8 January 2016


“BUY NIFTY ABOVE 7620 TG 7645, 7670 SL 7590”
Indian markets started on a weak note on news that the trading in the Chinese markets was suspended, after the indices fell by 7 per cent in early trade. This was the second time that market’s circuit breaker was triggered. The sharp sell-off in Chinese markets was prompted by the People’s Bank of China (PBOC) who set the yuan midpoint at 6.5646 per dollar, 0.5 per cent weaker than Wednesday’s rate, the biggest fall between daily fixings since the devaluation began in mid-August. The market witnessed a correction amid Yuan’s continuous depreciation which has negatively influenced the investors’ preference to the emerging markets. We feel that going forward the retail investors are likely to stay away from the market as further depreciation in Yuan cannot be ruled out. Indeed, we are nearing the third quarter results season. so the near term fluctuations will also depend upon the earning guidance and outlook from the companies.
The four-day fall in the Nifty futures has come to a halt in today's session, after testing the key support at 7,600.The contract started the session with a gap-up open at 7615. After experiencing initial selling pressure, the contract marked an intra-day low at 7593 levels and began to trend northwards. It has gained 40 points.  The Sensex ended higher by 82 points at 24934 and the Nifty ended up by 33 points to 7601.
Next week we have numbers (corporate earnings) coming in thick and thin, so markets will look for cues from there. Traders with a short-term perspective can buy the contract in dips as it witnessed buying interest around 7610, with a stop-loss at 7,600 levels. Continuation of the up move can take the contract higher to 7635 and then to 7650 levels.
Next key resistances above 7650 are at 7675 and 7700 levels. However, a strong fall below 7600 can alter the positive outlook and drag the contract down to 7580 and 7550 levels.
Strategy: Buy in dips with a stop-loss at 7,600
More about intraday tips on Google +
Supports: 7600 and 7550
Resistances: 7650 and 7700

No comments:

Post a Comment