Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 23rd Jan 2018
Nifty 10966 /Sensex 35798/ Bank Nifty 27041
27 Advances / 23 Declines/ 0 Unchanged
Benchmarks hit fresh record closing high levels; Nifty conquers 10,950 mark
Extending their record hitting spree for fourth consecutive day, Indian equity benchmarks once again settled at fresh closing high levels, with Nifty conquering its crucial 10,950 mark, while Sensex ended tad below its crucial 35,800 level. After making an optimistic start, domestic gauges gained momentum in second half of trade, as traders took some encouragement with report that overseas investors have put in a whopping Rs 87 billion in the Indian capital markets this month so far on expectation of recovery in corporate earnings and attractive yields. This follows an investment of Rs 2 trillion in the capital markets (equity and debt) in the entire 2017. Some support also came after a report enlightened that a greater proportion of provident fund savings could be headed for the stock market with shares rising to successive records in past weeks. Such a move could more than double the provident fund money invested in exchange-traded funds (ETFs) over time. The government is considering a plan to raise the equity investment limit for the Employees’ Provident Fund Organization (EPFO) to 25% from 15%.
Traders also got some support with IMF Chief Christine Lagarde and Norway’s Prime Minister Erna Solberg's statement that raising women's participation in the labour force to the same level as men can boost India's Gross Domestic Product (GDP) by 27 per cent. Private report stating that India will overtake China to be the fastest growing large economy in 2018 and the country’s equity market will become the fifth largest in the world, too aided sentiments. The report added that while the rest of the world offers low growth and insufficient structural change, India, by contrast, is seen as a reforming economy with the prospect of strong long-term growth. Meanwhile, Prime Minister Narendra Modi has indicated that the upcoming Budget will not be a populist one and it’s a myth that the common man expects ‘freebies and sops’ from the government. He also pledged that his government will stay on the course of the reforms agenda that has pulled out India from being among the ‘fragile five’ economies of the world to being a bright spot.
On the global front, European markets were trading mostly in red in early deals despite Germany’s Social Democrats voted to enter coalition talks with Chancellor Angela Merkel’s government, helping end months of political uncertainty in Europe's largest economy. Asian markets ended mostly in green, as global investors shrugged off the latest US government shutdown.
Back home, public sector banking stocks remained under pressure on ASSOCHAM-CRISIL report enlightened that India’s banking sector will be saddled with gross non-performing assets (GNPAs) worth a staggering Rs 9.5 lakh crore by March-end, up from Rs 8 lakh crore in the year-ago period. The report added that GNPAs will increase to Rs 9.5 lakh crore as on March 31, 2018 i.e. about 10.5 per cent of total advances, while stressed assets are expected to be at Rs 11.5 lakh crore. Steel stocks edged lower despite report that the steel ministry is in talks with Railways to ensure adequate availability of rakes for industries that have been saying the problem has led to a shortage of raw materials at plants.
FII’s Activity 22nd -Jan-18
The FIIs as per Monday’s data were net buyers in equity and debt segments both, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 6214.90 crore against gross selling of Rs 5127.06 crore. Thus, FIIs stood as net buyers of Rs 1087.84 crore in equities.
In the debt segment, the gross purchase was of Rs 1913.85 crore with gross sales of Rs 118.01 crore. Thus, FIIs stood as net buyers of Rs 1795.84 crore in debt.
In the hybrid segment, the gross buying was of Rs 0.98 crore against gross selling of Rs 5.83 crore. Thus, FIIs stood as net sellers of Rs 4.85 crore in hybrid segment.
Now what to expect ??
Nifty Levels
Above 10990 will see rally till 11030---11080 and then to 11300 mark else could touch its support level of 10880 again.
Trade with levels only
Bank Nifty
Support at 26750 and Resistance at 27085
Above 27085 will see rally till 27200---27500 mark else could touch its support level of 26750 again
Daily Derivative Outlook 23rd January 2018
•Nifty (January) futures closed at a premium of 1.80 points versus a premium of 6.35.
• JPASSOCIAT (32%), NIITTECH (23%), VGUARD (19%), HAVELLS (18%) and INDIACEM (18%) were the top gainers in terms of open interest.
• JSWENERGY (-10%), ICIL (-9%), SYNDIBANK (-9%), ADANIENT (-9%) and CONCOR (-9%) were the top losers in terms of open interest.
• Maximum call buying was seen at Nifty 10800 strike and maximum put buying was seen at Nifty 10900 strikes.
• Maximum positions are at 11000 CE and 10800 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 1.35, Advance (124) + Decline (92) + Unchanged (0) = 217
Derivative Idea (23-01-2018)
LICHSGFIN losses around -23.60% of open interest as short unwinding on Monday’s trade.
LICHSGFIN unable to breach its major support level of 540 and bounced back sharply.
Now what to expect???
Hurdle at 577, Above 577 rally remain continue till 590—600 and then to 620++ mark in days to come.
Support and stop loss below 560
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (23rd Jan 2018)
Buy LICHSGFIN future above 577 with stop loss of 560 for the initial target 590—600 and then to 620++mark.
Marico Ltd - Top Pick
On a Daily chart Marico forming bullish Engulfing candle Pattern which shows positive momentum certain in it.
Marico Ltd took support of 20 DMA and bounced back sharply.
Now what to expect???
On Daily chart, Hurdle at 318 will see rally till 325--330 in weeks to come.
Support intact at 311
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (23rd Jan 2018)
Buy Marico above 318 with stop loss below 311 (on a closing basis) Target 325—330.
Results Today
Chennai Petroleum Corporation Limited
RBL Bank Limited
United Spirits Limited
Indiabulls Housing Finance Limited
Can Fin Homes Limited
More Will Update Soon!!
