STAY LONG WITH THE STOP-LOSS OF 17850

 

STAY LONG WITH THE STOP-LOSS OF 17850

 

WORLD MARKETS

 

After starting in red on the back of hotter-than-expected retail sales data, US indices saw a sustained northward move through the session to end with gains of 0.1%-0.9%.

 

January retail sales rose 3%, it's highest pace in nearly two years, while economists anticipated a 1.9% increase.            

 

US 10-year treasury yield rose 6 bps to 3.809%. Dollar index rose half a percent to 103.81. Gold dipped 1% to $1836 per ounce.

 

Brent crude eased 0.2% to $85.38 a barrel and WTI crude fell 0.6% to $78.59.

 

European markets gained 0.6%-1.2%. U.K. CPI fell for the third month in a row January to hit 10.1%, below expectations near 10.3%.

 

AT HOME

 

After falling nearly 0.4% in the initial trade, Sensex and Nifty reversed these losses through the session to end higher by 0.4% and 0.5% respectively. Sensex settled at 61275, up 242 points while Nifty added 86 points to finish at 18015. Nifty mid-cap and small-cap indices gained 0.6% and 0.3% respectively. Except 0.4% and 0.1% lower FMCG and Pharma indices respectively, all the NSE sectoral indices ended higher, with Realty and IT indices being the top gainers, up 1.3% and 1.1% respectively.

 

FIIs net bought stocks and stock futures worth Rs 432 cr and 1921 cr respectively but net sold index futures worth Rs 262 cr. DIIs were net buyers to the tune of Rs 517 cr.

 

Rupee depreciated 4 paise to end at 82.80/$.

 

India's January trade deficit stood at $17.76 bn vs $23.76 bn month-on-month and $17.34 bn y-o-y.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of 0.4%-1.2% and SGX Nifty is suggesting around 25 points higher start for our market.

 

In yesterday's report we had said that a crossover of Tuesday's high, 17954, would confirm a breakout, which would pave the way for 18200, the top made on 24th January. We had also advised going long above 17954, keeping 17750-17700 support area as the stop-loss.

 

Nifty, after making a low of 17853 in the initial trade, surged to 18034 before closing at 18015.

 

18200, the top made on 24th January, continues to be next upside target to eye; 17850 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

For Banknifty, 42015, the top made on the Budget Day, which also coincides with 34-DMA, continues to be important immediate hurdle, upon crossover of which, 43078, the top made on 24th January, would be next upside level to eye; On the way down, 41100 is the immediate support on the hourly chart.