NIFTY TESTS 34-DMA SUPPORT

 

NIFTY TESTS 34-DMA SUPPORT

 

WORLD MARKETS

 

Nasdaq nosedived 2.5%, S & P 500 fell 0.8% while Dow managed to end 0.1% higher as a continuous rise in bond yields dented the appetite for growth stocks over economically sensitive stocks.

 

Big Tech stocks came under pressure with Apple, Amazon and Microsoft all dropping at least 2%. Tela plunged 8.6%. On the flip side, industrial giant Caterpillar and chemicals company Dow Inc. both climbed more than 3.5%. American Express and Chevron gained 3.2% and 2.7%, respectively. Disney jumped 4.4%.

 

The 10-year Treasury yield rose again yesterday to around 1.364% after jumping 14 basis points last week to its highest level since February 2020. The 30-year yield touched a one-year high of 2.2%.

 

Brent crude climbed $2.04, or 3.2%, to $64.95 a barrel, while U.S. oil rose $2.25, or 3.8%, to settle at $61.49 a barrel, driven by the expected slow return of U.S. crude output after last week’s deep freeze in Texas shut in production.

 

The dollar index fell 0.4% to a more than one-month low. Spot Gold rose 1.5% to $1808 an ounce.

 

European markets fell 0.1%-0.6%. The U.K. unveiled how it plans to lift lockdown measures gradually in the coming months, as its vaccination rollout maintains its good pace. Germany's Ifo business climate index for February improved by more than expected on both current conditions and expectations.

 

AT HOME

 

Sensex and Nifty plunged 2.2% and 2% respectively, suffering the worst fall in 2-months and extending the losing streak to fifth straight day. Sensex lost 1145 points to settle at 49744, while Nifty settled at 14675, down 306 points. Nifty mid-cap and small-cap indices fell 1.3% and 1.2% respectively. Except 2.2% and 0.3% higher Metal and Basic Materials indices, all the BSE sectoral indices ended in red with Energy and Realty indices leading the losses, down 2.9% each.

 

FIIs net sold stocks worth Rs 893 cr but net bought index futures and stock futures worth Rs 749 cr and 202 cr respectively. DIIs were net sellers to the tune of Rs 920 cr.

 

Rupee appreciated 14 paise to end at 72.50/$.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of 0.2%-0.6% and SGX Nifty is suggesting around 80 points higher start for our market.

 

Readers would recall that we had initiated negative view on Nifty after 15078 was breached and have been advising holding on to short positions with a trailing stop-loss.

 

In yesterday's report we had said that  14898, the low made Friday, was the immediate support, upon breach of which, 20-DMA, placed around 14760, would be the next target to eye.

 

Nifty broke 14898 and plunged all the way to 14635 before closing at 14675. The benchmark is set to open near 14750 today.

 

14635, the low made yesterday, also coincides with the 34-DMA and hence is the important immediate support to eye. Below 14635, 14514, the 50% retracement level of the recent 13596-15431 upmove, would be the next level to watch.

 

Immediate hurdle on the hourly chart has moved lower to 15100, with the stop-loss of which, trading shorts can be held on to.