9039 IS THE NEXT HURDLE; STAY LONG WITH THE STOP-LOSS OF 8360

9039 IS THE NEXT HURDLE; STAY LONG WITH THE STOP-LOSS OF 8360

WORLD MARKETS

After rising more than 3% at the open on tentative signs that coronavirus outbreaks in some of the biggest U.S. hot spots may be leveling, US indices gave away all the gains through the session to end with cuts of 0.1%-0.3% on the back of a slide in oil and pessimism from Goldman Sachs as potential headwinds during the session.

Goldman Sachs' chief equity strategist warn ‘risk to the downside is greater’ despite Dow’s recent rally.

WTI crude fell 9.4% to $23.63 per barrel while Brent fell 3.6% to  $31.87 as optimism over potential output cut was overshadowed by a worsening crude oil glut and the threat of a deeper-than-expected global recession.

Japan declared Tuesday a state of emergency to combat coronavirus infections in major population centers. Singapore also passed a set of laws that bans social gatherings of any size in both private and public areas. Meanwhile, China lifted travel restrictions in Wuhan — the virus epicenter in mainland China — effective from Wednesday, marking the end of a lockdown that began on Jan. 23.

European markets gained 2.1%-2.3%.

AT HOME

Bulls started the new week with a bang as benchmark indices soared nearly 9%, registering biggest single day gain since 18 May 2009. Sensex settled at 30037, up 2476 points while Nifty added 708 points to finish at 8792. BSE mid-cap and small-cap indices gained 5.4% and 4.1% respectively. All the BSE sectoral indices ended in green with Bankex and Energy indices leading the tally, up 10.7% and 10% respectively. All the Nifty stocks ended higher with Indusind Bank and Axis Bank being the top gainers, up 25% and 20.1% respectively. BSE advance-decline ratio stood at 3.4:1.

FIIs net bought stocks, index futures and stock futures worth Rs 742 cr, 2368 cr and 649 cr respectively. DIIs were net buyers to the tune of Rs 423 cr.

Rupee appreciated 59 paise to end at 75.62/$.

OUTLOOK

Today morning, Nikkei is flat while Hang Seng and Shanghai are off 0.9% and 0.5% respectively. SGX Nifty is suggesting about 150 points lower start for our market.

In yesterday's report we had said that 8678, the top made last Tuesday, was the immediate hurdle to eye, upon crossover of which, 9039, the top made on 27th March, would the bigger resistance.

Nifty crossed 8678 hurdle and surged all the way to 8819 before closing at 8792 and is set to open near 8650 today.

9039, the top made on 27th March, continues to be major resistance to eye on the way up. Above 9039, 9300, where an upward sloping trendline adjoining recent tops on the hourly chart is placed, would be the next hurdle to eye.

8360, the low made yesterday, would now act as immediate support, upon breach of which, 8055, the low made on Friday, would be next important support.

Meanwhile, trading longs can be held on to with the stop-loss of 8360.