TRAIL STOP-LOSS TO 17980

 

TRAIL STOP-LOSS TO 17980

 

WORLD MARKETS

 

US indices tumbled 1.3%-2.7% on Friday, extending the weekly sell-off.

 

Netflix shares tumbled 21.8%, weighing on the S&P 500 and the Nasdaq, after the streaming giant forecast weak subscriber growth. Shares of competitor Walt Disney fell 6.9%, dragging on the Dow.

 

US 10-year treasury yield fell more than 4 bps to 1.762%. Dollar index fell 0.1% to 95.63. Gold fell 0.2% to $1834 per ounce.

 

Brent futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while WTI crude fell 41 cents, or 0.5%, to settle at $85.14.

 

European markets fell 1.2%-1.9%. Britain’s GfK Consumer Confidence Index sank to -19 in January from -15 in December, its lowest level since February 2021, as soaring inflation and the prospect of further interest rate hikes dampened the outlook. U.K. retail sales dropped by 3.7% in December from the previous month,  well below the 0.6% fall expected.

 

For the week, Nasdaq nosedived 7.6% for its worst since October 2020. Dow and S & P 500 fell 4.6% and 5.7% respectively. Dollar index rose 0.4%. Both crude benchmarks rose for a fifth week in a row, gaining around 2% this week. Gold rose 0.9% for its second weekly gain.

 

AT HOME

 

After falling a percent and half, benchmark indices recouped half of the losses in last half an hour to end lower by nearly three fourth of a percent, extending the losing streak to fourth consecutive session. Sensex settled at 59037, down 427 points while Nifty lost 140 points to finish at 17617. This was the lowest close for both the indices after 31st December. Nifty mid-cap and small-cap indices nosedived 2.4% and 2.3% respectively. Except 0.05% higher FMCG index, all the BSE sectoral indices ended in red, with Telecom and Consumer Durables indices leading the losses, down 3% and 2.9% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 3148 cr, 616 cr and 1003 cr respectively. DIIs were net buyers to the tune of Rs 269 cr.

 

Rupee appreciated 8 paise to end at 74.41/$.

 

For the week, Sensex and Nifty tumbled 3.5% each, snapping 4-week winning streak and suffering the worst weekly fall in nearly 2-months.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.4%-0.9% and SGX Nifty is suggesting more than 100 points lower start for our market.

 

In Friday's report we had said that 34-DMA, placed around 17525, was the next downside level to eye and had advised trailing stop-loss in short positions to 18100.

 

Nifty, after touching a low of 17485, rebounded to end at 17617 and is set to open near 17500 today.

 

17485, the low made on Friday, which roughly coincided with the 34-DMA, is the important immediate support to eye. If this breaks, 17380 and 17050, the 50% and 67% retracement levels of the entire 16410-18350 upmove, would be next downside levels to eye. Immediate resistance on the hourly chart has moved lower to 17980, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 37224, the low made on Friday, which coincided with 20-DMA, is the immediate support to eye. If that breaks, 34-DMA, placed around 36800, would be the next important support. 38150 is the immediate hurdle on the hourly chart.

 

Axis Bank will report its quarterly earnings today.