TRAIL STOP-LOSS TO 14830

 

TRAIL STOP-LOSS TO 14830

 

WORLD MARKETS

 

US indices rose 0.7%-1% to hit fresh record highs on optimistic about further Covid stimulus and an economic recovery. A strong earnings season is also boosting the sentiment.

 

House Democrats on Monday unveiled the details of a relief proposal that included $1,400 direct checks with faster phase outs than previous bills. Treasury Secretary Janet Yellen said Sunday that if Biden’s stimulus plan is passed the U.S. could return to full employment by 2022.

 

Brent crude rose 2.1% to settle at $60.56 per barrel, while WTI settled 2% higher at $57.97 per barrel.

 

Dollar index fell 0.1% to 90.93. Spot gold rose 1.2% to $1,832 per ounce. Bitcoin soared 20% to hit $46000 mark after Tesla Inc said it had invested around $1.5 billion in the cryptocurrency

 

In Europe, DAX was flat, FTSE and CAC rose half a percent each while Italy climbed 1.5%  after former European Central Bank President Mario Draghi secured the support of two key parties for forming a new government. German industrial output was unchanged in December, weaker than the 0.3% gain expected.

 

AT HOME

 

Bull rampage continued as benchmark indices climbed a percent and fourth, extending the winning streak to sixth straight day and hitting fresh record highs. Sesnex settled at 51348, up 617 points while Nifty added 203 points to finish at 15127. Nifty mid-cap and small-cap indices gained 1.5% each. Except 0.5% lower FMCG index, all the BSE sectoral indices ended in green, with Auto and Metal indices leading the tally, up 3.1% and 3% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1877 cr, 491 cr and 909 cr respectively. DIIs were net sellers to the tune of Rs 505 cr.

 

Rupee depreciated 4 paise to end at 72.96/$.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of 0.2%-0.5% and SGX Nifty is suggesting around 50 points higher start for our market.

 

In yesterday's report we had said that 15014, the top made last week, is the immediate hurdle, upon crossover of which 15500 would be the next upside levels to eye. Immediate support on the hourly chart is placed around 14700 with the stop-loss of which, long positions can be held on to.

 

Nifty crossed 15014 and surged all the way to touch a high of 15160 before closing at 15115 and is set to open above 15150 today.

 

15500 continues to be next upside target.

 

Immediate support on the hourly chart has moved up to 14830, with the stop-loss of which, trading longs can be held on to.

 

Tata Steel and Adani Ports will report their quarterly earnings today.

 

TRAIL STOP-LOSS TO 14700

 

TRAIL STOP-LOSS TO 14700

 

WORLD MARKETS

 

US indices gained 0.3%-0.6% to hit record highs on signs of progress towards more economic stimulus and after digesting January jobs report.

 

The Senate passed a budget resolution early Friday, as Democrats moved forward with the process to pass a $1.9 trillion coronavirus relief bill without Republican votes. President Biden warned that Republican efforts to pass a smaller bill would only prolong the economy’s path to recovery.

 

U.S. added 49,000 jobs in January, slightly below the 50,000 payrolls expected by economists. The unemployment rate fell to 6.3%, better than projections of 6.7%. December’s numbers were revised to show a loss of 227,000 jobs from the initial reading of 140,000 jobs lost.

 

Brent crude settled 0.85% higher at $59.34 per barrel while WTI crude settled 1.1% higher at $56.85 per barrel, both hitting their highest level in a year.

 

10-year and 30-year Treasury yield rose to 1.15% and 1.95% respectively. The dollar retreated 0.6% to 91.04. Spot Gold climbed 1% to $1,810.26 per ounce.

 

In Europe, FTSE fell 0.2%, DAX was little changed while CAC and FTSE MIB rose 0.9% and 0.8% respectively.

