Wednesday, December 9, 2015

7700 ACHIEVED, 7540 NEXT

7700 ACHIEVED, 7540 NEXT

WORLD MARKETS                             

Dow and S & P 500 fell 0.9% and 0.6% respectively while Nasdaq lost 0.1% yesterday as soft China trade data and some anxiety ahead of the Fed's meeting next weighed on the sentiment.

China's November exports fell 6.8% y-o-y in their fifth month of contraction, while imports were down 8.7%, marking a record 13th month of decline. Shanghai 

Nymex oil settled 14 cents or 0.4% lower at $37.51 a barrel. Brent fell 44 cents to $40.28 a barrel.

European markets, weighed down by basic resources sector, tumbled 1.6%-2.3%.

AT HOME

Benchmark indices plunged eight tenth of a percent in today's trade, extending the losing streak to fifth straight day and closing at the lowest level since 8th September, marking a 3-month low. Sensex settled at 25310, down 220 points while Nifty lost 64 points to finish at 7702. BSE mid-cap and small-cap indices lost 1.2% and 1.3% respectively. All the BSE sectoral indices ended in red with Realty and Metal indices leading the tally, down 3.7% and 3.2% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 518 cr, 192 cr and 193 cr respectively. DIIs were net buyers to the tune of Rs 590 cr.

Rupee depreciated 11 paise to end at 66.8350/$, the lowest level since Sep 4 2013

Congress stalled proceedings in Parliament yesterday after the Delhi High Court rejected the plea of Congress President Sonia Gandhi and her son Rahul to quash summons against them in the National Herald case.

OUTLOOK

Today morning, Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting about 30 points lower opening for our market.

At the risk of repeating, we had advised going short on Nifty when immediate support of 7880 was broken on 3rd December for targets of 7760 followed by 7700. We had also said that a breach of 7700 would open up the possibility of retest of the 7540 bottom made in early September.

The benchmark touched a low of 7685 yesterday before closing at 7702, achieving the 7700 target.


The setup however continues to be and 7540 continues to be the next downside target to eye. Immediate resistance on the hourly chart has moved to 7820, with the stop loss of which short positions should be held on to.

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