Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 27th Nov 2017
Nifty 10389 /Sensex 33679/ Bank Nifty 25779
35 Advances / 15 Declines/ 0 Unchanged
Bulls tighten grip on Dalal Street; gain for seventh straight session
Extending their winning streak for seventh straight session, Indian equity benchmarks ended the trade with a gain of over quarter a percent, recapturing their crucial 10,350 (Nifty) and 33,600 (Sensex) levels. Sentiments remained upbeat throughout the session with traders taking support from a private report that the slowdown in the economy has bottomed out, and going forward, the pace of recovery will depend on initiatives the government takes to boost growth momentum, especially private investment. The report added that there has been improvement on some parameters of the economy following the slowdown, post demonetization and GST. Traders also took some encouragement with the Union minister Suresh Prabhu’s statement that the commerce and industry ministry is chalking out a 'proper' business plan based on market research in its bid to promote exports of goods and services. He added that proper market segmentation is the need of the hour to understand the potential of domestic goods and services. Securities and Exchange Board of India’s (SEBI) plan to ease takeover rules to speed up the resolution of insolvency proceedings for stressed companies as local lenders seek to recover about Rs 9 lakh crore from entities rendered unviable by the mounting debt pile, too aided sentiments.
Markets continued taking support from report that the global ratings agency Standard & Poor’s (S&P) will revise India’s sovereign ratings. In 2012, the outlook for the country was lowered to negative, which was raised to stable soon after the Modi government assumed office in 2014. The rating, however, remained unchanged at ‘BBB-’. Some support also came with Confederation of Indian Industry’s (CII) statement that the government's recent move to give infrastructure status to the logistics industry in India, will not only spur growth, but will also bring in more investments into this sector. Traders also took some comfort with the President’s assenting to the ordinance to amend the Insolvency and Bankruptcy Code (IBC) that will bar defaulters from bidding for the stressed assets received thumbs up from stakeholders who described it as a major step towards providing comfort to incoming new investors.
Positive trading in European counters too aided sentiments. The growing prospect of a grand coalition in Germany boosted sentiments around the region’s equities, as the DAX has been stuck around the 13,000-point level for the past two weeks. Asian markets were trading mostly in green with Japanese manufacturing activity expanding at the fastest pace in more than three years in November as output, new orders, and new export orders all accelerated in a sign the economy will continue its growth streak.
Back home, stocks related to public sector oil marketing companies (OMCs) remained on buyers’ radar, as the government exempted the merger of oil and gas PSUs from the purview of competition watchdog CCI. However, PSU banking stocks remained under pressure in today’s trade as the amendment to the IBC that bars promoters from bidding for their own distressed companies could impact lenders as it would bring down the value of these assets. Mixed reactions displayed in hospital stocks on report that India may soon tighten the control on private hospitals and other clinical establishments, with the central government having decided to urge all states to implement an Act that was passed in 2010 in order to curb malpractices by such establishments.
FII’s Activity 24th-Nov-17
The FIIs as per Friday’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 5676.89 crore against gross selling of Rs 4300.13 crore. Thus, FIIs stood as net buyers of Rs 1376.76 crore in equities.
In the debt segment, the gross purchase was of Rs 74.44 crore with gross sales of Rs 342.41 crore. Thus, FIIs stood as net sellers of Rs 267.97 crore in debt.
Now what to expect ??
Nifty Levels
Above 10435 will see more upside rally till 10480 and then to 10530---10585 mark else it could test its support level of 10275 again.
Bank Nifty
Above 25900 will see more upside rally till 26200 and then to 26400---26600 mark else it could test its support level of 25600 again.
Trade within a range
Daily Derivative Outlook 27th Nov 2017
• Nifty (Nov) futures closed at a Premium of 19.65 points versus a premium of 15.65 points.
• Maximum Call buying was seen at Nifty 10300 strike and Maximum Put writing was seen at Nifty 10400 strikes.
• Maximum positions are at 10500 CE and 10300 PE.
• JUBLFOOD (48%), SYNDIBANK (18%), RBLBANK (12%), NCC (11%) and TITAN (10%) were the top gainers in terms of open interest.
• AMARAJABAT (-17%), BATAINDIA (-16%), TV18BRDCST (-14%), HAVELLS (-10%) and IBREALEST (-7%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 0.90, Advance (135) + Decline (80) + Unchanged (3) = 218
Derivative Idea (27-11-2017)
Auropharma losses around 2.10% of open interest as Short unwinding on Friday’s trade. On Daily chart Auropharma is trading near immediate resistance level 720 while.
Now what to expect??
Hurdle at 720, Break and sustain above 720 will take it to 750—765 and then to 780++ mark in days to come.
700 will act as major support.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (27th Nov 2017)
Buy AuroPharma above 720 with stop loss of 700 for the initial target 750—765 and then to 780+ mark.
Colgate Palmolive - Top Pick
After being under pressure and trading in a declining trend for the past six weeks, the stock has finally shown signs of reversal.
Colgate Palmolive (Colpal) found strong support around its 200-DMA and bounced back re-conquering other short term averages too. The stock has also broken out from a Symmetrical Triangle pattern on the daily chart
Now what to expect???
Colgate Palmolive has a hurdle at 1057 break and sustain above 1057 will see rally till 1070---1085++ in days to come.
Further upside will see if closes above 1085.
Support intact at 1040
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (27th Nov 2017)
Buy Colgate Palmolive above 1057 with stop loss below 1040 (on a closing basis) Target 1070—1085+++.
More Will Update Soon!!