 

For the week, US indices rose 3.9%-6% for their best week since November. Bent rose more than 6% for tis best week since October. OPEC+, stuck to their supply tightening policy at a meeting on Wednesday a weekly supply report showed a drop in U.S. crude inventories to their lowest since March. gold is down 1.9%, its biggest decline since the week ended Jan. 8 in part due to higher U.S. Treasury yields

 

AT HOME

 

After rising around eight tenth of a percent in the initial trade, benchmark indices gave three fourth of the gains to end higher by a fifth of a percent, extending the winning streak to fifth straight day and hitting fresh record highs. Sensex settled at 50731, up 117 points while Nifty added 28 point to finish at 14924. Nifty small-cap index rose 0.3% while nifty mid-cap index ended lower by 1.1%. BSE Telecom and Teck indices slipped 2.4% and 1.3% respectively, becoming top losers among the sectoral indices while Realty index and Bankex were the top gainers, up 0.9% and 0.9% respectively.

 

FIIs net bought stocks worth Rs 1462 cr but net sold index futures and stock futures worth Rs 461 cr and 35 cr respectively. DIIs were net sellers to the tune of Rs 1419 cr.

 

Rupee appreciated 3 paise to end at 72.92/$.

 

Monetary Policy Committee voted unanimously to keep the repo rate unchanged at 4% and maintained an accommodative stance. RBI decided to reverse the CRR cut announced in March 2020 in two phases and said that normalisation of CRR will leave space for the central bank to put other liquidity management tools to work. It projected FY22 GDP growth at 10.5% and revised CPI inflation expectation to 5.2% in Q4 FY21, 5.2-5.0% in the first half of FY22 and 4.3% in Q3 Fy22.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are up 2% and 1% respectively while Shanghai is little changed. SGX Nifty is suggesting around 90 points higher start for our market.

 

We have been positive on Nifty after 14075 hurdle was taken out and have been advising holding on to long positions with a trailing stop-loss. On Friday, we had said that 15000-15050, around which a trendline adjoining tops made in 2010 and 2015 is placed, continues to be next major target/resistance to eye and had advised trailing the stop-loss in long positions to 14469.

 

Nifty surged to touch a high of 15014 before closing at 14924 and is set to open above 15000 today.

 

15014, the top made last week, is the immediate hurdle to eye, upon crossover of which 15500 would be the next upside levels to eye. Immediate support on the hourly chart is placed around 14700 with the stop-loss of which, long positions can be held on to.

 

15000 IN SIGHT; 14469 IS THE IMMEDIATE SUPPORT

 

15000 IN SIGHT; 14469 IS THE IMMEDIATE SUPPORT

 

WORLD MARKETS

 

Nasdaq climbed 1.2% while Dow and S & P 500 rose 1.1% each on the back of positive economic data and progress on new stimulus package. S & P 500 and Nasdaq hit a record high.

 

Weekly jobless claims stood at 779,000, the lowest since Nov. 28 and below the 830,000 expected by economists. Factory orders in December rose by 1.1%, beating estimate.

 

Meanwhile, January jobs report, to be released today, is expected to show an addition of 50,000 payrolls, after a decline of 140,000 in December. The unemployment rate is expected to stay at 6.7%

 

The yield on the benchmark 10-year Treasury note rose to 1.139%, while that on the 30-year Treasury bond advanced to 1.935%. The dollar index rose 0.5% to 91.509, hitting a more than two-month high. Spot gold fell 2.3% to $1,791.76 per ounce.

 

Brent crude gained 41 cents, or 0.7%, to $58.87 a barrel while WTI crude settled 0.6% higher at $56.02 a barrel. On Wednesday, OPEC and allies extended their oil supply pact at existing levels.

 

In Europe, except 0.1% lower FTSE, other markets gained 0.9%-1.6%, with Italy on the top. The Bank of England left monetary policy unchanged, with its main lending rate held at 0.1% and target stock of asset purchases kept at £895 billion ($1.2 trillion).

 

AT HOME

 

Benchmark indices rose seven tenth of a percent, extending the winning streak to fourth straight day and hitting yet another record high. Sensex added 358 points to settle at 50614 while Nifty finished at 14895, up 105 points. Nifty mid-cap and small-cap indices climbed 1.1% and 1.6% respectively. BSE Power and FMCG indices surged 2.6% and 2.3% respectively, becoming top gainers among the sectoral indices while Telecom and Teck indices were the top losers, down 0.6% and 0.4% respectively.

