NIFTY NEARLY ACHIEVES 9530 TARGET; TRAIL STOP-LOSS TO 9175

NIFTY NEARLY ACHIEVES 9530 TARGET; TRAIL STOP-LOSS TO 9175

WORLD MARKETS

US indices, after rising nearly a percent, slipped sharply in late trade to end with cuts of 0.2%-0.6%. The dip happened after President Trump said he would be giving a news conference Friday regarding China.

Initial upmove happend after latest unemployment data indicated that the worst of the economic damage from the coronavirus pandemic may be over. While 2.1 million Americans filed for unemployment benefits last week which was slightly higher than estimates, continuing claims, which represent a better unemployment picture, plunged by nearly 4 million in their first decline since the coronavirus outbreak.

Trump’s announcement came after China approved a national security bill for Hong Kong. The bill will bypass Hong Kong’s legislature, which allows additional freedoms mainland China does not have.

Brent futures rose 55 cents, or 1.6%, to settle at $35.29 a barrel while WTI crude rose 90 cents, or 2.7%, to $33.17 per barrel.

Main European markets gained 1.1%-1.8%.

Data today morning showed Japan’s retail sales fell 13.7% year-on-year in April.

AT HOME

Benchmark indices climbed 1.9% each, extending yesterday's mammoth upmove and closing at the highest level since 30th April, marking a 1-month high. Sensex settled at 32200, up 595 points while Nifty added 175 points to finish at 9490. BSE mid-cap and small-cap indices gained 1.3% and 1.4% respectively. All the BSE sectoral indices ended in green with Capital Goods index leading the tally, up 5.1%, followed by 3.5% higher Auto and Industrials indices.

FIIs net bought stocks and stock futures worth Rs 2354 cr and 2123 cr respectively but net sold index futures worth Rs 354 cr. DIIs were net buyers to the tune of Rs 145 cr.

Rupee depreciated 3 paise to end at 75.7450/$.

For the May derivative series, Nifty fell 3.8%.

OUTLOOK

Today morning, Asian markets are trading with cuts of upto 0.6% and SGX Nifty is suggesting around 25 points lower start for our market.

In yesterday's report we had said that Nifty had broken out of a trendline resistance adjoining recent tops on daily chart and had also crossed 20 as well as 34-DMAs. We had also said that 9475, followed by 9530, which are 61.8% and 67% retracement levels of entire 9889-8806 fall, would be the upside targets to eye.

Nifty soared to touch a high of 9511 before closing at 9490, achieving 9475 target and moving close to second target of 9530. The benchmark is set to open near 9450 today.

9530, the 67% retracement levels of entire 9889-8806 fall continues to be upside hurdle, upon crossover of which, 9584, the top made on 13^th May, would be the next target/resistance. Immediate support on the hourly chart has moved up to 9175, with the stop-loss of which, trading longs can be held on to.

Q4 FY20 GDP data will be released today evening and is expected to show a growth of 2.2% vs 4.7% QoQ and 5.7% YoY.  For FY20, GDP growth is likely to have slowed down to 4.4% from 6.1% last year, marking the slowest growth in 20 years.