Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 16th Nov 2017
Nifty 10118 /Sensex 32760/ Bank Nifty 25218
16 Advances / 32 Declines/ 2 Unchanged
Benchmarks extend losing streak for third straight session
Extending losing streak for third straight day, Indian equity benchmarks ended the dismal day of trade with a cut of over half a percent on Wednesday. Sentiments remained downbeat since morning as markets after a negative start never looked confidant and extended their southward journey to end below their crucial 32,800 (Sensex) and 10,150 (Nifty) levels. Traders remained concerned with trade deficit widening to its highest in nearly three years in October, as export growth contracted for the first time after more than a year. The trade deficit widened to $14.02 billion last month from $8.98 billion in September. Merchandise exports for October fell 1.12 percent from a year earlier to $23.1 billion, dropping for the first time since August 2016. Market participants paid no heed on Central Board of Direct Taxes’ statement that it was not only confident that the Income Tax (IT) department would achieve Rs 9.80 lakh crore target of direct tax revenue collections for the financial year 2017-18, but that it would surpass it.
Traders failed to get any sense of relief with private report stating that the decision to lower goods and services tax (GST) rates on over 200 items could help pull down retail inflation by 20 basis points from the current levels driven by lower food and beverage prices. Investors also failed to get any solace with report that private equity (PE) investors announced transactions of $16.40 billion for January- October, a 55% jump over the year-ago period, driven by big-ticket deals. For October alone, the deal value read $1.6 billion. Besides, Finance Minister Arun Jaitley’s statement that India is set to become an ‘extremely attractive’ country to do business, with greater digitisation and formalisation of financial activities and businesses, failed to provide any respite to the equity markets.
Somber global cues too dampened sentiments with European counterparts making a gloomy start, as a fall in commodity stocks and continued profit taking sent the shares to an eight-week low. The number of people in work in Britain fell by the most in more than two years in the three months to September, a latest sign of weakness in Britain’s Brexit-bound economy. Asian markets ended in red terrain on Wednesday, as the cautious sentiments from the last session continued, with energy-related plays in the region falling on weakening oil prices.
Back home, realty sector stocks remained in focus with industry body Assocham stating that if the real estate sector is brought within the ambit of GST, it should be along with the stamp duty and moderate rate, and should not add to the cost of housing and construction. Meanwhile, ADAG companies like Reliance Communications (RCom), Reliance Home Finance, Reliance Infrastructure, Reliance Nippon Asset Management, Reliance Power and Reliance Capital closed in red after RCom defaulted on Dollar bonds.
Separately, the National Company Law Appellate Tribunal (NCLAT) issued a notice to RCom over a petition filed by Manipal Technologies seeking its due. State Bank of India (SBI) and Punjab National Bank (PNB) also closed in red as they have got maximum exposure of debt to RCom.
FII’s Activity 15th-Nov-17
The FIIs as per Wednesday’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 8083.35 crore against gross selling of Rs 5402.41 crore. Thus, FIIs stood as net buyers of Rs 2680.94 crore in equities.
In the debt segment, the gross purchase was of Rs 925.62 crore with gross sales of Rs 727.34 crore. Thus, FIIs stood as net buyers of Rs 198.28 crore in debt.
Now what to expect ??
Nifty Levels
Below 10125 will see more downside panic till 10080---10050 and then to 9920 mark in days to come else it could test its resistance level of 10250 again.
Trade within a range
Bank Nifty
Below 25250 will see more downside panic till 25150---25000 mark else it could test its resistance level of 25450 again.
Trade with levels only
Daily Derivative Outlook 16th Nov 2017
• Nifty (Oct) futures closed at a Premium of 36.30 points versus a premium of 47 points.
• Call writing was seen at Nifty 10400 strike and Maximum Put buying was seen at Nifty 10300 strikes.
• Maximum positions are at 10500 CE and 10200 PE.
• INFRATEL (36%), REPCOHOME (27%), VOLTAS (26%), CADILAHC (21%) and BATAINDIA (19%) were the top gainers in terms of open interest.
• VOLTAS (-16%), BANKBARODA (-15%), HEXAWARE (-11%), CEATLTD (-9%) and JUSTDIAL (-8%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 1.13, Advance (46) + Decline (171) + Unchanged (1) = 218
Derivative Idea (16-11-2017)
IGL losses 8.20% of open interest as short build up on Wednesday’s trade. On Daily chart IGL is trading below 21DEMA.
Now what to expect???
Support at 303.50, Break and sustain below 303.50 will take it to 290—285 mark in days to come.
313.00 will act as major Hurdle.
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (16th Nov 2017)
Sell IGL below 303.50 with stop loss of 313 for the initial target 290—285 mark.
Ambuja - Top Pick
Yesterday Ambuja Cement shown more than 2% upside move, on daily chart Ambuja cement has formed Marubozu Candlestick Pattern which indicate upside movement certain in it.
Now what to expect???
Ambuja cement has a hurdle at 278.50, break and sustain above 278.50 will see rally till 285---288++ in days to come.
Support intact at 270
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (16th Nov 2017)
Buy Ambuja cement above 278.50 with stop loss below 272 (on a closing basis) Target 285--288+++.
Corporate Action
Manappuram Finance Limited-Interim Dividend - Re 0.50 Per Share
Balkrishna Industries Limited-Interim Dividend - Rs 2.50 Per Share (Purpose Revised)
Bharat Forge Limited-Interim Dividend Rs 2/- Per Share
Page Industries Limited-Interim Dividend Rs 35/- Per Share (Purpose Revised)
More Will Update Soon!!