 

FIIs net bought stocks and stock futures worth Rs 1937 cr and 518 cr respectively but net sold index futures worth Rs 1555 cr. DIIs were net sellers to the tune of Rs 769 cr.

 

Rupee was little changed at 72.9525/$.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of upto 1% and SGX Nifty is suggesting around 50 points higher start for our market.

 

At the risk of repeating, we had turned our view on Nifty bullish after 14075 hurdle was taken out and have been advising holding on to long positions with a trailing stop-loss.

 

In yesterday's report we had said reiterated upside target of 15000 and had advised holding on to long positions with the stop-loss of 14336.

 

Nifty surged to touch a high of 14913 before closing at 14895 and is set to open near 14950 today.

 

15000-15050, around which a trendline adjoining tops made in 2010 and 2015 is placed, continues to be next major target/resistance to eye.

 

14469, the upper end of the gap created by Tuesday's gap-up opening, would now act as immediate support, with the stop-loss of which, trading longs can be held on to.

While Monetary Policy Committee is expected to leave interest rate unchanged when it ends its meeting today, RBI's commentary on liquidly management would be keenly watched out in light of enhanced government borrowing.

M & M and Britannia will report their quarterly earnings today.

 

15000 CONTINUES TO BE UPSIDE HURDLE; 14470-14336 IS THE SPPORT ZONE

 

15000 CONTINUES TO BE UPSIDE HURDLE; 14470-14336 IS THE SPPORT ZONE

 

WORLD MARKETS

 

Dow and S & P 500 inched up 0.1% while Nasdaq fell marginally by 2 points.

 

Democrats took their first votes in Congress on Tuesday night, to pass the proposed stimulus package without Republican support. The Senate voted in a 50-49 party line vote to advance a budget resolution. The House also voted in favor of going forward with the budget measure in a 216-210 vote.

 

Data from ADP showed a 174,000 increase in private jobs in January, beating expectations.

 

The yield on the benchmark U.S. 10-year Treasury note rose about 3 bps to 1.14%.

 

Brent crude rose 1.74% to $58.46 and US crude settled 1.7% higher at $55.69 per barrel, after EIA data showed U.S. crude oil stockpiles fell last week to 475.7 million barrels, their lowest since March.

 

eBay climbed more than 9% in the after-hours market after beating on both the top and bottom lines and issuing a better-than-expected forecast for the first quarter. PayPal gained nearly 3% while Qualcomm slipped more than 7% after reporting revenues below estimate.

 

In Europe, DAX rose 0.7%, France was flat while FTSE fell 0.1%. Italian market surged 2.1% on news that former ECB President Mario Draghi is set to form a new unity government in Italy. Eurozone IHS Markit’s final composite PMI for January came in at 47.8 last month compared to 49.1 in December.

 

AT HOME

 

Benchmark indices surged nearly a percent, extending the winning streak to third straight day and hitting fresh intraday as well as closing highs. Sensex added 458 points to settle at 50255 while Nifty finished at 14790, up 142 points. Nifty mid-cap and small-cap indices climbed 1.4% and 1.2% respectively with the former hitting fresh record high. Except 0.5% and 0.03% lower Realty and FMCG indices, all the BSE sectoral indices ended in green, with Utilities and Healthcare indices leading the tally, up 2.5% and 2.4% respectively.

 

FIIs net bought stocks worth Rs 2521 cr but net sold index futures and stock futures worth Rs 69 cr and 858 cr respectively. DIIs were net sellers to the tune of Rs 400 cr.

 

Rupee ended unchanged at 72.96/$.

 

India's IHS Markit Services PMI for January came in at 52.8, up from 52.3 in December. The composite PMI rose to 55.8 from 54.9.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.1%-0.4% and SGX Nifty is suggesting a marginally higher start for our market.

 

Readers would recall that we had turned our view on Nifty bullish after 14075 hurdle was taken out and have been advising holding on to long positions with a trailing stop-loss.

 

In yesterday's report we had said that upon crossover of 14753, 

15000 would be the next upside target.

