NIFTY ON TRACK TO ACHIEVE 7540 TARGET; TRAIL STOP LOSS TO 7770

NIFTY ON TRACK TO ACHIEVE 7540 TARGET; TRAIL STOP LOSS TO 7770

WORLD MARKETS                             

Dow and S & P 500 fell 0.4% and 0.8% respectively while Nasdaq tumbled 1.5% yesterday as oil turned negative and tech stocks lagged.

Dow in fact saw triple digit gain at the open on the back of news of a potential merger between Dow Chemical and DuPont, which jumped nearly 12% for its best day over.

The reversal happened after the oil reversed initial gains. The initial rise was on the back of US Energy Information Administration report which showed crude inventories in the country fell by 3.6 million barrels, for the first time after a 10-week stockpile build-up. Nymex oil finally settled down 35 cents or 0.9% at $37.16 a barrel while brent oil fell 6 cents to $40.20 a barrel.

Apple fell more than 2% and biotech stocks declined, putting added pressure on Nasdaq.

The euro climbed above $1.10 while dollar index fell more than a percent to around 97.40.

European markets fell upto a percent.

AT HOME

Benchmark indices nosedived 1.1% yesterday, extending the losing streak to sixth straight day and closing at the lowest level since 7th September. Sensex settled at 25036, down 274 points while Nifty lost 89 points to finish at 7612. BSE mid-cap and small-cap indices lost 1.8% and 2.2% respectively. All the BSE sectoral indices ended in red with Metal and Basic Materials indices leading the tally, down 3.1% and 2.7% respectively.

FIIs net sold stocks and index futures worth Rs 527 cr and 123 cr respectively but net bought stock futures worth Rs 81 cr. DIIs were net buyers to the tune of Rs 865 cr.

Rupee ended unchanged at 66.83/$.

The Union Cabinet yesterday approved the Real Estate (Regulation & Development) Bill, 2015. The Bill will now be taken up for consideration and passing by the Parliament. In a statement the government said the Bill will provide uniform regulatory environment to ensure speedy adjudication of disputes and orderly growth of the real estate sector.

Also approved was Rs. 4,000-crore package to spur India’s ship building industry, combined with a slew of incentives which include the right of first refusal on all government purchases for Indian shipyards, tax incentives and the ‘infrastructure’ status for shipbuilding and ship repair industry that would help them tap easier financing.

The government also approved mandatory use of jute packaging material for foodgrains and sugar, a move which will provide relief to 3.7 lakh jute mill workers.

OUTLOOK

Today morning, barring a modestly higher Shanghai, other Asian markets are trading with cuts of upto a percent, and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report titled "7700 achieved, 7540 next" we had clearly mentioned that the technical setup  continues to be weak and 7540 continues to be the next downside target to eye.

The benchmark plunged 89 points to end at 7612, coming closer to 7540 target.

7540, the bottom made in early September, continues to be the next downside target to eye.

Immediate resistance on the hourly chart has moved lower to 7770, with the stop loss of which short positions should be held on to.