STAY SHORT WITH THE STOP-LOSS OF 16250

 

STAY SHORT WITH THE STOP-LOSS OF 16250

 

WORLD MARKETS

 

US indices surged 1.5%-3.8% on Friday, with Nasdaq posting its strongest one-day gain since November 2020

 

U.S. import prices were unexpectedly flat in April. University of Michigan showed its preliminary reading of consumer sentiment for early May deteriorated to its lowest level since August 2011 as concerns about inflation persisted.

 

US 10-year treasury yield rose 7 bps to 2.92%. Dollar index fell 0.3% to 104.46. Spot gold fell 0.7% to $1,808.89 per ounce.

 

Brent futures rose $4.10, or 3.8%, to $111.55 a barrel and WTI crude rose $4.36, or 4.1%, to settle at $110.49.

 

European markets gained 2.1%-2.6%. Euro area industrial production shrank by 1.8% in March from the previous month, a sharper downturn than the 1% expected. French inflation was confirmed at an annual 5.4% in April

 

For the week, Dow fell 2.1%, extending the losing streak to seventh straight week while S & P 500 and Nasdaq slipped 2.4% and 2.8% respectively for their sixth consecutive negative week. Dollar index rose 0.8% for its sixth straight week of gains. Gold tumbled 3.8%, losing for the fourth week in a row. Oil ended the week modestly lower.

 

AT HOME

 

After gaining more than a percent and half, benchmark indices gave away all the gains in late noon plunged to end with modest cuts. Sensex settled at 52793, down 136 points while Nifty lost 25 points to finish at 15782. Nifty mid-cap and small-cap indices however gained 1% and 0.9% respectively, snapping 5-day and 9-day losing streak respectively. BSE Auto and Industrials indices gained 2.5% and 1.7% respectively, becoming top gainers among the sectoral indices while Metal and Utilities indices tumbled 2.5% and 2.4% respectively, becoming top losers.

 

FIIs net sold stocks worth Rs 3780 cr but net bought index futures and stock futures worth Rs 2859 cr and 533 cr respectively. DIIs were net buyers to the tune of Rs 3170 cr.

 

Rupee depreciated 3 paise to end at 77.45/$.

 

For the week, Sensex and Nifty tumbled 3.7% and 3.8% respectively, extending the losing streak to fifth consecutive week and closing at the lowest level after the week ended 30th July 2021.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are up 1% and 0.6% respectively while Shanghai is up 0.1%. Asian markets are trading with gains of SGX Nifty is suggesting around 80 points higher start for our market.

 

In Friday's report we had said that 15671, the low made in March, was the crucial support to eye and that immediate hurdle on the hourly chart had come down to 16250, with the stop-loss of which, trading shorts could be held on to.

 

Nifty touched a low of 15740 before closing at 15782.

 

15671, the low made in March continues to be the crucial support to eye, upon breach of which, next meaningful support will come around 15100, where a downward sloping trendline adjoining bottoms made in December 2021 and March 2022 is placed; 16250 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 32155, the low made in March, is the important immediate support, upon breach of which, 34-month moving average, placed around 30700, would be the next downside level to eye. 34100 is the immediate hurdle on the hourly chart.