Monday, July 21, 2014

PRUDENT MORNING MANTRA - 21.07.2014

NIFTY EXTENDS GAINS AFTER TAKING OUT 7600 HURDLE; STAY LONG WITH THE STOP LOSS OF 7550

WORLD MARKETS

US indices surged between 0.7%-1.6% on Friday, rebounding from its largest drop since April 10, buoyed by latest round of corporate earnings and view that geopolitical tensions appeared contained.

Google climbed after the Internet search engine tallied second-quarter results; IBM rose after the technology company posted quarterly earnings that topped expectations.

Economic report of the day had leading indicators rising 0.3% in June and the Thomson Reuters/University of Michigan's initial July reading on consumer sentiment coming in at 81.3, less than estimated.

Gold fell $7.4 to $1309 an ounce and nymex crude fell 6 cents to $103.1 a barrel.

European markets pared initial losses to close mixed on Friday.

For the week, Dow, S & P 500 and Nasdaq gained 0.9%,  0.5% and 0.4% respectively. European markets gained between 0.4%-0.9%.

AT HOME

After falling about half a percent in the initial trade, benchmark indices saw a sustained northward move through the session to end higher by three tenth of a percent. Sensex settled at 25641, up 80 points while Nifty gained 23 points to finish at 7664. BSE mid-cap and small-cap indices however lost 0.4% and 0.1% respectively. BSE IT and Teck indices gained 1.4% and 0.9% respectively, becoming top gainers among the sectoral indices while Power and Realty indices were the top losers, giving away 1.3% and 0.9% respectively.

FIIs net bought stocks and stock futures worth Rs 575 cr and 318 cr respectively but net sold index futures worth Rs 375 cr. DIIs were net sellers to the tune of Rs 283 cr.

Rupee depreciated 11 paise to close at 60.28/$, marking a one month low.

For the week, Sensex and Nifty gained 2.5% and 2.7% respectively.

Reliance Industries on Saturday reported better-than-expected quarterly earnings . Consolidated net profit rose 13.7% y-o-y to Rs. 5957 cr and revenues rose 7.2% to Rs 107905 cr. Gross Refining Margin stood at USD 8.7/bbl as against expectation of $ 8.55/bbl.

OUTLOOK

Today morning Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 25 points higher opening for our market.

Ever since Nifty crossed the 7600 hurdle on the hourly chart, we have been working with targets of 7731 followed by 7808. Nifty, on Friday closed at 7664 and is set to open about 25 points higher today, which is in-line with the above view.

7731 continues to be the immediate target on the way up. Immediate support on the hourly chart has moved up to 7550, with the stop loss of which trading longs should be held on to.


HDFC Bank and HDFC will report their quarterly earnings today.

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