7240 CONTINUES TO BE IMMEDIATE HURDLE; 7070 NEAREST SUPPORT

7240 CONTINUES TO BE IMMEDIATE HURDLE; 7070 NEAREST SUPPORT

WORLD MARKETS                             

Dow and S & P 500 lost 0.2% and 0.5% respectively while Nadaq tumbled 1% yesterday to break 3-day winning streak.

Nymex oil came off session highs but managed to eke out gains, up 11 cents at $30.77 a barrel, after weekly crude inventories rose by 2.1 million barrels. Brent fell 25 cents to $34.25.

In major stock moves, IBM climbed 5%, countering declines in Goldman Sachs and Wal-Mart.

In economic news, weekly jobless claims came in at 262,000. The Philly Fed index came in at minus 2.8 for February. Leading indicators in January showed a decline of 0.2%, after a downwardly revised December report of a 0.3% drop.

European markets ended mixed with FTSE, Italy and Spain falling 0.8%-1.5% while DAX and CAC gained 0.9% and 0.2% respectively.

Gold gained $15 to $1226 an ounce.

AT HOME

After a gap up opening, benchmark indices plunged more than a percent from the top of the day only to recoup most of the lost ground in last hour to end with gains of more than a percent. Sensex settled at 23649, up 267 points while Nifty added 83 poins to finish at 7192.  BSE mid-cap and small-cap indices gained 0.6% each. All the BSE sectoral indices ended in green with IT and Teck indices leading the tally, up 1.9% each.

FIIs net bought stocks, index futures and stock futures worth Rs 419 cr, 443 cr and 691 cr respectively. DIIs were net buyers to the tune of Rs 712 cr.

Rupee appreciated 2 paise to end at 68.455/$.

OUTLOOK

Today morning Nikkei is down nearly 2%, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 20 points lower opening for our market.

Readers would recall that for past couple of sessions we have been mentioning that 7240 is the immediate hurdle on the hourly as well as daily chart, until the crossover of which, the bias would continue to be negative. The benchmark, after getting resisted at 7205 on Tuesday, plunged sharply to 6960 on Wednesday but rebounded smartly to end at 7108.

In yesterday's report we had mentioned that a sustained trading above 7205, the top made on Tuesday, would confirm a higher-top higher-bottom formation on the hourly chart and would pave the way for the further upmove.

The benchmark touched a high of 7215 in the morning trade but could not sustain there and finally ended at 7192 after a choppy trade.

While the set-up on the hourly chart looks more conducive for an upward breakout, one can wait for the crossover of 7240 hurdle for taking fresh longs. 34-DMA, placed around 7420, would be the next target above 7240.

7070 is the immediate support on the hourly chart, with the stop loss of which existing longs can be held on to.