NIFTY NEARLY ACHIEVES 8670 TARGET

NIFTY NEARLY ACHIEVES 8670 TARGET

WORLD MARKETS

US indices plunged 1.7%-1.8% yesterday to touch one-month lows, pressured by a surge in the dollar and weakness in oil.

The U.S. dollar advanced more than 1% to 98.55, a 12-year high, as the euro fell below $1.07 for the first time in nearly 12 years on the beginning of quantitative easing in the euro zone.

Nymex crude fell $1.71 or 3.42% to $48.3 a barrel after Goldman Sachs said in a note Monday that it expected U.S. crude to drop as far as $40 a barrel in the near-term. Brent fell $2.14 to $58.39.

Gold fell to $1160 an ounce, its lowest since November 2014.

Wholesale inventories for January rose 0.3%, beating expectations for contraction. The National Federation of Independent Business' small business index for February was an encouraging 98.0, little changed from January's 97.9.

European markets fell between 0.7%-2.5% with FTSE leading the tally, dragged down by mining stocks.

AT HOME

After falling nearly a percent through the day, benchmark indices recouped nearly half of the losses in last half an hour to end lower by half a percent. Sensex settled at 28710, down 135 points while Nifty finished at 8712, down 45 points. BSE mid-cap and small-cap indices lost 0.4% and 0.3% respectively. BSE Realty index tumbled 1.8%, becoming top loser among the sectoral indices, followed by 0.8% cut in Oil & Gas index. Consumer Durable and Teck indices were the top gainers, putting on 1.2% and 0.8% respectively.

FIIs net sold stocks and index futures worth Rs 748 cr and 810 cr respectively but net bought stock futures worth Rs 335 cr. DIIs were net buyers to the tune of Rs 291 cr.

India's current account deficit narrowed to USD 8.2 bn or 1.6% of GDP in Q3 of 2014-15 from USD 10.1 bn or 2% of GDP in Q2.

Lok Sabha yesterday passed Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015, popularly known as the land bill. Government made nine amendments to bill, all of them were adopted.

OUTLOOK

Today morning, Shanghai and Nikkei are up 1% and 0.5% respectively, other Asian markets are trading with modest cuts and SGX Nifty is suggesting a flattish start for our market.

Readers would recall that ever since Nifty broke 8840, which was the 61.8% retracement level of the recent 8670-9120 upmove, we were working with the downside target of 8670.

The benchmark yesterday touched a low of 8677 before recovering to 8712, nearly achieving the target mentioned above.

8670 continues to be important level to eye, a breach of which would break the higher-top higher-bottom formation on the daily chart.

Immediate resistance on the hourly chart has moved lower to 8890, a crossover of which is required to generate a buy on the hourly chart.

Fresh shorts should be initiated only upon the close below 8670 while longs should wait for the crossover of 8890.