NIFTY SET TO ACHIEVE 8130 TARGET; TRAIL STOP-LOSS TO 8000
US indices ended marginally lower
The U.S. announced sanctions against Russian individuals and organizations it believes interfered with the 2016 U.S. election.
On the data front, jobless claims declined by 10,000 to 265,000, This marks the 95th straight week that claims were below 300,000, a threshold associated with a healthy labor market. The trade deficit for goods widened by $3.4 billion in November to $65.3 bn.
Yields on most U.S. Treasuries hit nearly two-week. Dollar index fell about half a percent to 102.65.
WTI oil fell 29 cents to $53.77 while Brent was down 8 cents at $56.14 a barrel.
European markets, except a 0.2% higher FTSE, lost 0.2% each. Credit Suisse fell 3.5% on reports that that U.S. authorities were investigating the sale of a bond to Mozambique, which instead of being used for tuna fishing has reportedly been used to buy military equipment. In Italy, economy minister Pier Carlo Padoan said that the recapitalization of Monte dei Paschi will start in two to three months.
After trading in a narrow range in the first half, Sensex and Nifty saw a sharp surge in later half to end with gains of 0.6% and 0.9% respectively. Sensex added 155 points to settle at 26366 while Nifty finished at 8104, up 69 points. BSE mid-cap and small-cap indices soared 1.2% and 1.1% respectively. Except a marginally lower Capital Goods index, all the BSE sectoral indices closed in green with Consumer Durable and Oil & Gas indices leading the tally, up 1.7% and 1.6% respectively.
FIIs net sold stock worth Rs 662 cr but net bought index futures and stock futures worth Rs 703 cr and 471 cr respectively. DIIs were net buyers to the tune of Rs 958 cr.
Rupee appreciated 14 paise to end at 68.10/$.
Today morning, except a half a percent lower Nikkei, other Asian markets are trading with gains of 0.2%-0.8% and SGX Nifty is suggesting about 25 points higher start for our market.
Readers would recall that despite a steep fall on Wednesday we had reiterated our positive bias and 8130 target for Nifty and had advised holding on to long positions with the stop-loss of 7980.
Yesterday, the benchmark, after touching a low of 8020, rebounded smartly to end at 8104 and a higher start today would achieve the target of 8130, vindicating our view.
In yesterday's trade, Nifty has generated breakout from a "Cup & Handle" formation on the hourly chart. The immediate target of this formation comes to 8180. Above 8180, 8275, the top made in December, would be the next major target as well as hurdle to eye.
Immediate support on the hourly chart has moved up to 8000, with the stop-loss of which trading longs should be held on to.