Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 20th Dec 2017
Nifty 10463 /Sensex 33836/ Bank Nifty 25716
39 Advances / 11 Declines/ 0 Unchanged
Markets hit all-time closing high levels; Sensex surpasses 33,800 mark
Extending northward journey for fourth straight session, Indian equity benchmarks ended the Tuesday’s trade at all-time closing high levels, with frontline gauges recapturing their crucial 33,800 (Sensex) and 10,450 (Nifty) levels. Markets started the session on optimistic note with traders continued getting strength with the assembly election results announced yesterday. Blue chips soared during the trade after victory of Bharatiya Janata Party (BJP) in his home state of Gujarat and Himachal Pradesh, raising hopes of continued reforms. Traders also took encouragement with the private report highlighting brighter growth prospects for India by FY20 and beyond. India’s growth prospect is likely to see a slowdown in the next two years followed by recovery in the medium term, with 2019-20 GDP expected at around 7.6 per cent. Meanwhile, the government has sought Parliament’s approval to spend a net additional Rs 33,380 crore ($5.21 billion) in new spending in the fiscal year to March 2018. The additional spending will be on top of an approved spending of Rs 21.4 lakh crore in the annual budget.
Markets extended its rally in last leg of trade to end near intraday highs after Finance Ministry in its year-end review report stated that overall fundamentals of the economy remained strong in the current financial year, on the back of firm macroeconomic indicators, improvement in World Bank's ease of doing business ranking and sovereign rating upgrade by Moody’s. Market participants shrugged off report that the government seeking Parliament’s approval to spend a net additional Rs 333.8 billion ($ 5.21 billion) in new spending in the fiscal year to March 2018. The additional spending will be on top of an approved spending of $ 334.9 billion in the annual Budget. Also, investors ignored India Ratings’ report where it has warned that the farm debt waivers announced by the five large states together will widen the combined fiscal deficit of the states by Rs 1,07,700 crore or 0.65 percent of GDP this financial year.
On the global front, European counters made a positive start, as investors remain focused on the progress of the proposed tax legislation in the US. The House of Representatives will vote on the most sweeping, pro-growth tax reform legislation later today, while the Senate vote is expected to follow short on the heels. Asian markets exhibited mixed trend on Tuesday, as investors remained optimistic about the outlook for Republican tax reform.
Back home, stocks of public sector banks remained on buyers’ radar on global rating agency Moody’s report that capital raising by a number of Public Sector Banks (PSBs), including PNB and UBI, is credit positive because it will help improve their loss-absorbing buffers. The Pharma stocks remained buzzing, as the National drug pricing regulator NPPA has said it had notified prices of 65 essential formulations, including those used for the treatment of diabetes, infections, pain and high blood pressure. Sugar stocks remained in sweet spot on news that the government will scrap the stockholding limit on sugar traders. The stockholding limit currently on the traders is about 500 tons of sugar that he can keep on a maximum limit. Stocks related to tourism and hotel space remained in focus, as the Union Tourism Minister K J Alphons has said that there was no adverse impact of the Goods and Services Tax (GST) rollout on foreign tourist arrivals (FTAs) in the country.
FII’s Activity 19th-Dec-17
The FIIs as per Tuesday’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 4984.26 crore against gross selling of Rs 4866.07 crore. Thus, FIIs stood as net buyers of Rs 118.19 crore in equities.
In the debt segment, the gross purchase was of Rs 856.83 crore with gross sales of Rs 143.00 crore. Thus, FIIs stood as net buyers of Rs 713.83 crore in debt.
Now what to expect ??
Nifty Levels
Close above 10480 will see rally till 10530---10600. More and more upside rally will see only close above 10600 else it could test 10350 again.
Trade with levels only
Bank Nifty
Above 25750 will see rally till 25900---26200.
More and more upside rally will see only close above 26200 else it could test 25300 again.
Trade within a range
Daily Derivative Outlook 20th December 2017
• Nifty (Dec) futures closed at a premium of 26.25 points versus a premium of 24.00 points.
• Maximum call buying was seen at Nifty 10500 strike and Maximum put writing was seen at Nifty 10400 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• BATAINDIA (17%), APOLLOTYRE (15%), JETAIRWAYS (14%), CIPLA (14%) and PIDILITIND (9%) were top gainers in terms of open interest.
• KOTAKBANK (-10%), ESCORTS (-9%), SIEMENS (-9%), HEROMOTOCO (-8%) and BERGEPAINT (-7%) were top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 3.75, Advance (168) + Decline (47) + Unchanged (2) = 217
Derivative Idea (20-12-2017)
BEML gain around 6.40% of open interest as Long Build-up on Tuesday’s trade. BEML forming ABCD harmonic pattern on daily chart while is has already retraced 61.8% from top of 1954.50 and it as also formed the squat bar which shows possible reversal in BEML.
Now what to expect???
BEML has hurdle at 1600. Above 1600 it can touch 1700—1750 and then to 1830++ mark in days to come else could touch its support level of 1520.
Fresh selling can be initiated below 1520 only.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (20th Dec 2017)
Buy BEML above 1600 with stop loss of 1520 for the initial target 1700--1750 and then to 1830
VEDL- Top Pick
Price just got above its 50-day exponential moving average which is a positive signal. According to exponential moving average analysis, vedl is in an uptrend.
Now what to expect???
Above 318.50 will see rally till 330—335 in days to come. Further upside will see if closes above 335.
Support intact at 308
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (20th Dec 2017)
Buy VEDL above 318.50 with stop loss below 308 (on a closing basis) Target 330—335.
More Will Update Soon!!
