Wall Street starts year on strong note; Nasdaq ends above 7,000

The Dow Jones Industrial Average rose 104.79 points, or 0.42 percent, to 24,824.01, the S&P 500 gained 22.18 points, or 0.83 percent, to 2,695.79 and the Nasdaq Composite added 103.51 points, or 1.5 percent, to 7,006.90.

   

US stocks rose in the first session of the new year and the Nasdaq closed above 7,000 for the first time on Tuesday as investors were optimistic that 2018 will bring more gains for the market.

The Nasdaq, driven by gains in Apple , Facebook , Amazon and Alphabet , breached 6,000 in April of last year and closed above 5,000 in 2015 for the first time in 15 years. The technology index added 1.4 percent on Tuesday, following a 37-percent surge in 2017 that made it the best-performing S&P 500 sector.

The S&P 500 also hit a record high close. Besides technology, S&P consumer discretionary, healthcare, energy and materials indexes all were up more than 1 percent on the day.

Major stock indexes closed out 2017 with their best performances since 2013. Many investors say the rally could continue this year with help from the recently approved US tax overhaul that is anticipated to boost profits as well as the economy.

We're off to the races once again," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

"I don't expect the kind of moves we saw last year. But as long as monetary policy stays the way it is ... my view is stocks are going to have a decent year. And fiscal policy has become stimulative, as well, given the tax bill."

The Dow Jones Industrial Average rose 104.79 points, or 0.42 percent, to 24,824.01, the S&P 500 gained 22.18 points, or 0.83 percent, to 2,695.79 and the Nasdaq Composite added 103.51 points, or 1.5 percent, to 7,006.90.

"Our best guess is the first quarter or half of the year can be OK as a continuation of last year," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

But, he said, "valuations are still stretched, interest rates are still rising, and those will provide headwinds to the market at some point."

The S&P consumer discretionary index was up 1.5 percent, helped by a gain in Amazon of 1.7 percent.

J.C. Penney , Nordstrom and Kohl's climbed after a bullish Citigroup note on the retail sector detailed benefits from the corporate tax cuts.

Energy shares were up even though oil prices dipped. Oil hovered near mid-2015 highs amid large anti-government rallies in major exporter Iran and ongoing supply cuts led by OPEC and Russia. The S&P energy index rose 1.8 percent.

Shares of casino operators Wynn Resorts and Melco Resorts & Entertainment were down after a report showed a lower-than-expected rise in Macau gambling revenue in December.

Abbott Labs jumped 3 percent and hit an intraday record of USD 59.20 after two brokerages upgraded the company's stock to "overweight."

Shares of insurer Allstate were down 2.7 percent following a brokerage downgrade.

Advancing issues outnumbered declining ones on the NYSE by a 1.64-to-1 ratio; on Nasdaq, a 2.01-to-1 ratio favored advancers.

About 6.7 billion shares changed hands on US exchanges. That compares with the 6.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

MORE WILL UPDATE SOON!!

Asia shares eye all-time top on global growth cheer

Investors also piled into emerging market trades. MSCI's index of Asia-Pacific shares outside Japan edged up another 0.1 percent, having jumped 1.4 percent on Tuesday in its best performance since last March.

  

Asian stocks struck a fresh decade high on Wednesday as risk appetites were whetted by a bevy of upbeat manufacturing surveys that confirmed a synchronised upturn in world growth was well under way.

Activity was especially strong in Europe, lifting bond yields there and driving the euro to within a whisker of its highest in three years against a beleaguered US dollar.

Investors also piled into emerging market trades. MSCI's index of Asia-Pacific shares outside Japan edged up another 0.1 percent, having jumped 1.4 percent on Tuesday in its best performance since last March.

The index is creeping ever closer to the all-time peak of 591.50 reached in late 2007. South Korean stocks were up for the fourth session running, while Japan's Nikkei remained closed for holidays.

Wall Street started the new year as it ended the old, scoring another set of record closing peaks. The Dow rose 0.42 percent, while the S&P 500 gained 0.83 percent and the Nasdaq 1.5 percent.

Apple , Facebook , Alphabet and Microsoft pulled the technology index up 1.4 percent, following a 37-percent surge in 2017 that made it the best-performing S&P sector.

The gains in riskier assets came as industry surveys from India to Germany to Canada showed quickening activity.

"The breadth of the recovery is extraordinary," said Deutsche Bank macro strategist Alan Ruskin, noting that of 31 countries covered, only three failed to show growth while all the largest manufacturing sectors improved.

"The global economy and risky assets are now solidly into a virtuous cycle, whereby growth is propelling risky assets like equities higher, that are then supporting growth," he added.

