NIFTY ACHIEVES 11160 TARGET; TRAIL STOP-LOSS TO 10940

NIFTY ACHIEVES 11160 TARGET; TRAIL STOP-LOSS TO 10940

WORLD MARKETS

US indices tumbled 1.2%-1.4% as bond yields resumed their downturn, raising concerns about the state of the economy. Intensifying Hong Kong protests and Argentina's surprise election results also weighed on the sentiment.

The benchmark 10-year Treasury yield dipped to 1.63% and the spread between 2-year and 10-year Treasury yields narrowed to only 6 basis points, near its lowest level since 2007.

Hong Kong protests as Hong Kong International Airport cancelled all departures for the remainder of the day, citing serious disruptions due to intensifying protests.

In Argentina, country’s center-right leader, President Mauricio Macri, performed poorly in primary elections which triggered a sell-off in peso and Argentina’s stocks, which are down 30%.

Brent futures rose marginally to $58.53 a barrel while WTI futures rose 0.8% to $54.93.

Meanwhile, the People’s Bank of China on Monday set its daily midpoint for yuan trading at 7.0211 per dollar, the third consecutive session below the psychological level of 7 per dollar.

European markets fell 0.1%-0.4% with

AT HOME

Benchmark indices extended yesterday's mammoth rebound by putting on seven tenth of a percent in today's session. Sensex added 254 points to settle at 37581 while Nifty finished at 11109, up 77 points. BSE mid-cap and small-cap indices gained 0.8% and 1% respectively.  BSE Auto index climbed 2%, becoming top gainer among the sectoral indices, followed by 1.4% higher Finance and Consumer Durables indices. Metal index was the top loser, down 0.8%, followed by 0.3% lower Telecom and IT indices.

FIIs net bought stocks and stock futures worth Rs 204 cr and 47 cr respectively but net sold index futures worth Rs 271 cr. DIIs were net buyers to the tune of Rs 607 cr.

Rupee depreciated 11 paise to end at 70.80/$.

For the week, Sensex and Nifty gained 1.2% and 1% respectively, braking 4-week losing streak.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.6%-1.3% and SGX Nifty is suggesting a marginally higher start for our market.

In Friday's report we had mentioned that upon crossover of 11058, 11160, where 200-DMA was placed, would be the next upside target.

Nifty touched a high of 11181 before closing at 11110, achieving 11160 target and vindicating our view.

11181, the top made on Friday, roughly coincided with 200-DMA and trendline adjoining recent tops on the daily chart and hence is the immediate hurdle to eye. Above 11181, 11245 and 11355, the 50% and 61.8% retracement levels of the recent 11706-10782 fall, would be next upside targets to eye.

Meanwhile, existing longs can be held on to with the stop-loss of 10940, which is the immediate support on the hourly chart.