NIFTY NEARLY ACHIEVES 11695 TARGET; VINDICATES OUR VIEW

NIFTY NEARLY ACHIEVES 11695 TARGET; VINDICATES OUR VIEW

WORLD MARKETS

US indices gained 0.2%-0.9% boosted by optimism around U.S.-China trade talks as well as the corporate earnings season.

Over the weekend, Chinese Vice Premier Liu He said Beijing would work with the U.S. to address one another’s trade concerns. He also said both sides have made “substantial progress” on trade.

Brent crude futures settled down 47 cents, or 0.8%, to $58.94 a barrel. WTI crude futures settled 47 cents, or 0.9%, lower at $53.31 a barrel.

European markets rose 0.2%-0.9%. In the U.K.’s Parliament on Monday, Prime Minister Boris Johnson was prevented from holding a key vote on the Brexit withdrawal deal he recently agreed with Brussels.

AT HOME

It was a strong finish to a rocking week as Sensex and Nifty indices climbed six tenth of a percent each, extending the winning streak to sixth straight day and closing at the highest level since 5th July and 17th July respectively. Sensex settled at 39298, up 246 points while Nifty added 75 points to finish at 11661. BSE mid-cap and small-cap indices soared 1.8% and 1.6% respectively. All the BSE sectoral indices ended in green with Power and Capital Goods indices leading the gains, up 2.6% and 2% respectively.

FIIs net bought stocks and stock futures worth Rs 37 cr and 656 cr respectively but net sold index futures worth Rs 560 cr. DIIs were net buyers to the tune of Rs 587 cr.

Rupee appreciated 2 paise to end at 71.14/$.

For the week, Sensex and Nifty surged 3.1% each, extending the winning streak to second straight week.

Reliance Industries reported a record Rs 11000 cr net profit for the quarter ended September. Revenue were slightly below estimate. Petchem segment posted strong growth. Gross refining margin stood at $9.4/bbl, in-line with estimate and higher than $8.1 reported in the previous quarter. Jio was a mixed bag as margin beat estimate but subscriber addition slowed.

Exit polls predicted a huge win for BJP in Maharashtra and Haryana.

Infosys ADR plunged 12% overnight after a whistle-blower complained about alleged accounting irregularities at the company.

OUTLOOK

Today morning, Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 25 points lower start for our market.

At the risk of repeating, we have been bullish on Nifty ever since 11325 hurdle was taken out on 9th October and have been advising holding on to long positions with a trailing stop-loss since then.

On last count, when Nifty achieved 11495 target, we had said that 11630, where a downward sloping trendline adjoining tops made in June and July is placed, was the next upside target, upon crossover of which, 11695, the top made in September, would be the next target. 

Nifty, on Friday, after achieving 11630 target, went all the way to 11685, nearly achieving 11695 target and vindicating our view.

11695, the top made in September, continues to be important immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 11772-11798, the gap created by a gap down opening on 8th July, would be the next target. Above 11798, 11982, the top made in July, would be the next target/resistance to eye.

Meanwhile, immediate support on the hourly chart has moved up to 11470, with the stop-loss of which, existing longs can be held on to.

Axis Bank, Kotak Bank, Bajaj Finance, Bajaj Finserve and Asian Paints will report their quarterly earnings today.