 

Nifty crossed 14753 level and surged all the way to 14868 before closing at 14790.

 

15000, around which a trendline adjoining tops made in 2010 and 2015 is placed, continues to be next major target/resistance to eye.

 

14470-14336, the gap created by Monday's gap-up opening, would now act as the immediate resistance zone.

 

Meanwhile, trading longs can be held on to with the stop-loss of 14336.

 

SBI and Hero MotoCorp will report their quarterly earnings today.

 

15000 ABOVE 14753; TRAIL STOP-LOSS TO 14336

 

15000 ABOVE 14753; TRAIL STOP-LOSS TO 14336

 

WORLD MARKETS

 

US indices rose nearly a percent and half each, extending Monday's rebound, helped by gains in Amazon.com and Google-parent Alphabet ahead of their results and by optimism over progress on a U.S. pandemic relief package.

 

Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi introduced a budget resolution on Monday, the first step to getting a coronavirus relief package passed without Republican support. Meanwhile, President Joe Biden met with the 10 Republican senators on Monday that wrote to him over the weekend to put forward their alternative, smaller aid proposal to his $1.9 trillion package.

 

Amazon reported earnings nearly double the estimates; however, the stock move was tempered by news that Jeff Bezos would step down as CEO. Shares of Alphabet gained 6% in after hours trading after the reporting 23% revenue growth and topping estimates for earning.

 

Social media-driven trading frenzy or the short squeeze trade by the samller retail traders continued to unwind. GameStop, fresh off a 400% rise last week, slid 30% on Monday and fell another 50% Tuesday.  Silver, which had surged 7.3% on Monday, fell 8.2% yesterday to $26.59 an ounce. Spot gold, meanwhile, fell 1.4% to $1,835.11 per ounce.

 

Amazon reported earnings nearly double the estimates; however, the stock move was tempered by news that Jeff Bezos would step down as CEO. Shares of Alphabet gained 6% in after hours trading after the reporting 23% revenue growth and topping estimates for earning.

 

Brent crude rose $1.22, or 2.2%, to $57.57 a barrel for its third straight day of gains and U.S. oil gained 2.3%, or $1.21, to settle at $54.76 per barrel. Both hit their highest level in a year.

 

The yield on the benchmark 10-year Treasury note climbed to 1.11% while the yield on the 30-year Treasury bond advanced to 1.88%.

 

European markets gained 0.8%-1.9%. Euro zone economy dropped by 0.7% in the final quarter of 2020 as governments stepped up social restrictions, while a preliminary reading points to an annual GDP contraction of 6.8%.

 

AT HOME

 

Budget celebration continued as benchmark indices surged another two and a half percent to hit record highs on closing basis. Sensex settled at 49797, up 1197 points while Nifty added 366 points to finish at 14647. Nifty mid-cap and small-cap indices rose 2.4% and 1.2% respectively. All the BSE sectoral indices ended in green, with Industrials and Auto indices leading the tally, up 4.2% and 4% respectively.

 

FIIs net bought stocks worth Rs 6182 cr but net sold index futures and stock futures worth Rs 975 cr and 921 cr respectively. DIIs were net sellers to the tune of Rs 2035 cr.

 

Rupee appreciated 6 paise to end at 72.96/$.

 

OUTLOOK

 

Today morning, Nikkei is up 0.7% while Hang Seng and Shanghai are down half a percent each. SGX Nifty is suggesting around 80 points higher start for our market.

 

In yesterday's report we had said that 14753, the top made last week, was the next target/resistance to eye and had advised holding on to long positions with the stop-loss of 14000.

 

Nifty surged to touch a high of 14731 before closing at 14647, nearly achieving 14753 target and vindicating our view. The benchmark is set to open near 14700 today.

 

14753 continues to be upside resistance to eye, upon crossover of which 15000 would be the next target.

 

14336, the lower end of the gap created by yesterday's gap-up opening, will now act as immediate support, upon breach of which 14000 would be the next support.

 Meanwhile, trading longs can be held on to with the stop-loss of 14336.

Bharti Airtel will report their quarterly earnings today.

