NIFTY ON TRACK TO ACHIEVE 8640 TARGET; TRAIL STOP LOSS TO 8810

NIFTY ON TRACK TO ACHIEVE 8640 TARGET; TRAIL STOP LOSS TO 8810

WORLD MARKETS                             

US indices ended flat to modestly lower after a choppy trading session on news that the European Central Bank revoked a waiver that allowed banks to use Greek government debt as collateral for loans.

After climbing 7% on Tuesday, Nymex crude plunged 8.7% to below $48.45 a barrel, after U.S. crude inventories jumped to a record high, shifting the global glut back in to focus. Brent fell $4 to $54 a barrel.

The ISM non-manufacturing Index for January came in at 56.7, a slight increase from December. The ADP Employment report, which is seen as a precursor to Friday's important jobs report, showed January payrolls increased by 213,000, below estimates of 225,000.

China's central bank cut the reserve requirement ratio by 50 bps to 19.5%, marking the first cut since May 2012, in a bid to boost the slowing economy.

European markets ended mixed with modest changes. Greek banks soared after the country's finance minister, Yanis Varoufakis, proposed a debt swap that will replace outstanding debt with new growth-linked bonds.

AT HOME

Benchmark indices ended lower by four tenth of a percent after a choppy trading session, extending the losing streak to fourth straight session and closing at the lowest level since 21st January. Sensex lost 117 points to settle at 28883 while Nifty finished at 8724, down 33 points. BSE mid-cap index lost 0.2% while the small-cap index ended marginally in the green. BSE Metal index soared 2.1%, becoming top gainer among the sectoral indices, followed by 1% rise in Realty index. Capital Goods index and Bankex were the top losers, giving away 1.9% and 1.2% respectively.

FIIs net sold stocks and stock futures worth Rs 84 cr and 877 cr respectively but net bought index futures worth Rs 221 cr. DIIs were net sellers to the tune of Rs 72 cr.

Rupee depreciated 9 paise to end at 61.75/$.

India's HSBC services PMI for January came in at 52.4, up from 51.1 in January. The composite PMI too improved to 53.3 from 52.9.

Cognizant reported better-than-estimated 6.2% q-o-q growth in revenues at $2.74 bn.

OUTLOOK

Today morning, Shanghai and Hang Seng are up about a percent but other Asian markets are down in the vicinity of half a percent and SGX Nifty is suggesting about 10 points lower opening for our market.

We have maintained our bearish stance ever since Nifty broke 8850, the immediate support on the hourly chart, on last Friday. Also, we have been working with an immediate downside target of 8640, which is the 38.2% retracement level of the 8065-8997 upmove.

The benchmark has since then has been gradually moving lower and touched a low of 8704 yesterday, moving towards the downside target mentioned above.

8640 continues to be the immediate downside target. Immediate resistance on the hourly chart has moved lower to 8810, with the stop loss of which trading shorts can be held on to.

Tata Motors will report its quarterly earnings today.