STAY SHORT WITH THE STOP-LOSS OF 12150

STAY SHORT WITH THE STOP-LOSS OF 12150

WORLD MARKETS

US markets were shut yesterday for the President’s Day holiday.

Main European markets gained three tenth of a percent each after China’s central bank cut interest rates in a bid to aid its economy amid the coronavirus outbreak.

The People’s Bank of China announced that it would provide medium-term funding of 200 billion yuan ($29 billion) to commercial lenders and cut its main interest rate by 10 basis points to 3.15%.

Brent crude fell 8 cents to $57.24 a barrel while WTI rose 2 cents to $52.07.

AT HOME

Sensex and Nifty slipped 0.6% and 0.5% respectively, extending the losing streak to third straight day. Sensex lost 202 points to settle at 41055 while Nifty finished at 12045, down 67 points. Nifty mid-cap and small-cap indices tumbled 0.9% and 1.3% respectively, extending the losing streak to fourth straight day. Oil & Gas and Utilities indices fell 2.4% and 2.1% respectively, becoming top losers among the sectoral indices while Consumer Durables index rose 1.6%, becoming top gainer, followed by 0.3% higher IT index.

FIIs net sold stocks and stock futures worth Rs 374 cr and 611 cr respectively but net bought index futures worth Rs 520 cr. DIIs were net sellers to the tune of Rs 154 cr.

Rupee appreciated 10 paise to end at 71.30/$.

OUTLOOK

Apple has warned it may not meet its quarterly revenue forecast because of lower iPhone supply globally and lower Chinese demand as a result of disruptions from the coronavirus outbreak. Owing to this, Apple suppliers in Asia are trading lower this morning.

Asian markets are trading with cuts of 0.2%-1% and SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had said that 20-DMA, placed around 12060, was the next support, upon breach of which, 11990, the bottom made last week, would be the next important support.

Nifty, after achieving 12060 target, fell further to touch a low of 12037 and finally closed at 12045.

11990, the bottom made last week, continues to be the next important support. If 11990 gets violated, 11930 and 11825, the 50% and 67% retracement levels of the recent 11614-12246 upmove, would be next support levels to eye.

Immediate hurdle on the hourly chart is placed around 12150, with the stop-loss of which, trading shorts can be held on to.