NIFTY SET TO ACHIEVE 10941 TARGET; TRAIL STOP-LOSS TO 10800

NIFTY SET TO ACHIEVE 10941 TARGET; TRAIL STOP-LOSS TO 10800

WORLD MARKETS

S & P 500 ended flat while Dow and Nasdaq gained 0.4% each but ended off-the day high on growing fears of a government shutdown, a slide in oil prices and uncertainty over Fed policy.

Government shutdown fears were renewed after Senate Majority Lead Mitch McConnell said that a proposed government funding plan was rejected by his Democrat colleagues.

US crude plunged $3.64 or 7.3% to $46.24 a barrel, the lowest settle since August 2017, as the United States and Russia continue to pump at record levels while signs of faltering demand are emerging. Brent fell $3.35 or 5.6% to $56.26.

President Trump took aim at the Fed again yesterday, urging central bank members to not "let the market become any more illiquid than it already is.

European markets fell 0.3%-1.1%. Germany's Ifo business sentiment index dropped to 101.0 in December, down from 102.0 in November.

AT HOME

After falling more than half a percent in first hour, benchmark indices recouped all the losses to end higher by a fifth of a percent, extending the winning streak to sixth consecutive day. Sensex settled at 36347, up 77 points while Nifty added 20 points to finish at 10908. BSE mid-cap and small-cap indices gained 0.2% and 0.4% respectively.  BSE Capital Goods and Power indices gained 1.1% each, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 1.1% each.

FIIs net bought stocks worth Rs 145 cr but net sold index futures and stock futures worth Rs 951 cr and 260 cr respectively. DIIs were net sellers to the tune of Rs 183 cr.

Rupee appreciated 110 paise to end at 70.44/$.

Shares of Zee Entertainment plunged after brokerage firms revised ratings and price target on growth concerns and enhanced competition.

OUTLOOK

Today morning, Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 50 points higher start for our market.

At the risk of repeating, we had turned our view positive after Nifty took out the immediate hurdle of 10600 and have been asking holding on to long positions with a trailing stop-loss. In yesterday's report we had said that "10941, the top made in early December, continues to be immediate target as well as resistance to eye. Once that is taken out decisively, 11090, the 61.8% retracement level of the entire 11760-10004 fall, would be the next level to eye."

Nifty yesterday closed at 10908 and a higher start today will see it achieving 10941 target. Upon decisive crossover of 10941, 11090, as mentioned above, would be the next target/resistance to eye.

Immediate support on the hourly chart has moved up to 10800, with the stop-loss of which, trading longs can be held on to.

The Fed is widely expected to hike its benchmark overnight lending rate for a fourth and final time of 2018 when it concludes a two-day policy meeting today. Markets will particularly scrutinize — and react to — the Fed's outlook for 2019.