Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 18th Jan 2018
Nifty 10700 /Sensex 35081/ Bank Nifty 26289
38 Advances / 12 Declines/ 0 Unchanged
Markets hit fresh all-time highs; Sensex conquers 35K mark
Wednesday turned out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges ending the session at their all-time closing high levels, surpassing 35,000 (Sensex) and 10,750 (Nifty) levels for the first time ever. After a cautious start, markets gained traction and there appeared not even an iota of profit booking in the session afterwards with benchmarks fervently gaining from strength to strength to end near intraday highs, as investors continued hunt for fundamentally strong stocks. Sentiments remained up-beat after the government said it will reduce its additional borrowing to Rs 200 billion from the bond markets in the financial year 2017-18, from Rs 500 billion announced last month. This is primarily because the Reserve Bank of India will pay a higher-than-anticipated surplus to the Centre, and the dividend target from state-owned companies will also be met. Also, traders took some encouragement with a private report stating that business optimism index for the January-March quarter 2018 touched three and half year high on improving demand conditions and expectation that government sops in the budget will revive consumption.
It further said that the upcoming Union Budget and assembly elections during 2018 might have generated optimism about government sops that could push revival in consumption. Markets accelerated northward journey after rating agency CRISIL enlightened that India will benefit from stronger global growth in the fiscal 2019 provided there are no more after effects from the implementation of the new Goods and Services Tax (GST) and the economy manages to tide over the asymmetry in monetary policy of advance economies together with higher crude oil prices. Some support also came with report that agricultural exports from India grew 18 per cent to $21 billion in the April-October 2017-18 period compared to just 5 per cent in 2016-17. Meanwhile, Commerce and Industries Minister Suresh Prabhu has said that India is expected to become a $5 trillion economy in the next 8-9 years with the manufacturing sector contributing 20 per cent to that. Prabhu said as commerce and industries minister, he is working on a strategy for international trade which will contribute $2 trillion to the economy where contribution can come from both manufacturing and services. On the global front, European markets made sluggish start with CAC, DAX and FTSE trading red terrain in early deals, as investors were eyeing fresh batch of corporate earnings reports. Euro zone inflation eased in line with expectations in December.
The European Union’s statistics office said the consumer price index rose at an annual rate of 1.4% in December, from 1.5% in November. Asian markets exhibited mixed trend on Wednesday. Back home, shares of banking sectors remained on buyers’ radar on report that India has cut its additional market borrowing requirement by more than half for the fiscal year ending in March to Rs 20,000 crore. Realty sector stocks too remained in focus, as the GST Council is expected to consider a reduction in tax rates for some items. The Council is likely to discuss inclusion of real estate under GST and announce the rollout date for the same.
FII’s Activity 17th -Jan-18
The FIIs as per Wednesday’s data were net buyers in equity segment, while they were net sellers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 8266.56 crore against gross selling of Rs 7520.86 crore. Thus, FIIs stood as net buyers of Rs 745.70 crore in equities.
In the debt segment, the gross purchase was of Rs 391.18 crore with gross sales of Rs 822.00 crore. Thus, FIIs stood as net sellers of Rs 430.82 crore in debt.
In the hybrid segment, the gross buying was of Rs 2.20 crore against gross selling of Rs 5.68 crore. Thus, FIIs stood as net sellers of Rs 3.48 crore in hybrid segment.
Now what to expect ??
Nifty Levels
Support at 10690 and Resistance at 10816
Above 10816 will see rally till 10880---10950 mark else could touch its support level of 10660 again.
Trade with levels only
Bank Nifty
Support at 25900 and Resistance at 26315
Above 26315 will see rally till 26450---26600 mark else could touch its support level of 25900.
Daily Derivative Outlook 18th January 2018
•Nifty (January) futures closed at a premium of 3.25 points versus a premium of 9.10 points.
• HDIL (28%), GMRINFRA (19%), MCDOWELL-N (13%), REL CAPITAL (11%) and MUTHOOTFIN (9%) were the top gainers in terms of open interest.
• VGUARD (-15%), ORIENTBANK (-9), HCC (-8%), TORNTPOWER (-8%) and CGPOWER (-8%) were the top losers in terms of open interest.
• Maximum call buying was seen at Nifty 10700 strike and maximum put buying was seen at Nifty 10700 strikes.
• Maximum positions are at 11000 CE and 10500 PE.
• The Nifty Put Call Ratio (PCR) finally stood at 1.64 for January month contract.
• Advance Decline ratio in F&O segment was at 2.95, Advance (162) + Decline (55) + Unchanged (0) = 217
Derivative Idea (18-01-2018)
Bank of India losses around -7.30% of open interest as short unwinding on Wednesday’s trade. Bank of India formed bullish engulfing and squat bar on daily which gives first probable indication of trend reversal.
Bank of India has hurdle at 166, Break and sustain above 166 will take it to 175—180++ mark mark days to come, further upside rally will see on close above 180++ mark, else could touch its support level of 155 again.
Fresh selling can be initiated below 155.00
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (18th Jan 2018)
Buy Bank of India future above 166 with stop loss of 155 for the initial target 175—180+++mark
GMR Infrastructure- Top Pick
Yesterday made 52 week high with increased volume.
By this time of the day, a total of 240,174,322 shares were traded with the 5 day average volume being 80,360,750, 10 day average volume being 66,531,121 and 30 day average volume being 56,853,709.
In contrast to previous day’s values, the 5 day average volume rose 18767924 stocks, 10 day average volume rose 5385373 stocks and 30 day average volume rose 3870931 stocks.
Now what to expect???
On Daily chart, Hurdle at 24.00. Break and sustain above 24.00 will take to 25.50---26.20 mark
Support intact at 22.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (18th Jan 2018)
Buy GMR Infrastructure above 24 with stop loss below 22 (on a closing basis) Target 25.50—26.20
Results Today
Bharti Airtel Limited
Yes Bank Limited
UltraTech Cement Limited
Hindustan Zinc Limited
Adani Ports and Special Economic Zone Limited
Adani Enterprises Limited
More Will Update Soon!!
