NIFTY REBOUNDS FROM THE VICINITY OF 200-DMA SUPPORT; 11310 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS FROM THE VICINITY OF 200-DMA SUPPORT; 11310 IS THE IMMEDIATE HURDLE

WORLD MARKETS

Dow gained 0.1% while S & P 500 and Nasdaq fell 0.2% and 0.4% respectively, awaiting developments from U.S.-China trade talks this week in Shanghai as well as monetary policy decisions from Fed on Wednesday.

Brent futures rose 0.2% to $63.60 a barrel while WTI climbed 1.2% to $56.87.

In Europe, FTSE soared 1.8% but DAX ended flat and CAC fell 0.2%.

AT HOME

Sensex and Nifty fell 0.5% and 0.8% respectively to close at the lowest level since Mid-May, marking a 2-1/2 month low. Sensex settled at 37686, down 196 points while Nifty lost 95 points to finish at 11189. BSE mid-cap and small-cap indices fell 0.7% and 1% respectively. BSE Auto and Metal indices tumbled 3.6% and 3% respectively becoming top losers among the sectoral indices while IT index and Bankex gained 0.6% and 0.2% respectively.

FIIs net sold stocks worth Rs 704 cr while DIIs were net buyers to the tune of Rs 1352 cr.

Rupee appreciated 16 paise to end at 68.73/$.

Indiabulls Housing stock tumbled after BJP Leader Subramanian Swamy sent a letter to PM Modi, accusing the Indiabulls group of of Rs 1 lakh crore fraud.

Grasim slipped after Vodafone Idea, where it holds 11.6% stake, collapsed 27% after reporting net loss of Rs 4874 cr in the quarter ended June 30.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.2%-0.7% and SGX Nifty is suggesting about 20 points higher start for our market.

At the risk of repeating, we have been negative on Nifty ever since 11580 support was taken out and have been advising holding on to short position with a trailing stop-loss.

After Nifty achieved 11300-11250 targets, we have been working with next target of 200-DMA, which had moved up to 11135 yesterday.

Nifty yesterday plunged to 11152 before closing at 11189, nearly achieving the 200-DMA level and vindicating our view.

200-DMA has now moved up to 11140, which is followed by 11108 bottom made in May, making 11140-11108 an important support zone. If 11108 breaks, 20-month moving average, placed around 11000, would be next crucial support.

Immediate resistance on hourly chart has now moved lower to 11310, with the stop-loss of which, existing shorts can be held on to.

Axis Bank, Tech Mahindra and Hero MotoCorp will report their quarterly earnings today.