Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 16th Oct 2017
Nifty 10096 /Sensex 32182/ Bank Nifty 24361
32 Advances / 18 Declines/ 0 Unchanged
Dalal Street celebrates early Diwali; Nifty hits all time high
Extending previous session’s rally, boisterous benchmarks once again showcased an enthusiastic performance on Friday, with frontline gauges surpassing their crucial 32,400 (Sensex) and 10,150 (Nifty) levels on sustained buying by fund and retail investors ahead of Diwali. Sentiments remained jubilant since start, as key bourses made a gap up opening and traded with traction through the session. Sentiments remained up-beat with traders taking encouragement from double dose of good economic news. India's industrial production grew at a nine-month high of 4.3% in August due to good performance of mining, electricity and capital goods sectors, while the retail inflation declined to 3.28% in September, compared to 4.39% during the same month last year and 3.36% in the previous month. Adding to the optimism, the International Monetary Fund lauded government’s recent efforts to lower the compliance burden under the Goods and Services Tax, but it also said that efforts should also be made to lower the tax slabs and minimise exemptions.
Some support also came after the World Bank chief said that the reforms undertaken by Prime Minister Narendra Modi have been significant and the results would be reflected in the mid and long-term growth figures, days after the global lender forecast that India’s GDP may slowdown to 7% in 2017. Investors took note of CRISIL’s report which highlighted that banks are likely to need nearly Rs 3.3 lakh crore this fiscal as provisioning for large NPA accounts in the current financial year. The report said with the economic value of assets underlying NPAs eroding with time, and resolutions are hard to come by, banks would need to step up on provisioning, mainly for large corporate NPAs. However, small amount of profit booking which took place in dying hour of trade pulled markets to end off day’s high.
Firm trading in European counters too aided sentiments ahead of fresh economic data, earnings, and speeches from policymakers of the Central Bank. Asian markets held firm near a 10-year high on Friday thanks to expectations of brisk global growth, although investors held off chasing the shares higher ahead of US and Chinese economic data as well as the Chinese Communist Party congress next week.
Back home, telecom stocks rang loud, as the Tata Group agreed to sell its mobile business to Bharti Airtel for free, on a 'debt-free, cash-free basis, intensifying the consolidation process underway in the telecom industry. Power stocks remained on buyers’ radar with the Minister of State (Independent Charge) for Power and Renewable Energy, R K Singh stating that India’s energy needs are going to double in the next 6-7 years at the present rate of growth of the economy. Stocks related to IT pack too edged higher after industry body NASSCOM shifted the revenue projection for India’s Business Process Management (BPM) sector to $50-$55 billion by 2025 from the present target of $50 billion by 2020. It added that the revenue for India’s BPM sector is projected to increase from $30 billion in FY17 to $50-55 billion by 2025.
FII’s Activity 13th-Oct-17
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 4393.50 crore against gross selling of Rs 4690.30 crore. Thus, FIIs stood as net sellers of Rs 296.80 crore in equities.
In the debt segment, the gross purchase was of Rs 552.68 crore with gross sales of Rs 569.14 crore. Thus, FIIs stood as net sellers of Rs 16.46 crore in debt.
Now what to expect ??
Nifty Levels
Close above 10200 will see more upside rally till 10255 and then to 10400---10550 mark else it could test its support level of 10000 again
Closed below 10000 will see more downside panic in Nifty.
Trade within a range
Bank Nifty
Above 24800 will see more upside rally till 25000 and then to 25300---25550 mark else it could test its support again.
Break and sustain below 24200 will see more downside panic till 23875---23750 and then to 23580
Trade within a range
Daily Derivative Outlook 16th Oct 2017
• The Nifty (Oct) futures closed at a premium of 24.95 points versus a premium of 15.00 points.
• Maximum call writing seen at 10400, Maximum put writing seen at 10100. Maximum Call buying was seen at 10100.
• Maximum positions are at 10200 CE and 10000 PE.
• MCX (21%), BHARTIARTL (15%), RAMCOCEM (14%), KTKBANK (12%) and PVR (11%) were the top gainers in terms of open interest.
• TORNTPHARM (-13%), CUMMINSIND (-11%), TCS (-9%), NBCC (-7%) and CHENNPETRO (-7%) were the top losers in terms of open interest.
• The Nifty Put Call Ratio (PCR) finally stood at 1.63 for October month contract.
Derivative Idea (16-10-2017)
UltraTech Cement losses around 2.95 of open interest as short unwinding on Friday trade. It is trading above its resistance level of 4000.
Now what to expect??
Minor hurdle at 4020 ….Above 4020 rally remain continue till 4120—4150 and then to 4250++ mark in days to come.
Support and stop loss below 3950
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (16 Oct 2017)
Buy Ultratech Cement above 4020 Stop loss 3950(on closing basis) Target 4120 -4150 and then to 4250++.
Parag Milk- Top Pick
Last week, the stock gave a breakout from the ‘Falling Trend Line’ and managed to sustain above the same. Volumes were also healthy on the breakout, which is a positive sign for the counter.
Also, the momentum oscillator ‘RSI - Smoothened’ and ‘MACD’ are placed positively on both the daily and weekly charts which is an indicating of strength in the counter.
Considering above technical evidence, we are expecting a continuation in the ongoing momentum towards 275- 285 levels in the coming weeks.
By this time of the day, a total of 178,672 shares were traded with the 5 day average volume being 417,676 , 10 day average volume being 411,741 and 30 day average volume being 234,618.
The 5 day average volume fell 18220 stocks, 10 day average volume rose 76643 stocks and 30 day average volume rose 27795 stocks relative to the previous day' s values.
The price went up to as much as Rs. 354.80 and went down as low as Rs. 100.90 in the last 52 weeks.
Thus, we advise to buy the stock at current price and add on declines around 253 with a stop-loss of 244 on a closing basis.
Now what to expect???
Break and sustain above 262 will see nonstop rally till 282---288++ in weeks to come.
Looks bearish only if close below 244 marks.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (16th Oct 2017)
Buy Parag Milk above 262 with stop loss below 244 (on a closing basis) Target 282–-288.
Result Today
Bajaj Finserv Limited
The Federal Bank Limited
Dewan Housing Finance Corporation Limited
DCB Bank Limited
Colgate Palmolive (India) Limited
Bajaj Finance Limited
More Will Update Soon!!
