Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 28th Dec 2017
Nifty 10490 /Sensex 33911/ Bank Nifty 25496
13 Advances / 37 Declines/ 0 Unchanged
Late hour sell-off drag benchmarks lower; Nifty slips below 10,500 mark
Indian equity benchmarks ended the lackluster day of trade in red terrain on Wednesday with frontline gauges ending below their crucial 34,000 (Sensex) and 10,500 (Nifty) levels. Selling which emerged in last leg of trade mainly played spoil sport for the markets and dragged the markets lower. Markets after a cautious start gained traction and traded in green terrain for most part of the day’s trade, as sentiments remained up-beat on report that the Securities and Exchange Board of India (SEBI) board will consider proposals to ease compliance norms for insolvent firms - especially with regard to trading, listing and de-listing, and declaring results-at its meeting on Thursday. Traders also took some encouragement with rating agency ICRA’s expectations that gross value added (GVA) growth to rise by 50 basis points in 2018-19 to 7 per cent, on the back of normal monsoon, a commitment towards fiscal consolidation at the Central and State level, and the commencement of broader efficiency gains related to Goods and Services Tax (GST). Some support also came from report that the State Bank of India’s Composite Index, an indicator of manufacturing activity that helps estimate periods of contraction and expansion, has showed that Indian manufacturing activity in December improved marginally over the previous month taken over a yearly period, while the index fell more sharply on a month-wise comparison, amid the worries of GST rollout weighing down the manufacturing sector.
However, sharp sell-off in dying hour of trade dragged key gauges lower, as traders opted to book profit with markets trading at all time high levels. Traders also remained concerned with GST collections slipping to their lowest in November as rates were cut on dozens of goods to make the new national sales tax regime more acceptable. Total collections under the GST in November slipped for the second straight month to Rs 80,808 crore, down from over Rs 83,000 crore in the previous month. Investors took note that Grant Thornton in its latest International Business Report (IBR) has said that business leaders in India remained largely positive, but their level of optimism has dropped to its lowest level in four years.
On the global front, European markets were trading mostly in green amid light trade across markets worldwide due to the holiday period. Asian markets ended mostly in green with investors indulging in some selective buying despite a lack of any big catalysts.
Back home, India looks set to leapfrog Britain and France next year to become the world’s fifth-largest economy in dollar terms. The report highlighted that despite temporary setbacks, India’s economy has still caught up with that of France and the UK and in 2018 will have overtaken them both to become the world’s fifth largest economy in dollar terms. On the sectoral front, select tech stocks remained under pressure following their global counter parts, while the energy stocks too lost shine on report of the spike in international crude prices. Sugar stocks remained under pressure in today’s trade on CRISIL’s report that Indian sugar industry is expected to witness a drop in margins due to an increase in cane cost coupled with higher production of sugar, expected to pull down the retail prices. In scrip specific development, Reliance Communications extended rally for the second straight session after the company yesterday announced its exit from the Reserve Bank of India’s Strategic Debt Restructuring (SDR) framework, with zero equity conversion and zero loan write-offs for lenders and bond holders.
FII’s Activity 27th-Dec-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 3605.63 crore against gross selling of Rs 2351.22 crore. Thus, FIIs stood as net buyers of Rs 1254.41 crore in equities.
In the debt segment, the gross purchase was of Rs 1680.77 crore with gross sales of Rs 1655.82 crore. Thus, FIIs stood as net buyers of Rs 24.95 crore in debt.
In the hybrid segment, there was no buying against gross selling of Rs 1.63 crore. Thus, FIIs stood as net sellers of Rs 1.63 crore.
Now what to expect ??
Nifty Levels
Below 10440 will see panic till 10350---10280.
More and more downside panic will see only close below 10280 else it could test its resistance level of 10550 again.
Trade with levels only
Bank Nifty
Below 25400 will see panic till 25250---25050
More and more downside panic will see only close below 25050 else it could test 25760 again.
Trade within a range
Daily Derivative Outlook 28th December 2017
• Nifty (December) futures closed at a premium of 9.45 points versus a discount of -5.55 points.
• Maximum call buying was seen at Nifty 10500 strike and maximum put buying was seen at Nifty 10400 strikes.
• Maximum positions are at 10600 CE and 10000 PE.
• RCOM (25%), MINDTREE (13%), LUPIN (12%), TORNTPHARM (12%) and ADANIPOWER (12%) were the top gainers in terms of open interest.
• MUTHOOTFIN (-18%), RELCAPITAL (-15%), PIDILITIND (-13%), INDIGO (-12%) and JETAIRWAYS (-11%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 0.43, Advance (65) + Decline (152) + Unchanged (0) = 217
Derivative Idea (28-12-2017)
GSFC gain around 1.1% of open interest as short build up on Wednesday’s trade. GSFC facing hurdle at 61.8% retracement level which stood at 154.00 if unable to breach its resistance level then we can expect sharp downside fall in it.
Now what to expect???
GSFC has support at 147.50. Below 147.50 it can touch 140---138 and then to 135 mark in days to come else could touch its resistance level of 154 again.
Fresh buying can be initiated above 154.00.
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (28th Dec 2017)
Sell GSFC below 147.50 with stop loss of 147.50 for the initial target 140--138 and then to 135
Power grid - Top Pick
According to simple moving average analysis, powergrid is in a strong downtrend
The 5 day average volume fell 999591 stocks, 10 day average volume fell 16016 stocks and 30 day average volume rose 1153 stocks as compared to the previous day.
Now what to expect???
On Daily chart, Power grid break and sustain below 201.50 will see panic till 198----196 in weeks to come.
Resistance intact at 205.
Trading Recommendation (28th Dec 2017)
Sell Power grid below 201.50 with stop loss above 205 (on a closing basis) Target 198—196.
More Will Update Soon!!
