7690, 7540 NEXT DOWNSIDE TARGETS; TRAIL STOP LOSS TO 7870

7690, 7540 NEXT DOWNSIDE TARGETS; TRAIL STOP LOSS TO 7870

WORLD MARKETS                             

US indices tumbled 1.1%-2.5% on Friday, pressured by a continued decline in oil prices, a sell-off in tech firms and soft reports on the health of the consumer. 

October retail sales showed an increase of 0.1%, below expectations of a 0.3% rise. The producer price index for October fell 0.4%, after falling 0.5% the previous month. The preliminary read on November consumer sentiment hit 93.1, topping expectations.

Nymex oil fell 2.4% to $40.74 a barrel.

Apple fell nearly 3%.

European markets saw cuts of upto a percent with FTSE and CAC leading the tally. Eurozone GDP grew 0.3% q-o-q in the third quarter, below forecasts for a 0.4% expansion.

For the week, US indices plunged 3.6%-4.3%, breaking 6-week winning streak. European markets fell 2.6%-3.7%.

AT HOME

Sensex and Nifty fell 1% and 0.8% respectively on the first trading day of the new Samvat to close at the lowest level since 8th September. Sensex settled at 25611, down 256 points while Nifty lost 63 points to finish at 7762. BSE mid-cap and small-cap indices lost 1.4% and 0.8% respectively. Except a 0.7% and 0.2% gain in BSE Metal and Consumer Durable indices respectively, all the sectoral indices ended in red with Capital Goods Auto indices leading the tally, down 2% and 1.6% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 747 cr, 1250 cr and 343 cr respectively. DIIs were net buyers to the tune of rs 71 cr.

Rupee appreciated 22 paise to end at 66.095/$.

For the week, Sensex and Nifty lost 2.4% each.

OUTLOOK

133 peiple were killed in a brutal terrorist attacks in Paris across seven location on Friday. ISIS has claimed responsibility for the attack.

Japan's economy shrank an annualised 0.8% in the July-September quarter, worse than the expected 0.2% contraction and following a 1.2% fall in the preceding quarter.

Today morning Asian markets are trading with cuts of 0.5%-1.5% and SGX Nifty is suggesting about 50 points lower opening for our market.

Nifty has been on bear voyage and has been achieving the downside target one-by-one. Just to reiterate, when initial support level of 8230 was broken, we had given a downside target of 8030. Below 8030, 7840 was the next big target, which was the 61.8% retracement level of the entire 7540-8336 upmove. Last week, the benchmark even broke the 7840, which has opened up the possibility of the retest of the 7540 bottom.

Before 7540, 7690, the bottom made on 29th September, would be the immediate target to eye.

Immediate resistance on the hourly chart has moved lower to 7870, with the stop loss of which short positions should be held on to.

WPI for October would be released today and is expected to show a reading of -3.82% as against -4.54% in September. Core WPI is expected at -1.87% as against -1.93%.