NIFTY AGAIN RESISTED NEAR 34-WMA; TRAIL STOP-LOSS TO 8370

NIFTY AGAIN RESISTED NEAR 34-WMA; TRAIL STOP-LOSS TO 8370

WORLD MARKETS                             

Dow and S & P 500 fell 0.3% each while Nasdaq lost 0.6% with financials leading the losses on concerns of a hard Brexit and as uncertainty around President-elect Donald Trump's policies grew ahead of his inauguration scheduled for Friday.

Dollar index tumbled about 0.8% to 100.30, a one-month low, after Trump's comments that "dollar was too strong which makes it hard for American companies to compete with China".

In a speech, British Prime Minister Theresa May indicated the United Kingdom would seek a clean break from the European Union. She added, however, The U.K. government will put the Brexit deal it agrees with the European Union to a parliamentary vote.

The British pound skyrocketed more than 2.5% against the dollar, trading around $1.24, on track for its best day since 2008.

European markets, except a 0.2% higher Italy, fell 0.2%-1.5% with FTSE leading the losses

Speaking at the World Economic Forum in Davos, Chinese President XI Jinping said that nobody would emerge as a winner in a trade war. This was the first time a Chinese president ever attended the forum

AT HOME

After gaining about a third of a percent in the initial trade, benchmark indices saw a sustained downward move through the session to end lower by a fifth of a percent. Sensex lost 53 points to settle at 27236 while Nifty finished at 8398, down 15 points. BSE mid-cap index ended flat while small-cap index gained 0.3%. BSE Energy and Metal indices tumbled 2.1% and 1.5% respectively, becoming top losers among the sectoral indices while FMCG and Utilities indices were the top gainers, up 1% and 0.6% respectively.

FIIs net bought stocks worth Rs 142 cr but net sold index futures and stock futures worth Rs 170 cr and 305 cr respectively. DIIs were net sellers to the tune of Rs 607 cr.

Rupee appreciated 15 paise to end at 67.95/$.

In a relief to FPIs who were fearing multiple taxation, the tax department yesterday kept in abeyance its recent circular on indirect transfer of shares by foreign investors.

OUTLOOK

Today morning, except a 0.2% higher Hang Seng, other Asian markets are trading with cuts of upto 0.8% with Nikkei leading the losses. SGX Nifty is suggesting a marginally higher start for our market.

Readers would recall that after Nifty achieved 8430 target, we have been mentioning that a decisive crossover of this level, which coincides with 34-week moving average, is required for the fresh upmove.

Nifty, yesterday, after touching a high of 8440, slipped to end at 8398.

We would like to reiterate that a decisive crossover of 34-WMA, placed around 8435, is required for the fresh upmove. If that happens, 8560, the 61.8% retracement level of the 8970-7894 fall, would be the next target to eye.

Meanwhile, Nifty has been taking support around 8370 mark for past 3-sessions. A breach of 8370 would pave the way for further correction and next support area to eye in that case would be 8300-8275 where 8300 is the 200-DMA while 8275 is the top made in December.

Traders are advised to trail the stop-loss in long positions to 8370.