NIFTY ACHIEVES 7840 TARGET; STAY SHORT WITH THE STOP LOSS OF 8020

NIFTY ACHIEVES 7840 TARGET; STAY SHORT WITH THE STOP LOSS OF 8020

WORLD MARKETS                             

US indices plunged a percent, weighed down by an increasing possibility of interest rate hike in December and weak trade data from China.

Nymex oil fell 1% to $43.87 a barrel, extending losses for a fourth straight day. Copper hit a six-week low.

European markets fell 1%-1.9%. German exports rose 2.6% month-on-month in September while imports were up 3.6%.

AT HOME

After a big gap down opening of more than 2% on the back of unexpected Bihar election results, benchmark indices recouped quite a bit of the lost ground through the session to end lower by just half a percent. Sensex settled at 26121, down 144 points while Nifty lost 39 points to finish at 7915. BSE mi-cap and small-cap indices in fact ended with gains of 0.4% and 0.8% respectively. BSE Consumer Durable and Auto indices gained the most among the sectoral indices, rising 2.2% and 1.2% respectively while Realty and Healthcare indices tumbled 2.2% and 1.3% respectively, becoming top losers.

FIIs net sold stocks, index futures and stock futures worth Rs 861 cr, 1485 cr and 187 cr respectively. DIIs were net buyers to the tune of Rs 621 cr.

Rupee tumbled 68 paise to end at 66.4375/$.

BPCL reported 57% q-o-q fall in net profit at Rs 1018 cr. Revenue fell 11% q-o-q to Rs 46476 cr. Other income shot up 108% to Rs 686 cr.

Tata Power reported a consolidated net profit of Rs 247 cr against loss of Rs 78 cr on strong operational performance. Revenue rose 11% to Rs 9541 cr. Operating profit grew 45% to Rs 2461 cr and margin expanded by 564 bps to 25.8%.

Winter Session of Parliament will begin from November 26.

OUTLOOK

China's October CPI has come in at 1.3%, missing the estimate of 1.5%. PPI has come in at -5.9%, the expected figure being -5.8%.

Asian markets are trading with cuts in the vicinity of a percent and SGX Nifty is suggesting about 60 points lower opening for our market.

Readers would recall that ever since Nifty broke 38.2% retracement level as well as the lower band of bollinger placed at 8030, we had been working with downside target of 7840, which is the 61.8% retracement level of the entire 7540-8336 upmove.

The benchmark opened with a big gap down and touched a low of 7772 in the initial trade before recovering quite a bit to close at 7915, achieving the 7840 target mentioned above and vindicating our view. 

A breach of 7840, on closing basis, would open up the possibility of the retesting of the 7540 bottom made in early September.

Immediate resistance on the hourly chart is placed at 8020, with the stop loss of which trading shorts should be held on to.

Hindalco will report its quarterly earnings today.