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.