Oil Prices Rebound supporting Global Equities – Your Trading Strategy

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Key Points Supporting Global Equities:

  • June WTI oil contract rebounded by 40% to $ 16.18 per barrel.
  • U.S. Stimulus package of $ 484 billion bill goes to the House of Representatives for a vote.
  • U. S stocks rebounded on the back of rising oil prices and stimulus package hope.
  • This morning Asian Markets are trading in Mix territory .
  • SGX Nifty suggesting a flat start for the Indian markets at around 9200 level.
  • ECB takes measures to mitigate the impact of possible ratings downgrades.
  • SEBI proposes easier fund raising norms for stressed companies through preferential route.

West Texas Intermediate (WTI) June future contract rebounded by 40% to $16.18 per barrel. This comes after two days of historical slide in oil prices. Monday the WTI May future contract hit a low of -$37.63/barrel. This is for the first time oil prices was in negative territory and Tuesday too saw a deep cut in oil prices.

Yesterday strong closing of oil prices and the U.S. Stimulus package bill of $484 billion goes for clearance by House of Representatives, lifted stocks in U.S. markets.

  • Dow Jones Industrial Average advanced by 456.94 points, or 2%, close at 23,475.82.
  • The S&P 500 seen upside of 62.75 points, or 2.3%, ends at 2,799.31.
  • Nasdaq Composite Index gained by 232.15 points, or 2.7%, close at 8,495.38.

Yesterday European markets have a strong closing on the back of news “European Central Banks takes measures to mitigate the impact of possible ratings downgrades“. These steps are important to continue the smooth pumping of liquidity into the markets/banks.

  • CAC 40 seen upside of 54.34 points, or 1.25%, ends at 4411.80.
  • DAX Index gained by 165.18 points, or 1.61%, close at 10415.03.

This morning Asian screen is mix even after these positive developments. Have a look on Asian screen this morning.

Asian Markets are Mix on the back of Oil Prices Rebound

IndicesCurrent ValuePrev. Close% Change
Nikkei (Apr 23)19265.9519137.950.67%
Straits Times (Apr 23)2543.772550.04-0.25%
Hang Seng  (Apr 23)23890.9123893.36-0.01%
Kospi (Apr 23)1903.421896.150.38%
Jakarta Composite (Apr 23)1261.811252.920.71%
Shanghai Composite (Apr 23)2847.832843.980.14%
SGX Nifty (Apr 23)91419167.5-0.29%
Data: Money control, Time: 8.34 A.M.

How to trade in Indian Markets today?

This morning SGX Nifty is in flat territory. Best strategy is to go long on “Nifty Future” with all these positive news flow. Yesterday SEBI has come out with a proposal to ease fund raising plan through Preferential route of distressed companies. This proposal will have a positive effect on sustainability of these companies in tough environment.

Today you can initiate a long on Nifty future with a target of 9250 level and with a stop loss of 9080. The best strategy is to open trade near this stop loss.

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