17377-17414 IS THE NEXT TARGET ZONE; TRAIL STOP-LOSS TO 16650

 

17377-17414 IS THE NEXT TARGET ZONE; TRAIL STOP-LOSS TO 16650

 

WORLD MARKETS

 

US indices climbed 1%-1.2% despite the latest GDP report showing a second-straight quarter of contraction, as markets bet the economic downturn would soon cause the Federal Reserve to end its aggressive hiking campaign.

 

U.S. economic growth fell 0.9% in the second quarter, as against the estimate of 0.3% growth. First-quarter GDP declined by 1.6%.

 

US 10-year treasury yield fell 10 bps to 2.68%. Dollar index fell a fourth of a percent to 106.21. Gold rose 1.3% to $1756 per ounce.

 

Brent crude futures rose 52 cents to $107.14 while WTI settled 84 cents, or 0.9%, lower at $96.42 a barrel.

 

In Europe, FTSE was little changed while DAX and CAC gained 0.9% and 1.3% respectively.

 

AT HOME

 

Sensex and Nifty soared 1.9% and 1.7% respectively to close at the highest level after 2nd May. Sensex settled at 56857, up 1041 points while Nifty added 287 points to finish at 16929. Nifty mid-cap and small-cap indices gained 0.8% each.  Except 0.4% lower Telecom index, all the BSE sectoral indices ended higher, with IT index on the top, up 2.5%, followed by 2.2% higher Finance and Teck indices.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1638 cr, 1797 cr and 1014 cr respectively. DIIs were net buyers to the tune of Rs 600 cr.

 

Rupee appreciated 15 paise to end at 79.75/$.

 

OUTLOOK

 

Today morning, Nikkei and Shanghai are up a third of a percent each while Hang Seng is down a quarter of a percent. SGX Nifty is suggesting around 200 points higher start for our market.

 

In yesterday's report we had said that 16750-16800 was the immediate resistance zone above which, 200-DMA, placed around 17035, would be next target.

 

Nifty surged to touch a high of 16947 before closing at 16929 and is set to open near 17100 today.

 

A higher start today would achieve 200-DMA target of 17030. 17377-17414, where two tops made in late April are placed, would be the next target zone; 16650 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

37700, 38134 are upside levels for Banknifty; 36750 is immediate support.