NIFTY NEARLY ACHIEVES 7980 TARGET; 7890 IS THE IMMEDIATE SUPPORT

NIFTY NEARLY ACHIEVES 7980 TARGET; 7890 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

US and European markets were shut on Friday for the New Year's day.

AT HOME

After falling about half a percent in the initial trade, benchmark indices recouped all the losses and some more through the session to end higher by nearly a fifth of a percent. Sensex settled at 26161, up 43 points while Nifty added 17 points to finish at 7963. BSE mid-cap and small-cap indices gained 0.9% each. Except a 0.3% each cut in BSE IT and Teck indices, all the sectoral indices ended in green with Realty and Industrial indices leading the tally, up 2% and 1.5% respectively.

FIIs net bought stocks worth Rs 228 cr but net sold index futures and stock futures worth Rs 75 cr and 219 cr respectively. DIIs were net sellers to the tune of Rs 81 cr.

Rupee appreciated 2 paise to end at 66.14/$.

Maruti Suzuki reported 8.5% growth in December sales at 1.19 lakh units. Eicher reported 49% growth at 40453 units. M & M showed 4% growth at 37915 units. Ashok Leyland reported a 31.4% increase at 12209 units. TVS Motors reported 4% uptick at 2.02 lac units. Tata Motors showed 4% decline at 39973 units.

For the week, Sensex and Nifty gained 1.2% and 1.3% respectively, extending the winning streak to third straight week.

OUTLOOK

China's Caixin Manufacturing PMI for December has come in at 48.2, down from 48.6 in November, contracting for a tenth month and coming in below a forecast for 49.

Today morning Asian markets are trading with cuts of 0.5%-2% and SGX Nifty is trading around 7930, which suggests around 50 points lower opening as Nifty future closed at 7982 on Friday.

At the risk of repeating, we have been working with the target of 7980 ever since 7850 hurdle was taken out.

The benchmark on Friday touched a high of 7973 before closing at 7963, nearly achieving the 7980 target and vindicating our view.

Now 7980, as we have been mentioning, is the top made in December and also the immediate previous top on the daily chart and hence an important hurdle to negotiate. A decisive crossover of it can take the benchmark to around 8120, where the 34-month moving average is placed.

7890 continues to be immediate support, a breach of which would generate a sell on the hourly chart and would pave the way for the further correction.

Traders are advised to wait for the crossover of 7980 for taking a fresh positive view on Nifty. Similarly a breach of 7890 should be awaited for initiating short positions.