10111-10159 IS THE NEXT TARGET ZONE; TRAIL STOP-LOSS TO 9706

10111-10159 IS THE NEXT TARGET ZONE; TRAIL STOP-LOSS TO 9706

WORLD MARKETS

US indices gained 0.6%-1%, with the Dow and S & P 500 hitting 3-month highs, on continued optimism over economies emerging from coronavirus-led shutdowns.

WTI crude climbed $1.37, or 3.9%, to settle at $36.81 per barrel while Brent rose 2.7%, or $1.04, to $39.36 a barrel on expectations that major producers will agree to extend output cuts during a video conference likely to be held this week.

European markets rose 0.9%-3.8%

AT HOME

Sensex and Nifty soared 1.6% each, extending the winning streak to fifth straight day and closing at the highest level since 13 March and 11th March respectively. Sensex added 522 points to settle at 33825 while Nifty finished at 9979, up 153 points. BSE mid-cap and small-cap indices gained 1.2% and 1.8% respectively. Except 0.5% lower FMCG index, all the BSE sectoral indices ended in green with Realty index and Bankex leading the tally, up 4.6% and 3.2% respectively.

FIIs net bought stocks worth Rs 7498 cr (which included Rs 6900 on account of Kotak Mahindra Bank Block Deal) and index futures worth Rs 357 cr but net sold stock futures worth Rs 484 cr. DIIs were net buyers to the tune of Rs 441 cr.

Rupee appreciated 18 paise to end at 75.36/$.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting more than 100 points higher start for our market.

At the risk of repeating, we had turned our view on Nifty bullish after 9178 hurdle was taken out and have been advising holding on to long positions with a trailing stop-loss. In yesterday's report we had said that 9970, the 50% retracement level of the entire 12430-7511 fall, is the next important target/resistance to eye.

Nifty climbed to touch a high of 9995 and closed at 9979, achieving 9970 target and vindicating our view. The benchmark is set to open near 10100 today.

20-month moving average, placed around 10111, which roughly coincides with the 10159 top made on 13th March (the day on which we had also seen a bottom of 8555), is the next target/resistance to eye. Above 10159, 10334, the upper end of the gap created by gap-down opening on 12th March, would be the next target to eye.

9706, the upper end of the gap created by Monday's gap-up opening, would now act as immediate support, with the stop-loss of which, trading longs can be held on to.