start for our market.

Just to reiterate, after Nifty achieved 10420 target, we had given 10560 as next target, which is the 50% retracement level of the entire 11171-9951 fall. Nifty yesterday touched a high of 10560 before closing at 10548, achieving this target and vindicating our view.

A higher start today would take the benchmark close to 10600. As mentioned yesterday, 10700, the 61.8% retracement level of the aforementioned fall, is the next target as well the resistance to eye.

Immediate support on the hourly chart has moved up to 10470, with the stop-loss of which, trading longs should be held on to.

Tuesday, April 17, 2018

NIFTY MOVES CLOSER TO 10560 TARGET; TRAIL STOP-LOSS TO 10440


NIFTY MOVES CLOSER TO 10560 TARGET; TRAIL STOP-LOSS TO 10440

WORLD MARKETS

US indices gained 0.7%-0.9% on strong corporate earnings and easing worries over Syria.

After strong numbers from BlackRock, J.P. Morgan Chase and Citigroup last week, yesterday Bank of America reported better-than-expected quarterly earnings.

U.S. retail sales rose 0.6% in March, boosted by a 2% jump in auto sales.

WTI oil fell $1.17 to settle at $66.22 a barrel.

European markets fell 0.4%-0.9%

AT HOME

After starting in the red, Sensex and Nifty saw a sustained northward move through the session to end higher by 0.3% and 0.5% respectively, extending the winning streak to eighth straight day. Sensex settled 113 points higher at 34305 while Nifty added 48 points to finish at 10528. BSE mid-cap and small-cap indices rose 0.3% and 0.6% respectively. BSE Realty and Healthcare indices soared 1.8% and 1.1% respectively, becoming top gainers among sectoral indices while IT and Teck indices were the top losers, down 0.8% and 0.7% respectively.

FIIs net sold stocks and index futures worth Rs 308 cr and 18 cr respectively but net bought stock futures worth Rs 38 cr. DIIs were net sellers to the tune of Rs 29 cr.

Rupee depreciated 28 paise to end at 65.49/$, marking a six month low.

Indian Meteorological Department’s (IMD’s) said the south-west monsoon is likely to be 97% of the long period average (LPA), implying normal summer rains.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.2%-0.5% and SGX Nifty is suggesting about 20 points lower start for our market.

We have been working with target of 10560, which is the 50% retracement level of the entire 11171-9951 fall, after 10420, the 38.2% retracement level of this move, was taken out.

Nifty yesterday touched a high of 10540 before closing at 10528, moving very near to this target.

10560 continues to be immediate upside target above which 10700, the 61.8% retracement level of the above mentioned fall, would be the next major target as well as the resistance to eye.

Meanwhile, immediate support on the hourly chart has moved up to 10440, with the stop-loss of which, existing long should be held on to.

Monday, April 16, 2018

TRAIL STOP-LOSS TO 10400


TRAIL STOP-LOSS TO 10400

WORLD MARKETS

US indices, weighed down by bank stocks, fell 0.3%-0.5% on Friday.

Citigroup, Wells Fargo and J.P. Morgan Chase all reported quarterly earnings and revenue that surpassed market expectations. Stocks however fell after initially trading higher, as the strong results were already priced in.

The University of Michigan's consumer sentiment index ticked down to 97.8 in April from 101.4 in March.

European markets gained 0.1%-0.2%.

For the week, US indices surged 1.8%-2.8%. European markets gained 1.1%-1.6%. In Asia, Hang Seng surged 3.2% while Nikkei and Shanghai were up a percent. US oil soared 8.6% for the week.

On Saturday, the United States, France and Britain launched 105 missiles targeting three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma on April 7.

Russian President Vladimir Putin warned on Sunday that further Western attacks on Syria would bring chaos to world affairs.

AT HOME

Benchmark indices gained about a fourth of a percent, extending the winning streak to seventh straight day. Sensex added 91 points to settle at 34192 while Nifty finished at 10480, up 22 points. BSE mid-cap and small-cap indices rose 0.5% and 0.3% respectively. BSE Metal index climbed 1%, becoming top gainer among the sectoral indices, followed by 0.6% higher Basic Material and Healthcare indices. Telecom index was the top loser, down 0.7%, followed by 0.3% lower Capital Goods and FMCG indices.

FIIs net sold stocks and index futures worth Rs 400 cr and 249 cr respectively but net bought stock futures worth Rs 836 cr. DIIs were net buyers to the tune of Rs 306 cr.

Rupee appreciated 5 paise to end at 65.20/$.

For the week, Sensex and Nifty gained 1.7% and 1.4% respectively, extending the winning streak to third consecutive week.

Infosys reported mixed numbers. Revenue rose 0.6% in constant currency terms, which was lower than the estimated 1% figure. Margin however rose 40 bps to 24.7% as against expectation of being flat. The company reported 5.8% growth in 2017-18 and guided for a 6-8% revenue growth in constant currency terms for 2018-19 which was in line with market expectation. However, its EBIDTA margin forecast of 22-24% is below the current level. The ADR plunged nearly 8%.

India's trade deficit in March widened to $13.69 bn in March from $11.98 bn in as exports dipped 0.7% y-o-y to $29.1 bn while imports rose 7.2% to $42.8 bn.

OUTLOOK

Today morning, Nikkei is modestly higher but other Asian markets are trading with modest cuts. SGX Nifty is suggesting about 40 points lower start for our market.

After Nifty achieved 10420 target, which was the 38.2% retracement level of the entire 11171-9951 fall, we had given next target of 10560, which is the 50% retracement level of this fall.

Nifty, on Friday, touched a high of 10520 before closing at 10480 and is set to open around 10450.