 

14753 IS THE UPSIDE LEVEL TO EYE; 14000 IMMEDIATE SUPPORT

 

14753 IS THE UPSIDE LEVEL TO EYE; 14000 IMMEDIATE SUPPORT

 

WORLD MARKETS

 

Nasdaq surged 2.6% while S & P 500 and Dow rose 1.6% and 0.8% respectively, bouncing back from last week's steep losses. Technology related stocks led the advance, while a move by retail traders into silver drove up mining shares.

 

On the data front, ISM survey showed US manufacturing activity slowed slightly in January

 

On the stimulus negotiations front, 10 Republican senators sent a letter to Biden on Sunday asking him to consider a smaller, alternative Covid-19 relief spending plan.

 

Silver futures rose 8% to $29.06 an ounce, it's largest one-day pop since 2013, as the Reddit-fueled boom in highly shorted stocks appears to be spilling over into the metals market.

 

Shares of GameStop meanwhile, slid 30% on Monday, after a meteoric 400% rise last week.

 

Brent crude rose $1.22 cents, or 2.2%, to $56.26 a barrel. U.S. crude settled 2.6% higher at $53.55 per barrel.

 

European markets gained 0.9%-1.4%. Euro zone unemployment held steady at 8.3% in December. UK's final IHS Markit/CIPS manufacturing PMI reading came in at 54.1, down from a spike of 57.5 in December as businesses raced to beat the Jan. 1 Brexit deadline.

 

AT HOME

 

In a big Thumbs-up to Union Budget, Sensex and Nifty surged 5% and 4.7% respectively, registering their biggest gain since 7th April 2020 and recouping nearly 90% of the losses made last week. Sensex settled at 48600, up 2314 points while Nifty added 646 points to finish at 14281. Nifty mid-cap and small-cap indices rose 3.3% and 2% respectively. All the BSE sectoral indices ended higher with Bankex and Finance indices leading the tally, up 8.3% and 7.5% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1494 cr, 2135 cr and 1350 cr respectively. DIIs were net sellers to the tune of Rs 90 cr.

 

Rupee depreciated 7 paise to end at 73.02/$.

 

What market liked about the budget was a big emphasis on growth without tinkering with existing tax structure/imposing fresh taxes. The budget pegged FY21 and FY22 fiscal deficit target at 9.5% and 6.8% of GDP respectively. Gross borrowing in FY22 is projected at Rs 12 lakh cr. There was a big Capex thrust as the Capex for FY22 was pegged at Rs 5.54 lac cr, a rise of 34.5%. There was no super-rich tax, hike in STT, Corporate TAx or Covid surcharge as feared by the market. Banks surged on the announcement that two more public sector banks, other than IDBI and two insurance companies including LIC, will be privatised in FY22. The budget pegged FY22 divestment target at Rs 1.75 lk cr. Also, an Asset Reconstruction Company will be established which will take over all stressed assets from bank books. In a big thrust to infrastructure, government announced setting up of a Development Finance Institution, which is expected to build a lending portfolio of at least Rs 5 lakh crore in three year. The budget proposed allocation of Rs 2.23 trillion on healthcare, a jump of 137%. FDI limit in insurance was hiked from 49% to 74%. Budget also announced voluntary vehicle scrappage policy to phase out old and unfit vehicles.

 

Eicher reported 8% y-o-y rise in January sales at 68887 units while Hero MotoCorp sales were down 3% at 4.85 lc units.

 

OUTLOOK

 

Today morning, Hang Seng and Nikkei are up 1.5% and 0.8% respectively while Shanghai is little changed. SGX Nifty is suggesting around 100 points higher start for our market.

 

In yesterday's report we had said that 13596, the bottom made Friday, was the immediate support while 14075, was the next hurdle, above which, 14300 would be the next level to eye.

 

Nifty crossed 14075 hurdle and surged all the way to 14336 before closing at 14281. The benchmark is set to open above 14350 today.

 

14753, the top made last week, is the next target/resistance to eye.

 

14000 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

HDFC will report its quarterly earnings today.

