NIFTY SET TO ACHIEVE 10638 TARGET; TRAIL STOP-LOSS TO 10500

NIFTY SET TO ACHIEVE 10638 TARGET; TRAIL STOP-LOSS TO 10500

WORLD MARKETS

US indices soared 1.2%-1.6% respectively as U.S. Treasury yields slipped ahead of Federal Reserve Chair Jerome Powell's Tuesday testimony before Congress.

The benchmark 10-year note traded at 2.862%.

Oil prices edged up to touch a three-week high with WTI Brent up 19 cents at $67.50 a barrel.

European markets gained 0.4%-0.8%.

AT HOME

Benchmark indices climbed nine tenth of a percent to close at the highest level since 5th February. Sensex settled at 34445, up 303 points while Nifty added 91 points to finish at 10582. BSE mid-cap and small-cap indices gained 0.7% and 0.9% respectively. BSE Realty and Auto indices soared 3.3% and 2.2% respectively, becoming top gainers among sectoral indices while IT and Teck indices were the top losers, down 1.1% and 0.7% respectively.

FIIs net sold stocks worth Rs 1120 cr but net bought index futures and stock futures worth Rs 1036 cr and 344 cr respectively. DIIs were net buyers to the tune of Rs 1409 cr.

Rupee depreciated 7 paise to end at 64.80/$.

PNB has revealed additional unauthorised transaction amounting to Rs 1322 cr in relation to Nirav Modi fraud.

ACC Ltd and Ambuja Cements Ltd, both controlled by LafargeHolcim Ltd, said they were putting on hold their proposed merger, citing constraints related to transfer of mines under current laws.

OUTLOOK

Today morning, except a 0.4% lower Shanghai, other Asian markets are trading with gains of 0.3%-1.2% with Nikkei on the top and SGX Nifty is suggesting about 50 points higher start for our market. In yesterday's report we had given target of 10590, where a trendline adjoining tops made in February as Nifty was set to open above the 10500 hurdle. We had also said that above 10590, 10638, the top made on 8th February, would be the next target to eye.

The benchmark touched a high of 10592 before closing at 10582 and is set to open around 10630, which would nearly achieve 10638 target and vindicate our view.

Once Nifty sustains above 10638, 10700, where 34-DMA is placed, would be the next upside target as well as resistance to eye.

Meanwhile, 10520-10500, the gap created by yesterday's gap up opening, would now act as the immediate support, with the stop-loss of which, existing longs should be held on to.

New Fed Chair Jerome Powell is set to address Congress today, when he is expected to address monetary policy in his first semiannual economic testimony. Markets would watch out for clues on the central bank's rate hike path and Powell's views on inflation.