NIFTY TESTS 50% RETRACEMENT LEVEL; TRAIL STOP-LOSS TO 10250

NIFTY TESTS 50% RETRACEMENT LEVEL; TRAIL STOP-LOSS TO 10250

WORLD MARKETS                             

US markets fell 0.5%-0.6% with the Dow closing at three-week low as declines in oil prices weighed on energy-related stocks.

WTI crude fell 0.6% to $55.33 a barrel and Brent settled 34 cents lower at $61.87 on news that U.S. crude stockpiles had risen by 1.9 million barrels.

Retail sales rose 0.2% last month as against expectation of no change. The consumer price index edged up 0.1% in October, in line with expectations.

Treasury yields slipped after the data with the 10-year yield at 2.33% and two-year yield near 1.69%.

European markets fell 0.3%-0.6% hit by a downturn in commodity stocks and prices.

AT HOME

Benchmark indices tumbled around six tenth of a percent, extending losing streak to third straight day and closing at lowest level since 24th and 12th October for Sensex and Nifty respectively. Sensex lost 181 points to settle at 32760 while Nifty finished at 10118, down 69 points. BSE mid-cap and small-cap indices plunged 1% and 1.5% respectively. All the BSE sectoral indices ended in red with Metal and Telecom indices leading the tally, down 3% and 2.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 381 cr, 1325 cr and 592 cr respectively. DIIs were net buyers to the tune of Rs 869 cr.

Rupee appreciated 21 paise to close at 65.21/$.

OUTLOOK

Today morning, Shanghai is down 0.2% but Nikkei and Hang Seng are up 0.6% and 0.3% respectively. SGX Nifty is suggesting a marginally lower start for our market.

At the risk of repeating, we have been bearish on Nifty ever since 10380 support was taken out on 7th November and have been asking holding on to short positions with a trailing stop-loss. In Yesterday's report we had said that if 34-DMA, placed around 10160 gives way, 10090 and 9995, which are the 50% and 61.8% retracement levels of the entire 9690-10490 upmove, would be next downside targets to eye.

Nifty yesterday plunged all the way to 10094 before closing at 10118, nearly achieving the 10090 target.

As mentioned above, 10090 is the 50% retracement level of the entire 9690-10490 upmove and in case of even that not holding, 9994, the 61.8% retracement level of this upmove, would be the crucial support to eye.

Meanwhile, immediate resistance on the hourly chart has moved lower to 10250, with the stop-loss of which, trading shorts should be held on to.