10560 continues to be next upside target as well as resistance to eye. Immediate support on the hourly chart has moved up to 10400, with the stop-loss of which, existing longs should be held on to.

Friday, April 13, 2018

10560 ABOVE 10480; TRAIL STOP-LOSS TO 10380


10560 ABOVE 10480; TRAIL STOP-LOSS TO 10380

WORLD MARKETS

US indices soared 0.8%-1.2% as concerns over Syria eased and bank shares popped ahead of earnings.

In a tweet, Trump said: "Never said when an attack on Syria would take place. Could be very soon or not so soon at all! ...".

BlackRock posted earnings per share and revenue that surpassed expectations. Delta Air Lines reported quarterly earnings that beat estimates, despite rising costs. Citigroup, J.P. Morgan Chase and Wells Fargo are among the companies scheduled to report today.

Weekly jobless claims fell by 9,000 last week to 233,000. Import prices remained unchanged in March.

US crude rose 25 cents to $67.07 a barrel.

In Europe, FTSE ended flat while other markets rose 0.6%-1.3%.

AT HOME

Benchmark indices gained about half a percent, extending the winning streak to sixth straight day and closing at the highest level since 28th February. Sensex settled at 34101, up 160 points while Nifty added 41 points to finish at 10458. BSE mid-cap and small-cap indices however lost 0.1% and 0.3% respectively. BSE IT and Teck indices soared 3.2% and 2.5% respectively, becoming top losers among the sectoral indices while Realty and Metal indices tumbled 1.8% and 1.4% respectively, becoming top losers.

FIIs net bought stocks, index futures and stock futures worth Rs 369 cr, 315 cr and 245 cr respectively. DIIs were net sellers to the tune of Rs 616 cr.

Rupee appreciated 6 paise to end at 65.25/$.

India's retail inflation fell to a 5-month low of 4.28% in March from 4.4% in February. Core inflation however rose to 5.37% from 5.17%. Industrial production grew at 7.1% in February v/s 7.5% in January.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-1.1% and SGX Nifty is suggesting about 30 points higher start for our market.

Nifty yesterday gained 41 points to end at 10458, taking out the 10420-10440 resistance zone we had talked about yesterday.

A higher start today would achieve 10480 target which we had said would be the immediate target once this resistance zone is cleared. Above 10480, 10560, the 50% retracement level of the entire 11171-9951 fall, would be the next target as well as the resistance to eye.

Meanwhile, immediate support on the hourly chart has moved up to 10380, with the stop-loss of which, existing longs should be held on to.

Infosys will report March quarter earnings after market hours today where the dollar revenue growth of 2% and constant currency growth of 1% QoQ is expected. Adjusted net profit is expected to fall around half a percent to Rs. 3679 cr. The company is expected to meet its full year (FY18) constant currency growth guidance of 5.5-6.5% and dollar revenue growth of 6.5-7.5% with margin at around 24% (guidance of 23-25%). The financial year 2018-19 guidance will be closely watched as it will be the first guidance from the new CEO Salil Parekh.

Thursday, April 12, 2018

10420 CONTINUES TO BE IMMEDIATE HURDLE; TRAIL STOP-LOSS TO 10320


10420 CONTINUES TO BE IMMEDIATE HURDLE; TRAIL STOP-LOSS TO 10320

WORLD MARKETS

US indices fell 0.4%-0.9% as geopolitical worries over Syria intensified.

President Trump tweeted that Russia should "get ready" for a potential strike on Syria. This came after a likely chemical weapons attack over the weekend on a rebel-held town in the eastern Ghouta region of Syria.

WTI crude rose $1.31 or 2% to $66.70, its highest level since December 2014. Brent gained 96 cents or 1.4% to $72 a barrel.

Minutes from the Federal Open Market Committee's March meeting reflected that "all" members of the committee see the U.S. economy growing at a strong pace. They also see inflation climbing, which would justify more rate hikes.

European markets fell 0.1%-0.8% with DAX leading the losses.

AT HOME

After falling about half a percent in the first hour, benchmark indices recouped all the losses and more through rest of the session to end with modest gains, extending the winning streak to fifth straight day. Sensex added 60 points to settle at 33940 while Nifty finished at 10417, up 15 points. BSE small-cap index rose 0.2% but mid-cap index fell 0.2%. BSE Metal and IT indices rose 1.6% and 1.4% respectively, becoming top gainers among sectoral indices while Oil & Gas index plunged 2.2%, becoming top loser, followed by 0.7% lower Bankex.

FIIs net bought stocks and index futures worth Rs 362 cr and 620 cr respectively but net sold stock futures worth Rs 201 cr. DIIs were net buyers to the tune of Rs 112 cr.

Rupee depreciated 32 paise to end at 65.31/$.

OUTLOOK

Today morning, Hang Seng is up half a percent but Nikkei and Shanghai SGX Nifty is suggesting a marginally higher start for our market.

As we have been mentioning 10420, the 38.2% retracement level of the entire 11171-9951 fall, is the immediate hurdle, a decisive crossover of which, is required for a fresh upmove. Also, you have 20-week moving average at 10440. This makes 10420-10440 an important resistance area and Nifty has been taking resistance in this zone for past two sessions.

Next leg of upmove will open up once this resistance zone is taken out. 10480, the top made in mid-March, would be the next target if that happens, followed by 10560, which is the 50% retracement level of the 11171-9951 fall.

Meanwhile, immediate support on the hourly chart has moved up to 10320, with the stop-loss of which, trading longs should be held on to.

CPI for March will be released today and is expected to show a print of 4.2%, down from previous month's 4.4% read. IIP for February will also be out today and is expected to show a growth of 6.8% as against 7.5% uptick registered in January.