Update on Nifty levels, Derivative Outlook and Equity Pick of the day 26th Dec 2017
Nifty 10493 /Sensex 33940/ Bank Nifty 25648
29 Advances / 20 Declines/ 1 Unchanged
Markets hit all time closing high ahead of Christmas
Friday turned out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges ending at all time high levels ahead of Christmas. Markets after an optimistic start traded with traction throughout the session and the Santa Claus rally in final hour of trade helped Nifty to hit 10,500 mark for brief period, but ended tad lower of that level. Sentiments remained up-beat with Reserve Bank of India in its latest edition of the Financial Stability Report enlightened that while the stress in the banking sector remains elevated, it appears to be bottoming out. Some support also came with Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that India is expected to be a $6.5-7 trillion economy by 2030, and at the current exchange rate it would touch $10 trillion by 2035-40. He said that India will be remarkably different country as the size of its economy will enhance the country's role in global affairs.
Markets continued jubilation in second half of trade as well with traders expecting a good budget and strong H2FY18 earnings. The street however shrugged off the IMF’s report that India’s financial sector is facing considerable challenges with high non-performing assets and slow deleveraging and repair of corporate balance sheets testing the resilience of the banking system and holding back growth. Separately, backed by improvement in major indicators, such as auto production, coal output and rail freight growth, credit rating agency, ICRA in its monthly review on Indian Economy, has said that the growth in the index of industrial production (IIP) is expected to rebound in November after hitting a three-month low of 2.2% in October this year.
On the global front, European markets were trading mostly in red in early deals red, as fresh political turmoil in Spain dampened markets’ sentiments and as trading volumes were expected to remain thin ahead of the Christmas holiday. Markets were jittery after a Catalan vote on Thursday resulted in a victory for separatists, sparking fresh concerns over political turmoil in Spain. Asian markets ended in green terrain, although trading volumes remained thin ahead of the Christmas weekend.
Back home, the 2G spectrum case related stocks remained buzzing after the special CBI court acquitted all 18 accused including A Raja and K Kanimozhi in 2G spectrum allocation case. Meanwhile, CRISIL report highlighted that warehousing cost for consumer durables and FMCG is likely to reduce by 25-50% mainly on the back of the implementation of the Goods and Services Tax (GST) regime even as states like Haryana and Assam are set to emerge as new hubs. Consequently, the number of warehouses for consumer durables company could reduce to 10-12 from a typical 25-30 and to 30-35 from 45-50 for FMCG companies.
FII’s Activity 22nd -Dec-17
The FIIs as per Friday’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 4817.18 crore against gross selling of Rs 6126.09 crore. Thus, FIIs stood as net sellers of Rs 1308.91 crore in equities.
In the debt segment, the gross purchase was of Rs 1462.13 crore with gross sales of Rs 1285.02 crore. Thus, FIIs stood as net buyers of Rs 177.11 crore in debt.
Now what to expect ??
Now what to expect ??
Nifty Levels
Above 10515 will se rally till 10550. More and more upside rally will see only close above 10550 else it could test its support level of 10350---10280 and again.
Trade with levels only
Daily Derivative Outlook 26th December 2017
• Nifty (Dec) futures closed at a premium of 12.45 points versus a premium of 22.15 points.
• Maximum call buying was seen at Nifty 10400 strike and maximum put buying was seen at Nifty 10500 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• PIDILITIND (22%), VGUARD (18%), MINDTREE (15%), OIL (13%) and RNAVAL (11%) were the top gainers in terms of open interest.
• DALMIABHA (-16%), WOCKPHARMA (-13%), TVSMOTOR (-10%), IFCI(-9%) and RCOM (-8%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 1.27, Advance (123) + Decline (91) + Unchanged (3) = 217
Derivative Idea (26-12-2017)
Granules losses around 0.6% of open interest as short unwinding Friday’s trade. Granules trading near its resistance level of 134.50
Now what to expect???
Granules has resistance at 134.50, above 134.50 it can touch 142--145 and then to 150+ mark in days to come else could touch its support level of 127.
Fresh selling can be initiated below 127.00 only.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (26-12-2017)
Buy Granules above 134.50 with stop loss of 127.00 for the initial target 142--145 and then to 150++
Escorts- Top Pick
According to bollinger bands, escorts has moved strongly towards upper band, which is a positive signal.
Exponential moving average analysis, escorts is in a strong uptrend
Now what to expect???
On Daily chart, Escorts above 750 will see rally till 770--785+++ in weeks to come.
Support intact at 730.
Any sharp upside rally will be selling opportunity in it.
Trading Recommendation (26th Dec 2017)
Buy Escorts above 750 with stop loss below 730 (on a closing basis) Target 770—785.
