STAY SHORT WITH THE STOP-LOSS OF 12325

STAY SHORT WITH THE STOP-LOSS OF 12325

WORLD MARKETS

US markets were shut yesterday for Martin Luther King Jr. Day.

The International Monetary Fund (IMF) said that the global economic outlook “remains sluggish” as it trimmed its growth forecasts for 2019 and 2020 to 2.9% and 3.3%, respectively.

Brent crude rose 37 cents, or 0.6%, to $65.22 a barrel while WTI added 24 cents, or 0.4%, to settle at $58.78.

In Europe, except 0.2% higher DAX, other markets ended with cuts of upto 0.6%.

AT HOME

After making a fresh record highs at the open, benchmark indices saw a sustained downward move through the session to end with deep cuts of a percent. Sensex plunged 416 points to settle at 41528 while Nifty finished at 12224, down 127 points. BSE mid-cap and small-cap indices fell 0.6% and 0.4% respectively, breaking 9-day winning streak. BSE Energy index and Bankex tumbled 2.7% and 1.6% respectively, becoming top losers among the sectoral indices while Telecom index climbed 1.9%, becoming top gainer, followed by 0.7% higher Really index.

FIIs net bought stocks and index futures worth Rs 6 cr and 134 cr respectively but net sold stock futures worth Rs 647 cr. DIIs were net sellers to the tune of Rs 1420 cr.

Rupee depreciated 2 paise to end at 71.10/$.

IMF cut India's FY20 GDP growth projection by 130 bps to 4.8%.

Kotak Mahindra Bank slipped after Net profit and NII came in below estimates and asset quality worsened.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.5%-1.5% with Hang Seng leading the losses while SGX Nifty is suggesting about 50 points lower start for our market.

In yesterday's report we had said that 12278, the low made last week, was the immediate support, with the stop-loss of which, trading longs can be held on to.

Nifty broke 12278 support and plunged all the way to 12216 before closing at 12224 and is set to open below 12200 today.

34-DMA, placed around 12150, is the next important support to eye. Below 12150, 12095, the 67% retracement level of the recent 11930-12430 upmove, would be the next support to eye.

12325 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.