Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 4th Dec 2017
Nifty 10121 /Sensex 32832/ Bank Nifty 25192
8 Advances / 42 Declines/ 0 Unchanged
Benchmarks crash like house of card; Sensex breaches 32,900 mark
Friday turned out to be a dismal day of trade for Indian equity benchmarks, where frontline gauges ending with a cut of around a percentage point on mixed economic data. Traders also remained on sideline ahead of Reserve Bank of India (RBI) Policy, Federal Reserve meet and Gujarat assembly elections. Markets started on optimistic note but soon gave up all their gains to enter into red terrain, as traders turned cautious after the eight core sectors grew at a slower pace of 4.7% in October, chiefly due to subdued performance of cement, steel and refinery segments. Market participants also remained a bit cautious with India’s fiscal deficit at the end of October hitting 96.1% of the budget target for 2017-18 on account of lower revenues and increase in expenditure. The fiscal deficit was 79.3 per cent in the same period last year.
Markets somehow managed to cap losses for most part of the day taking support from good Gross Domestic Product (GDP) numbers for the second quarter ended September. Reversing a five-quarter slide and setting itself on course for revival GDP rose 6.3% in the July-September period, compared with the three year low of 5.7% growth in the April-June quarter and 7.5% in the year earlier. Reacting to the GDP growth data, Finance Minister Arun Jaitley has said the impact of demonetization and GST is behind us and growth in coming quarters will be on upward trajectory. But, selloff in last leg of trade mainly dragged the markets below their crucial 32,900 (Sensex) and 10,150 (Nifty) levels. Sentiments remained dampened with chief statistician TCA Anant’s statement that the Goods and Services Tax (GST) regime, which kicked in from July 1, has posed fresh a new challenge for calculating India’s GDP. GST has consolidated a welter of local and central levies such as value added tax, excise and service tax into a single levy. Also, traders failed to draw any sense of relief with the Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, which rose to a 13-month high of 52.6 in November from October’s 50.3. It enlightened that growth in output and new orders picked up to the fastest since October 2016, reportedly supported by reductions in GST rates and stronger underlying demand conditions.
Weak opening in European counters too dampened sentiments, as euro zone factories posted their busiest month in over 17 years in November. Asian markets ended mixed, as investors awaited the US Senate’s vote on tax reform legislation. China’s manufacturing activity grew at the weakest pace in five months in November as input costs remained high and tougher pollution measures weighed on business confidence. The Caixin/Markit Manufacturing PMI dipped to 50.8 from 51.0 in October.
Back home, the RBI is meeting next week at a time of rising concern about a rally in crude prices, which rose following OPEC’s decision to extend production curbs. On the sectoral front, select auto stocks were buzzing in today’s trade on back of monthly auto sales number. Mixed reactions were witnessed in aviation stocks as aviation fuel price has been hiked by Rs 3,206 per kilolitre to Rs 57349 per kilolitre in Delhi.
FII’s Activity 1st-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 10125 will see more downside panic till 10080 mark. More and more downside panic will see only close below 10080 else it could test 10250---10320 again.
Bank Nifty
Below 25200 will see more downside panic till 25050---24900 mark else it could test its resistance level of 25500 again
Trade within a range
Daily Derivative Outlook 4th December 2017
• Nifty December 2017 futures closed at 10154.25 on Friday, at a premium of 32.45 points over spot closing of 10121.80.
• Maximum Call writing was seen at Nifty 10350 strike and Maximum Put writing was seen at Nifty 10350 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• ESCORTS (20.50%), JSWENERGY (12.65%), CUMMINS (12.63%), POWERGRID (11.64%) and KPIT (11.48%) were the top gainers in terms of open interest.
• BALKRISHNAINDUSTRIES (-21.50%), BANKBARODA (-8.30%), MGL (-7.10%), APOLLOHOSP (-6.00%) and BHARTIAIRTEL (-5.65%) were the top losers in terms of open interest.
Derivative Idea (04th Dec 2017)
Reliance gain around 3.22% of open interest as shot build up Friday’s trade. Reliance trading below its 21 DEMA which indicated downside momentum is certain in it while it has breached its short-term trend line too.
Now what to expect???
Support at 910 and Resistance at 940, Below 910 panic remain continue till 875—840.00 and then to 820 mark in days to come,
Fresh buying can be initiated above 940
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (4th Dec 2017)
Sell Reliance below 910 with stop loss of 940 for the initial target 875—840 and then to 820 mark.
ICICI Prudential Life Insurance - Top Pick
Yesterday ICICI Prudential Life Insurance shown more than 2.19% downside move
According to MACD analysis, icicipruli is technically weak..
Now what to expect??
Break and sustain below 368 will see panic till 354---350 in days to come. Further downside will see if closes below 350.
Resistance intact at 382
Any sharp upside rally will be selling opportunity in it.
Trading Recommendation (4th Dec 2017)
Sell ICICI Prudential Life Insurance below 368 with stop loss above 382 (on a closing basis) Target 354---350.
More Will Update Soon!!
