NIFTY ACHIEVES 7850 TARGET

NIFTY ACHIEVES 7850 TARGET

WORLD MARKETS                             

US indices plunged 1.3%-1.5%, breaking three-day winning streak, as energy stocks tumbled on the back of falling oil. Material stocks were pressured by lower commodities on account of strong dollar.

Nymex oil fell 57 cents, or 1.6%, to $34.95 a barrel, its lowest since February 2009. Brent settled about 0.9% lower at $37.06 a barrel, its lowest in nearly seven years. Natural gas ended 2% percent lower at $1.755, its lowest since March 1999.

The U.S. current account deficit in the third quarter increased 11.7% to $124.1 billion, its highest level in nearly seven years, as a strong dollar weighed on exports and the profits of multinational corporations. The Philly Fed index for December was minus 5.9, the lowest of the year after a positive 1.9 print in November. Leading indicators for November showed a 0.4% rise, with October unrevised, up 0.6%. Initial jobless claims came in at 271,000.

Dollar index climbed 1.3%. Gold tumbled $27 to $1050 an ounce.

European markets gained 0.7%-2.6% with DAX leading the tally.

AT HOME

Benchmark indices soared a percent and fifth yesterday, extending the winning streak to fourth straight day and closing at the highest level since 3rd December. Sensex settled at 25804, up 309 points while Nifty rose 93 points to finish at 7844. BSE mid-cap and small-cap indices climbed 1.6% and 1.7% respectively. All the BSE sectoral indices ended in green with Metal and Basic Material indices leading the tally, up 2.5% and 2.1% respectively.

FIIs net bought stocks and stock futures worth Rs 638 cr and 25 cr respectively but net sold index futures worth Rs 526 cr. DIIs were net sellers to the tune of Rs 366 cr.

Rupee appreciated 31 paise to end at 66.42/$.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5%-0.8% and SGX Nifty is suggesting about 50 points lower opening for our market.

Readers would recall that ever since Nifty broke immediate hurdle of 7700, we had set a target of 7815-7850 where 7815 was the 61.8% retracement level of the recent 7980-7550 fall and 7850 was the 34-DMA.

The benchmark yesterday touched a high of 7853, achieving the above mentioned target and vindicating our view.

7850 continues to be important immediate hurdle, a crossover of which is required for the further upmove.  7980, the top made in early December, would be the next target if that happens.

Immediate support on the hourly chart has moved up to 7690, a breach of which will generate a sell on the hourly chart and can take Nifty back to 7540 bottom.

Traders are advised to wait for the crossover of 7850 for creating fresh longs. Existing longs can be held with the stop loss of 7690.