STAY SHORT WITH THE STOP-LOSS OF 15220

 

STAY SHORT WITH THE STOP-LOSS OF 15220

 

WORLD MARKETS

 

Nasdaq inched up 0.1%, Dow was flat while S & P 500 fell 0.2% on Friday. Indices ended off around half a percent from the morning highs on rising interest rates and profit taking in some of the market’s largest technology companies.

 

Brent crude futures fell 1.6% to $62.91 per barrel, while WTI crude futures settled 2.1% lower at $59.24 per barrel as Texas energy firms began to prepare for restarting oil and gas fields shuttered by freezing weather.

 

US 10-year Treasury yield advanced 5 bps to 1.34% while 30-year bond yield rose to 2.14%. 

 

European markets gained 0.1%-1.2%. The euro zone flash composite PMI, climbed to 48.1 in February from 47.8 in January. Germany’s composite PMI reading came in at 51.3, up from 50.8 in January. French activity weakened to 45.2, down from 47.7 in January.

 

For the week, Nasdaq and S&P 500 lost 1.6% and 0.7% respectively while Dow managed to gain 0.1%. In Europe, FTSE and CAC rose 0.5% and 1.2% respectively while DAX was off 0.4%. In Asia, Nikkei, Hang Seng and Shanghai gained 1.1%-1.8% while Nifty fell 1.2%. 

 

The 10-year Treasury yield this week rose 13 bps to 1.34%, the highest in nearly a year. Gold fell 2.3% for the week, its biggest weekly drop since the week of Jan. 8, as rising treasury yields increased the opportunity cost of holding non-yielding bullion. Oil, after rising on first three days of the week as cold weather fostered demand and threatened to hamstring production in Texas, reversed later to end the week lower, as Texas energy firms began to prepare for restarting oil and gas fields and the United States said it was ready to talk to Iran about both nations returning to a 2015 agreement that aimed to prevent Tehran from acquiring nuclear weapons.

 

AT HOME

 

Benchmark indices slipped nine tenth of a percent, extending the losing streak to fourth straight day and closing at the lowest level since 10th February. Sensex settled at 50889, down 434 points while Nifty lost 137 points to finish at 14981. Nifty mid-cap and small-cap indices fell 1.6% and 0.9% respectively. Except 0.3% higher Energy index, all the BSE sectoral indices ended in red, with Auto index being the top loser, down 2.6%, followed by 2.1% lower Metal index and Bankex.

 

FIIs net bought stocks, index futures and stock futures worth Rs 119 cr, 281 cr and 319 cr respectively. DIIs were net sellers to the tune of Rs 1175 cr.

 

For the week, Sensex and Nifty fell 1.3% and 1.2% respectively, snapping two-week losing streak.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are trading with gains of 1% and 0.4% respectively while Shanghai is little changed. SGX Nifty is suggesting around 20 points higher start for our market.

 

In Friday's report we had said that a breach of 15078, the low made Thursday, would confirm a "Sell" on the hourly chart and pave the way for further correction and that 14977, the low made last week, would be the next downside target if that happens. 

 

Nifty broke 15078 and plunged all the way to 14898 before closing at 14981.

 

14898, the low made Friday, is the immediate support, upon breach of which, 20-DMA, placed around 14760, which also coincides with the 14753 top made on 21st January, would be the next support to eye. On the way up, 15220 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.