PROFIT BOOKING ADVISED IN CRUCIAL 8400-8490 RESISTANCE ZONE

PROFIT BOOKING ADVISED IN CRUCIAL 8400-8490 RESISTANCE ZONE

WORLD MARKETS                             

US indices ended modestly higher after a volatile trade as markets awaited clarity on Greece and digested mixed economic reports for indications on the timing of a rate hike..

Data continued to indicate strength in the housing market but more moderate growth in the rest of the economy. Existing home sales jumped 5.1% in May to a 5-1/2 year high. New home sales rose 2.2% in May to a more than seven-year high. The FHFA Housing Price Index showed an increase of 0.3 percent in April. The Richmond manufacturing index rose to 6 in June, up from 1 in May.

Durable goods data for May showed a decline of 1.8%, a greater decline than expected. The core figure of non-defense capital goods orders excluding aircraft rose 0.4%, reversing a 0.3% decline in April. Preliminary manufacturing PMI for June came in at 53.4, decelerating for the third month in a row and slipping to its lowest pace since late 2013.

Greece's State Minister yesterday said that he was confident parliament would back a deal the crisis-hit country hopes to strike with its lenders even though dissenters have criticized concessions offered by Greece. Another media report suggested that Athens negotiator Euclid Tsakalotos said he believes they are closer to a deal than ever.

The European Central Bank yesterday lifted the ceiling on emergency liquidity to Greek banks for a second time in two days

Dollar index jumped more than a percent to 95.40 from 94.32. The euro fell to trade below $1.12. The US 10-year Treasury yield traded near 2.41%.

Nymex oil rose 63 cents or 1% to $61.01 a barrel. Gold lost $7 to $1177 an ounce.

European markets gained between 0.1%-1.2% with CAC leading the tally. Preliminary composite PMI for the euro zone in June rose to 54.1, up from 53.6 in May - marking a 49-month high.

AT HOME

Benchmark indices ended higher by three tenth of a percent after a range bound but choppy trade, extending the winning streak to eight straight day. Sensex gained 74 points to settle at 27804 while Nifty finished at 8382, up 28 points. BSE mid-cap and small-cap indices gained 0.1% and 0.4% respectively. BSE Metal and Capital Goods indices climbed 1.7% and 1.4% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, giving away 1.1% and 0.8% respectively.

FIIs net sold stocks worth Rs 375 cr but net bought index futures and stock futures worth Rs 1394 cr and 990 cr respectively. DIIs were net buyers to the tune of Rs 404 cr. Open interest in index futures went up by 24383 contracts or 3.7%, indicating long buildup.

Rupee depreciated 8 paise to end at 63.585/$.

To help investors and companies in IPOs, Sebi yesterday halved the listing time to six days from the date of the public offer and also allowed a larger number of firms to tap the "fast-track" route for raising funds. For rights issues, the fast-track route can be availed by companies with public shareholding worth as low as Rs 250 crore. Disclosure norms for start-ups listing in the alternative trading platform would also be diluted. Sebi also said that ASBA will be applicable to all kinds of investor categories and all IPOs.

OUTLOOK

Today morning Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 20 points higher opening for our market.

Nifty has been marching ahead for past eight straight sessions and would have given handsome return to readers of this newsletter as we have been asking to hold trading long positions with a trailing stop loss ever since immediate hurdle of 8070 was taken out on last Wednesday.

In yesterday's report we had mentioned that next immediate hurdle to eye is around 8400, where the trendline adjoining recent tops on the daily chart is placed and that above 8400, next major hurdle to eye would be 8490, which is the immediate previous top on the weekly chart.

The benchmark touched a high of 8398 before closing at 8382, nearly achieving the 8400 target.

8400 continues to be immediate hurdle, upon sustained trading above which 8490, the previous weekly top made in May, would be the crucial resistance to eye as mentioned above.

Considering the steep run-up over past eight sessions and looming resistances ahead, traders would do well to book majority of profit in trading longs in 8400-8490 resistance zone for entering back on any possible dip.

For remaining positions, stop loss can be raised to 8250, which is now the immediate support on the hourly chart.

Eurozoen finance ministers will meet again today in a bid to reach a final bailout deal for Greece ahead of an EU leaders' summit due tomorrow.