NIFTY ACHIEVES 14222 TARGET; STAY SHORT WITH THE STOP-LOSS OF 14525

 

NIFTY ACHIEVES 14222 TARGET; STAY SHORT WITH THE STOP-LOSS OF 14525

 

WORLD MARKETS

 

US indices ended marginally lower yesterday, digesting a batch of corporate earnings and ahead of policy announcement from the Federal Reserve on Wednesday. Nasdaq snapped 5-session winning streak.

 

American Express fell 4.1% after posting 15% drop in quarterly profits and Verizon lost 3.2% after prepaid phone subscriber number missed estimates. On the flip side, 3M and Jhonson & Jhonson rose 3.3% and 2.7% respectively.

 

U.S. consumer confidence rose moderately in January amid lingering concerns about the COVID-19 pandemic. Data from S&P CoreLogic Case-Shiller showed home prices rose 9.5% y-o-y in November, the strongest annual pace in more than six years.

 

Brent crude fell 11 cents, or 0.2%, tot $55.77, while U.S. crude fell 30 cents, or 0.6%, to $52.47.

 

Dollar Index fell 0.2% to 90.173. Spot gold fell 0.2% to $1,851.26 per ounce

 

European markets rose 0.2%-1.7% with DAX on the top.

 

AT HOME

 

After opening with gains of nearly eight tenth of a percent, Sensex and Nifty nosedived more a percent and half to end with cuts of 1.1% and 0.9% respectively, extending the losing streak to third straight day. Sensex settled at 48347, down 530 points while Nifty lost 133 points to finish at 14238. Nifty mid-cap and small-cap indices too fell nearly a percent. BSE Energy index plunged 4.4%, becoming top loser among the sectoral indices, followed by 2.2% lower Oil & Gas index. Healthcare and Metal indices were the top gainers, up 0.9% and 0.2% respectively.

 

FIIs net sold stocks worth Rs 765 cr but net bought index futures and stock futures worth Rs 1861 cr and 672 cr respectively. DIIs were net sellers to the tune of Rs 388 cr.

 

Rupee appreciated 4 paise to end at 72.93/$.

 

OUTLOOK

 

IMF raised its global economic growth forecast for this year to 5.5%, up by 0.3% from October’s forecasts.

 

Today morning, Nikkei and Hang Seng are up 0.3% each while Shanghai is off 0.1%. SGX Nifty is trading around 14160, suggesting around 90 points lower start when compared to Monday's close of Nifty futures.

 

In Monday's report we had said that 20-DMA, placed around 14320, was the immediate support, upon breach of which, 14222, the bottom made last week, would be the next important level to eye.

 

Nifty broke 14320 support and plunged all the way to 14218 before closing at 14251, achieving 14222 target and vindicating our view. The benchmark is set to open below 14200 today.

 

34-DMA, placed around 14050, is the next important support to eye.

 

Immediate hurdle on the hourly chart is placed around 14525, with the stop-loss of which, trading shorts can be held on to.

 

HUL and Axis Bank will report their quarterly earnings today.