10550 IS THE NEXT UPSIDE TARGET; TRAIL STOP-LOSS TO 10065

10550 IS THE NEXT UPSIDE TARGET;  TRAIL STOP-LOSS TO 10065

WORLD MARKETS

After opening in red, US indices saw a sustained northward move through the session to end higher with Dow and S & P 500 up 0.6% each  while Nasdaq climbed 1.1%. Optimism over economic recovery and strength in tech stocks outweighed concerns of surging coronavirus cases.

The U.S. saw more than 36,000 new cases reported on Sunday after more than 30,000 new cases were reported on both Friday and Saturday. Texas Gov. Greg Abbott warned that “additional measures are going to be necessary” if coronavirus cases and hospitalizations continued spiking.

Brent crude rose 89 cents, or 2.1%, to $43.08 per barrel while WTI gained 71 cents, or 1.8%, to settle at $40.46 per barrel.

European markets fell 0.6%-0.8%. Germany’s Robert Koch Institute for public health said the coronavirus reproduction rate jumped to 2.88 on Sunday, up from 1.79 a day earlier.

Earlier, China kept its benchmark lending rate unchanged, with the 1-year loan prime rate left at 3.85%.

AT HOME

Sensex and Nifty gained 0.5% and 0.6% respectively, extending the winning streak to third straight day and closing at the highest level in nearly three and half months. Sensex added 179 points to settle at 34911 while Nifty finished at 10311, up 66 points. BSE mid-cap and small-cap indices climbed 2% and 1.4% respectively. Except 0.4% lower IT index, all the BSE sectoral indices ended in green with Power and Metal indices leading the gains, up 2.8% and 2.7% respectively.

FIIs net bought stocks and index futures worth Rs 424 cr and 76 cr respectively but net sold stock futures worth Rs 770 cr. DIIs were net sellers to the tune of Rs 1288 cr.

Rupee appreciated 16 paise to end at 76.02/$.

US President Trump signed proclamation suspending H-1B and other work related visas till December 31.

OUTLOOK

White House trade advisor Peter Navarro, in an interview said that the trade deal with China was “over.” Asian markets are down 0.4%-1% and US futures have slipped nearly a percent owing to this statement. SGX Nifty however is trading around 10330, suggesting around 40 points higher start when compared to yesterday’s close of Nifty futures.

Readers would recall that we turned our view on Nifty bullish after 10070 hurdle was taken out and have been advising holding on to long positions with the trailing stop-loss.

In yesterday’s report we had said that 10328, the top made on  8th June, was the next upside target, upon decisive crossover of which, 10550, the 61.8% retracement level of the entire 12430-7511 fall, would be the next target/resistance to eye.

Nifty, after touching a high of 10393, closed at 10311 and is set to open above 10350 today.

10550, the 61.8% retracement level of the entire 12430-7511 fall, continues to be the next upside target/resistance to eye.

Immediate support on the hourly chart has moved up to 10065, with the stop-loss of which, trading longs should be held on to.

Asian Paints, Berger Paints and Page Industries will report their quarterly earnings today.

Markets will also keep an eye on a virtual meeting between the foreign ministers of India, China and Russia today.