Monday, February 12, 2018

Update on Nifty levels, Bank Nifty levels,Derivative Outlook and Equity Pick of the day 12th Feb 2018

Update on Nifty levels, Bank Nifty levels,Derivative Outlook and Equity Pick of the day 12th Feb 2018

Nifty 10454 /Sensex 34005 / Bank Nifty 25463

12 Advances /38 Declines/ 0 Unchanged

Markets resume southward journey on global sell-off

Resuming southward journey after a session’s halt, Indian equity benchmarks ended the session with a cut of over a percentage point, as global equity markets continued to tumble on worries about rising inflation and higher interest rates. After a gap-down start markets traded in red terrain throughout the session, as traders remained anxious with Former Reserve Bank of India (RBI) governor Duvvuri Subbarao’s statement that Finance Minister Arun Jaitley’s decision to relax on fiscal consolidation to give himself more room to spend is a questionable, and by far the most disappointing decision of the budget. He added that the finance minister inherited a fiscal deficit of 4.2% of GDP and he brought it down to 3.5%. But this was at a time when oil price was low and food prices were soft because of good monsoons. Sentiments remained dampened on report that foreign portfolio investors (FPIs) have turned wary on Indian shares again owing to the recent global market sell-off triggered by rising bond yields in developed markets including in the US and the euro zone. FPIs have sold shares worth Rs 3,665.6 crore in the domestic stock market (including provisional data of Wednesday and Thursday) in February after pumping close to Rs 13,000 crore into Indian equities in January.

Traders failed to get any sense of relief with private report highlighting that fears of the Reserve Bank of India going for a rate hike are overdone and there is still room for a 25bps rate cut in the August monetary policy review, provided rains are normal. Traders also shrugged off Nasscom’s report that outlook for the Indian information technology (IT) sector is cautiously positive in 2018 as challenges remain amidst prospects of greater IT spending with global and US economies improving.

Weak opening in European markets too dampened sentiments. Output in the UK manufacturing sector grew 0.3% in December, according to figures published on Friday by the Office for National Statistics (ONS). The 0.4% rise in November was revised down to a gain of 0.2%. All the Asian markets ended in red on renewed worries about rising inflation and higher interest rates. Chinese markets edged lower weighed down by factors such as investors attempting to stay liquid ahead of the Lunar New Year holidays and pressure to meet rising margin calls.

Back home, stocks related to public sector banks (PSBs) edged lower after India Ratings and Research stated that PSBs may need capital of Rs 2.06 trillion for a credit growth of the 8-9 per cent in the financial year 2019. However, stocks related to sugar space edged higher after the central government put a ceiling on the amount of sugar mills can sell by imposing significant minimum stocks for the next two months to check falling prices. Stocks of Aviation space viz. InterGlobe Aviation, Jet Airways (India) and SpiceJet edged higher amid report that the country is likely to have 855 million air travelers in 2030-31, indicating a three-fold increase in the number of air travelers which was 265 million in 2016-2017. As per the data shared by the government, the growth in air traffic over a period of around 15 years will also be more than double the existing passenger handling capacity of airports in the country, which is at 334 million.

FII’s Activity 9th-Feb-18

The FIIs as per Friday’s data were net sellers in equity and debt segments both, according to data released by the NSDL.

In equity segment, the gross buying was of Rs 4459.97 crore against gross sell of Rs 6685.68 crore. Thus, FIIs stood as net sellers of Rs 2225.71 crore in equities.

In the debt segment, the gross purchase was of Rs 1648.16 crore with gross sales of Rs 1708.44 crore. Thus, FIIs stood as net sellers of Rs 60.28 crore in debt.

There were no buying and selling, in the hybrid segment.

Now what to expect ??

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Nifty Levels 

Nifty dropped a little over 300 points second consecutive week and Indices were seen dancing to the tune of global equity markets.

Support at 10300. 

Now fresh selling will do only close below 10300 marks else we will see sharp upside rally in it.

Hurdle intact at 10500--10650.

Trade with levels only

Bank Nifty 

Support at 25350. Breaks and sustain below 25350 will take it 24850---24700.
Hurdle intact at 26700

Daily Derivative Outlook 12th February 2018

Nifty (February) futures closed at a Premium of 14.75 points versus a Discount of 4.60 points.

HINDZINC (11%), GLENMARK (9%), BATAINDIA (9%), ADANIENT (8%) and SRTRANSFIN (8%) were the top gainers in terms of open interest.

ACC (-7%), CEATLTD (-7%), PIDILITIND (-6%), SUNTV (-6%) and AJANTPHARM (-5%) were the top losers in terms of open interest.

Maximum call writing was seen at Nifty 10400 strike and maximum put buying was seen at Nifty 10500 strikes.

Maximum positions are at 11100 CE and 10500 PE.

The Nifty Put Call Ratio (PCR) finally stood at 1.09 for February month contract.

Advance Decline ratio in F&O segment was at 0.71, Advance (89) + Decline (125) + Unchanged (3) = 217

Derivative Idea (12-02-2018)

Bata India gain around 8.00% of open interest as long build up on Friday’s trade. 

Hurdle at 721, above 721 rally remain continue till 750—765++ mark else could touch its support level of 695.00

Fresh selling can be initiated below 695

Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.

Trading Recommendation (12th Feb 2018)

Image result for bata india

Buy Bata India future above 721 with stop loss of 695 for the initial target 750—765++  mark.

Ashok Leyland - Top Pick

The stock been consolidating for over 16 weeks and on the daily chart it has finally broken out from a consolidation rectangle pattern. 

Now what to expect???

On Daily chart, break and sustain above 134.50 will see rally till 139—140 in weeks to come. support intact at 130.

Any sharp downside panic will be buying opportunity in it. 

Trading Recommendation (12th Feb 2018) 

Image result for ashok leyland logo

Buy Ashok Leyland above 134.50 with stop loss below 130 (on a closing basis) Target 139—140.

Results Today

Britannia Industries Limited

Power Finance Corporation Limited

NHPC Limited

Indian Bank

GAIL (India) Limited

Gujarat State Fertilizers & Chemicals Limited

CG Power and Industrial Solutions Limited

Bank of India

More Will Update Soon!!