"This is not a global economy in need of the extraordinary emergency style policies pursued by the likes of the ECB and Band of Japan."

EURO ZONE OUTPERFORMS

Indeed, with euro zone factories expanding at their fastest pace in more than two decades, speculation is rampant that the European Central Bank will start to wind down its asset buying programme later this year.

As a result, yields on 10-year German paper climbed 4 basis points to a two-month top at 0.467 percent, which in turn pushed up rates across the European periphery.

Spanish yields, for instance, have risen 16 basis points in just three sessions to reach 1.616 percent.

The prospect that other major central banks could play catch up with the Federal Reserve on tightening undermined the dollar, which sank to three-month trough against its peers .

The euro stretched to a four-month top of USD 1.2082, adding to its 2017 gains of 14 percent. It was last at USD 1.2061 and bulls were eyeing its September peak of USD 1.2092, a break of which would return to ground last trod in early 2015.

The single currency has already reached a two-year high on the yen at 135.40, while the dollar was lagging far behind at 112.26 yen.

The weakness of the dollar was a positive for commodities priced in the currency.

Spot gold added 0.2 percent to USD 1,320.74 per ounce, having reached its highest since mid-September.

Oil prices hit their highest since mid-2015, only to stall when major pipelines in Libya and the UK restarted and US production soared to the strongest in more than four decades.

Brent crude futures were yet to trade at USD 66.57 a barrel, while US crude futures nudged up 5 cents to USD 60.42 a barrel.

MORE WILL UPDATE SOON!!

Nifty to face resistance around 10550; 4 stocks which can give up to 14% return

For the last couple of weeks, the index had been trading in a narrow range but closer to its all-time high levels and on Tuesday, Nifty formed a bearish candlestick covering this range.

It was a volatile start to the New Year 2018, with the sudden sell-off in the last hour of the trade, after bulls had been in control for most of the trading session on Tuesday.

Still, market breadth was positive with an advance-decline ratio of 5:4 and broader indices closed flat-to-positive outperforming benchmarks.

After a strong 2017, Nifty has got off on a negative note with the index losing 0.9 percent to close at 10436 levels on an opening day.

For the last couple of weeks, the index had been trading in a narrow range but closer to its all-time high levels and on Tuesday, Nifty formed a bearish candlestick covering this range.

Now, it needs to be seen if there is any follow-through action on the downside that could lead to short-term pressure in the market.

Hence, breaking below 10400 levels, the index may decline initially towards 10320 and then 10230 levels. Also, INDIA VIX moved up by 5.39 to 13.35 and has been inching up in last one week from low of 11.6 level.

Further, the rise in volatility could be the cause of concern for bulls. On the upside, Nifty has overhead resistance at 10550 levels. It needs to cross above 10550 levels for it to rally towards 10700 and then 10840 odd levels on the upside.

Here is a list of top four stocks which can give up to 14% return in the short term:

Petronet LNG: BUY| CMP Rs256| Stop Loss Rs244| Target Rs290| Return 13%

The stock touched a high of Rs276 in the month of November 2017 and since then the price has corrected down to Rs239 levels. It has now retraced 50% of the swing from last August low 198 to high of 276 which comes around 237 levels.

The stock has been consolidating between 260 and 239 levels to form descending triangle pattern on daily chart. Price has given positive crossover with a 50-day moving average which has been acting as support and resistance for the stock.

MACD has moved above the neutral level of zero on daily chart suggesting the correction is over in the stock. Thus, the stock is bought at current levels and on dips to Rs252 with a stop loss below Rs244 for a target of Rs290 levels.

BHEL: BUY| CMP Rs95| Stop Loss Rs91| Target Rs106| Return 11%

The stock has been trading in a sideways range of Rs95 to Rs86 levels for the last seven weeks. In the last trading session, the stock witnessed a breakout with strong price momentum and good volumes indicating buying participation in the stock.

The stock has also seen a Bollinger band breakout with the expansion of bands after a consolidation suggesting the start of a fresh uptrend. On the weekly chart, the stock seems to be forming bullish inverted head and shoulders pattern with the right shoulder in the process of formation, suggesting the stock is in broad bottoming out formation process.

Traders can buy the stock at current levels and on dips to 94 with a stop loss below 91 for target 106 levels.

Kajaria Ceramic: BUY| CMP Rs725| Stop loss Rs695| Target Rs810| 11%

The stock has been in a sideways consolidation for the last three months, largely between Rs750 and Rs660 levels. But, looking at the broader structure of the stock on the weekly chart, it has formed descending triangle pattern over last six months period.

It has been forming higher lows and volumes over last one year have been above average indicating buying coming at higher levels in the stock.

