STAY LONG WITH THE STOP-LOSS OF 21630

 

STAY LONG WITH THE STOP-LOSS OF 21630

 

WORLD MARKETS

 

Nasdaq and S & P 500 gained 1.2% and 0.6% respectively while Dow fell 0.1%. The S & 500 closed above the key 5000 level for first time ever.

 

December’s consumer price index was revised lower to 0.2% from a 0.3% increase initially reported. Core inflation figures, excluding food and energy, were the same.

 

U.S. 10-year treasury yield rose 2 bps to 4.177%. Dollar index was little changed at 104.08. Gold fell half a percent to $2024 per ounce.

 

 

WTI crude futures rose 62 cents to settle at $76.84 a barrel and Brent contract settled at $82.19 a barrel, up 56 cents.

 

In Europe, FTSE fell 0.3% while DAX and CAC fell 0.2% each. German inflation fell in January to 3.1%.

 

Nikkei breached the 37,000 mark for the first time in 34 years on Friday. BOJ Governor Kazuo Ueda said on there was a high chance for easy monetary conditions to persist even after the central bank ends its negative interest rate policy.

 

For the week, Dow ended marginally higher while S & P 500 and Nasdaq gained 1.4% and 2.3% respectively. In Europe, CAC rose 0.7%, DAX was little changed while FTSE fell 0.6%. In Asia, Shanghai surged 5%, Hang Seng rose 1.4% and Nikkei climbed 2%.

 

 

AT HOME

 

After falling around four tenth of a percent, benchmark indices rebounded in noon trade to end higher by nearly three tenth of a percent. Sensex settled at 71595, up 167 points while Nifty added 64 points to finish at 21782. Nifty mid-cap and small-cap indices however slipped 0.9% and 1.4% respectively, their worst fall since 23rd January. Nifty Bank and Healthcare indices gained 1.4% and 1% respectively, becoming top gainers among the sectoral indices while Metal and Oil & Gas indices were the top losers, down 1.5% and 1.4% respectively.

 

FIIs net bought stocks and index futures worth Rs 142 cr and 657 cr respectively but net sold stock futures worth Rs 2173 cr. DIIs were net sellers to the tune of Rs 422 cr.

 

Rupee depreciated 8 paise to end at 83.04/$.

 

For the week, Sensex and Nifty fell 0.7% and 0.3% respectively.

 

Hero Motocorp's earnings beat estimates with profit and revenue rising 51% and 21% respectively.

 

OUTLOOK

 

China remains shut for the whole of this week while Hong Kong, Taiwan and South Korea are shut today. Nikkei is marginally in the green while GIFT Nifty is suggesting around 100 points gap-up start for our market.

 

In Friday's report we had said that 34-DMA, placed around 21650, was the important immediate support to eye while 22126 continues to be important immediate hurdle.

 

Nifty, after touching a low of 21630, rebounded to end at 21782. The benchmark is set to open above 21850 today.

 

21630, the low mad on Friday, coincided with the 50% retracement level of the recent 21137-22126 upmove and roughly coincided with 34-DMA, making it an important immediate support. On the way up, a trendline adjoining recent tops on the hourly chart presents immediate resistance around 21975, upon crossover of which, 22126, the top made last week, would be bigger hurdle to eye. Meanwhile, trading longs can be held on to with the stop-loss of 21630.

 

For Banknifty, 44859, the low made on Friday, coincided with 200-DMA, and hence is the immediate support to eye, upon breach of which, 44429, the low made in January, would be next support. On the way up, 46000-46100 is the immediate resistance zone, above which, 46892, the top made on 2nd February, would be next upside level to eye.

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