NIFTY TAKES OUT 34-DMA HURDLE; STAY LONG WITH THE STOP-LOSS OF 9890

NIFTY TAKES OUT 34-DMA HURDLE; STAY LONG WITH THE STOP-LOSS OF 9890

WORLD MARKETS                             

Nasdaq gained 0.1%, Dow ended flat on Friday while S & P 500 fell 0.1% with S & P 500 snapping 8-day winning streak after disappointing jobs report.

The U.S. lost 33,000 jobs September mainly on account of two major hurricanes Harvey and Irma, hitting the country. Last month marks the first time the U.S. labor market contracted since 2010. However, average hourly earnings rose to an annualized rate of 2.9%. The unemployment rate also fell to a 16-year low of 4.2%.

Treasury yields jumped after the data with the benchmark 10-year yield at 2.362%, while the two-year yield rose to 1.51%, notching its highest level since 2008.

Oil tumbled by around 2%, with WTI dipping back below $50 per barrel, as concerns of overproduction re-surfaced.

European markets, except a 0.2% higher FTSE, fell 1%-0.8%.  Catalonian government said that it will meet despite the Spanish Constitutional Court ordering the regional parliament to close on Monday.

For the week, US indices gained 1.2%-1.6%. Main European markets gained 0.6%-2%.  In Asia, Hong Kong soared 3.3%, Nikkei added 1.6% while Shanghai was up 0.2%.

AT HOME

Sensex and Nifty climbed 0.7% and 0.9% respectively to close at two-week high. Sensex settled at 31814, up 222 points while Nifty added 91 points to finish at 9980. BSE mid-cap and small-cap indices gained 1% and 1.1% respectively. All the BSE sectoral indices ended in green with Metal and Oil & Gas indices leading the tally, up 3.1% and 2.1% respectively.

FIIs net sold stocks worth Rs 1040 cr but net bought index futures and stock futures worth Rs 312 cr and 436 cr respectievly. DIIs were net buyers to the tune of Rs 1240 cr.

Rupee depreciated 23 paise to end at 65.37/$.

For the week, Sensex and Nifty gained 1.7% and 2% respectively to break two-week losing streak.

The Goods and Services tax (GST) council on Friday cut rates on 27 items and 12 services and relaxed return filing rules for small and medium enterprises (SMEs), deferred the controversial reverse charge mechanism (RCM) till March 31, 2018, and hastened tax refunds for exporters battling cash crunch.

OUTLOOK

Today morning, Shanghai, which has reopened after a week long holiday, is up more than a percent but other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 25 points lower start for our market.

We had been mentioning that 34-DMA, placed around 9930, is the immediate hurdle, a crossover of which was required for a fresh upmove. Nifty, on Friday, surged 91 points to end at 9980, taking out this hurdle decisively.

10015, the two-third retracement level of the 10180-9687 fall, continues to be immediate upside target to eye.

9890 is the immediate support on the hourly chart, with the stop-loss of which, trading longs should be held on to.