Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 1st Dec 2017
Nifty 10226 /Sensex 33149/ Bank Nifty 25332
11 Advances / 39 Declines/ 0 Unchanged
Benchmarks end November F&O expiry session on pessimistic note
Indian equity markets truly depicted the choppiness of F&O expiry session on Thursday with key gauges ending the session with a cut of over a percentage point. After a cautious negative start, markets traded range-bound for most part of the session, but last hour sell off dragged key gauges below their crucial 33,200 (Sensex) and 10,250 (Nifty) levels. Sentiments remained dampened as traders remained on sidelines ahead of September quarter GDP data that will be announced later in the day, though it is expected that economic growth pace is likely to pick up in the three months ending in September, halting a five-quarter slide as businesses started to overcome teething troubles after the bumpy launch of a national sales tax. Selling got intensified in final hour of trade on report that India’s fiscal deficit at the end of October hit 96.1 percent of the budget estimate for 2017- 18, mainly due to lower revenue realisation and rise in expenditure. In absolute terms, the fiscal deficit -- the difference between expenditure and revenue -- was Rs 5.25 lakh crore during April-October of 2017-18. During the same period of 2016-17, the deficit stood at 79.3 percent of the target.
Sentiments also remained dampened with Chief Economic Advisor Arvind Subramanian’s statement that demonetization and GST rollout may have reinforced the growth deceleration that had already set in. He added that not just growth, but investment, credit, exports, industrial production they all started decelerating sometime in the second quarter last year. Traders also remained concerned with a foreign brokerage report enlightening that a prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors. The report added that all good things must come to an end and there will be a bear market, eventually. Traders paid no heed towards the report that India has moved up one place to the 68th spot on the Global Entrepreneurship Index of 2018, which is topped by the US. Traders also shrugged off Minister of State for Finance, Shiv Pratap Shukla’s statement that by March 2018, GST will become so simple that people will have no issues.
Weakness in regional counterparts too dampened sentiment with most of the Asian markets ending lower on Thursday, weighed down by a plunge in high-flying tech shares on fears that a long boom in micro-chips may have peaked, while virtual currency bitcoin steadied after a roller-coaster ride in the previous session. However, European markets trading mostly in green in early deals, as investors shrugged off concerns over North Korea and looked ahead to euro zone inflation data due later in the day.
Back home, steel stocks exhibited mixed trend with a report from Moody’s Investors Services which has said that profitability of Indian steel companies is likely to improve next year despite an increase in raw material prices. The rating agency said that among major steel-producing Asian countries, operating conditions will be most supportive in India because of robust domestic demand and protectionist measures, and despite an increase in raw material prices and new capacity. Export oriented stocks too remained in focus, as the Finance Ministry asked exporters to file GSTR 3B and table 6A of GSTR 1 on the GSTN portal and Shipping Bill(s) on the Customs EDI System, which are pre-requisites for sanction of payment.
FII’s Activity 30th-Nov-17
The FIIs as per Thursday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 4859.48 crore against gross selling of Rs 5481.92 crore. Thus, FIIs stood as net sellers of Rs 622.44 crore in equities.
In the debt segment, the gross purchase was of Rs 1607.38 crore with gross sales of Rs 1479.42 crore. Thus, FIIs stood as net buyers of Rs 127.96 crore in debt.
Now what to expect ??
Nifty Levels
Below 10260 will see more downside panic till 10225---10180 and then to 10090 mark else it could test its resistance level of 10450 again.
Hurdle intact 10450 and fresh buy can be initiated only above 10450.
Bank Nifty
Below 25350 will see more downside panic till 25250 and then to 25100---25000 mark else it could test its resistance level of 25900 again
Hurdle intact 25900 and fresh buy can be initiated only above 25900.
Trade within a range
Daily Derivative Outlook 1st DEC 2017
• Nifty (Nov) futures closed at a premium of 5.1 points versus a premium of 0.60 points.
• The Nifty OI PCR declined to 1.03 from 1.27 in the previous session, indicating there was more buildup of OI in the Call segment. Buildup of OI was seen in the 10250-10350 Dec Calls. Combined with a fall in the option price, it indicates that call writing has happened at these strikes implying immediate resistance at these levels for the near term. Put buying was seen in the 10250-10150 Dec strikes indicating that certain traders were taking a bearish view.
• FORTIS (4.7%), JISLJALEQS (4.4%), JSWENERGY (3.4%), TATAGLOBAL(2.50%) and BALKRISIND (2.46%) were the top gainers in terms of open interest.
• SREINFRA (-6.45%), SUZLON (-4.4%), PNB (-3.22%), BALRAMCHIN (-11%) and INDIGO (-3.2%) were the top losers in terms of open interest.
Derivative Idea (1st Dec 2017)
Andhara Bank losses around 52.32% of open interest as rollover on Thursday’s trade. Andhra Bank trading below its 21 & 55 DEMA which indicated downside momentum is certain in it.
Now what to expect??
Formed Squat Bar on daily chart. Below 62.50 panic remain continue till 60.00--59.50 and then to 58.00 mark. 63.30 will act as resistance.
Fresh buying can be initiated above 63.30.
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (1st Dec 2017)
Sell Andhara Bank below 62.50 with stop loss of 63.3 for the downside target of 61.00---60.00
Punjab National Bank - Top Pick
Yesterday Punjab National Bank shown more than 3.27% downside move
After being range and trading in a declining trend for the past three days, the stock has shown signs of Bearish.
Now what to expect???
Break and sustain below 176.50 will see panic till 171---169 in days to come. Further downside will see if closes below 169.
Resistance intact at 182
Any sharp upside rally will be selling opportunity in it.
Trading Recommendation (1st Dec 2017)
Sell Punjab National Bank below 176.50 with stop loss above 182 (on a closing basis) Target 171—169.
More Will Update Soon!!