ALL EYES ON UNION BUDGET

 

ALL EYES ON UNION BUDGET

 

WORLD MARKETS

 

US indices plunged 2% each on Friday after trial results from Johnson & Johnson’s coronavirus vaccine disappointed some investors and amid worries about the retail trading.

 

J&J said its one-dose vaccine demonstrated 66% effectiveness overall in protecting against Covid-19. The vaccine was 72% effective in the United States, 66% in Latin America and 57% in South Africa after four weeks.

 

Shares of GameStop jumped 67.9% after Robinhood said it would allow limited buying of the stock and other heavily shorted names after restricting access the day before. There are concerns that if GameStop continues to rise in such a volatile fashion, it may ripple through the financial markets, causing losses at brokers like Robinhood and forcing hedge funds who bet against the stock to sell other securities to raise cash. There are also fears that the GameStop mania is a sign of a larger bubble in the market and that its unraveling could also cause turbulence and hit retail investors hard.

 

Spot gold rose 0.6% to $1,851.01 an ounce.

 

European markets fell 1.7%-2.2%. European Medicines Agency approved the vaccine developed by British pharma giant AstraZeneca for emergency use in the EU. But the European Commission also on placed temporary controls on the export of coronavirus vaccines made inside the bloc, following a spat with AstraZeneca and wider supply issues. France's fourth-quarter GDP growth came in at -1.4% versus the -4% average consensus.

 

For the week, US indices dropped more than 3%, posting their worst week since October. European markets fell between 2.9%-4.3%. Asian markets saw cuts between 3.4%-5.3%

 

AT HOME

 

After rising a percent in the initial trade, benchmark indices nosedived more than 2% from the top of the day to end lower by 1.3% each, extending the losing streak to sixth consecutive day and closing at the lowest level in 5 weeks. Sensex settled at 46285, down 588 points while Nifty lost 183 points to finish at 13634. Nifty mid-cap and small-cap indices fell 0.4% and 0.6% respectively. BSE Auto and Telecom indices tumbled 3% each, becoming top losers among the sectoral indices while Bankex and Realty indices were the top gainers, up 0.7% and 0.4% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 5391 cr, 5 cr and 183 cr respectively. DIIs were net buyers to the tune of Rs 2443 cr.

 

Rupee appreciated 9 paise to end at 72.95/$.

 

For the week, Sensex and Nifty fell 5.3% and 5.1% respectively, registering their biggest weekly cut after the week ended 8th May, 2020. For the month, Nifty fell 2.5%, snapping 3-month winning streak.

 

GST collections for January rose to 1.2 lac cr, the highest monthly figure since the inception.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are up 1% and 0.4% respectively while Shanghai is off 0.2%. SGX Nifty is suggesting a flattish start for our market.

 

Union Budget, to be presented today, is expected to give priority to supporting the economic recovery. Fiscal deficit for next fiscal can be pegged between around 4.8-5.5% and net borrowing number can be between 7.5-8.3 lac cr cr. Many of the key themes in the Budget will revolve around COVID-19, either directly on health issues (vaccines) or regulatory support to most affected sectors (such as hospitality, retail, aviation etc.). In addition, infrastructure, agriculture, the social sector and promotion of domestic manufacturing, alongside incentives to boost construction and housing, are likely to be in focus. There may be hike on import duties, which aside from raising more revenue also serves the government’s ‘Make in India’ drive.

 

Also, there are fears that to fund the above, there might be a hike in health & education cess, Change in STT and One-time billionaire tax.

 

Talking about levels, 13596, the bottom made Friday, also coincides with a trendline adjoining bottoms made in September and October 2020 and hence is the immediate support to eye. Below 13596, 13131, the bottom made on 21st December, would be the next support. If 13131 also gives way, 12962, the bottom made in December, which also coincides with 20-week moving average, would be the next level to eye.

 

On the way up, immediate hurdle on the hourly chart is placed around 14075, which also coincides with the 34-DMA. Above 14075, 20-DMA, placed around 14300, would be the next hurdle. Trading shorts can be held on to with the stop-loss of 14075.

 

Auto companies will report their January sales figures today.