The lows have seen a bounce back from long-term 200-day moving average. The stock is now trading at breakout levels and is likely to move higher from current levels. The stock is bought at current levels and on dips to Rs710 with a stop loss of Rs695 for a target of Rs810 levels.

Crompton Greaves Consumer: BUY| CMP Rs270| Stop loss Rs254| Target Rs310| Return 14%

The stock formed a strong base between Rs245 and Rs200 levels over the period of last six months. In November, it witnessed a breakout and hit a lifetime high of Rs292 on high volumes indicating a good buying participation in the stock.

Since then, the stock has been trading sideways between Rs280-250 odd levels consolidating its gains above its breakout level. In this period volumes have been below average and seen steady decline suggesting investors holding on too long positions in the stock.

MACD has given positive crossover on the daily chart. Thus, the stock is bought at current levels and on dips to 265 with a stop loss below 254 for target 310 levels.

MORE WILL UPDATE SOON!!

Nifty likely to head towards 10650-10700; 5 stocks which can give up to 19% return

On the technical grounds as far we are maintaining above 10200 spot levels current trend is likely to continue towards 10650-10700 moving forward.

Overall derivative data indicates long rollover to January series. Derivative data indicates bullish scenario to continue with Nifty having multiple strong supports at 10,400 and 10,300 spot levels.

We might witness short covering on every dip. In the January option contracts, we are seeing options open interest (OI) building up in 10300 and 10400 puts.

On the higher band, 11000 calls strike to hold the maximum open interest with more than 44 lakh shares. From the option data, we have been seeing a shifting of the range towards upper band which reflects that market undertone is likely to remain bullish with the support of consistent FII buying and short covering.

Overall market’s cost-of-carry is up on the back of fresh long additions. Among put options, 10300-strike put has the highest open interest of over 50 lakh shares.

On the technical grounds as far we are maintaining above 10200 spot levels current trend is likely to continue towards 10650-10700 moving forward.

Here is a list of top 5 stocks which can give up to 19% return in the short term:

Tata Power Company Limited: BUY| Target Rs111| Stop Loss Rs91| Return 13%

The stock has been trading in a rising channel on the daily and the weekly charts. However, from the last six weeks, the stock has been consolidating in the range of Rs88-96 amid which it has formed rectangle formation.

In Tuesday’s session, it witnessed fresh breakout in prices above the pattern formation along with heavy volumes which is a bullish sign.

The formation is generally traded as continuation pattern of the previous trend. Traders can accumulate the stock in a range of Rs98-99 for the target of Rs111 with a stop loss below Rs91.

Shivam Autotech Limited: BUY| Target Rs112| Stop Loss Rs91| Return 13%

The stock has given a breakout above Rs75 levels in the recent past and has also tested Rs105 levels in a short span of time.

However, since then due to profit booking, the stock has retraced back towards its 50-days exponential moving average (DEMA) and took support around Rs85 levels.

On the weekly interval, the stock has formed a bullish flag formation and has also given a break above the pattern formation this week.

Traders can accumulate the stock in a range of Rs99-101 for the upside target of Rs112 with a stop loss below Rs91.

Shree Pushkar Chemicals & Fertilisers Limited: BUY| Target Rs350| Stop Loss Rs265| Return 19%

The stock has been consolidating in the range of Rs250-280 from almost last two months and formed an ascending triangle formation on the weekly charts.

Additionally, it has formed an inverted head and shoulder formation on the daily charts. This week, prices have given a breakout above both the formation with marginally higher volumes.

Traders can accumulate the stock in a range of Rs294-298 for the target of Rs350 with a stop loss below Rs265.

Dish TV India Limited: BUY| Target Rs95| Stop Loss Rs78| Return 13%

On the daily charts, the stock has been consolidating in the range of Rs78-84 and holding well above its 50 and 100-days exponential moving average.

In Tuesday’s session, the stock witnessed a fresh breakout above the 200-days exponential moving average (DEMA) along with hefty volumes.

Moreover, on the weekly charts, the stock has formed the inverted head and shoulder formation and also given breakout above the neckline of the pattern formation.

Traders can accumulate the stock in a range of 84-86 for the target of 95 with a stop loss below 78.

Chambal Fertilizers & Chemicals Limited: BUY| Target Rs176| Stop Loss Rs143| Return 13%

The stock has been consolidating in a narrow range of Rs135-150 from the last three months and this week, the stock gave a breakout above the key resistance level of Rs150 with relatively larger volumes.

Additionally, the positive divergence on RSI and stochastic indicators on the daily charts also support the next up move in prices in the coming sessions.

Traders can accumulate the stock in a range of Rs155-157 for the target of Rs176 with a stop loss below Rs143.

MORE WILL UPDATE SOON!!