Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 8th Dec 2017
Nifty 10166 /Sensex 32597/ Bank Nifty 24851
43 Advances / 7 Declines/ 0 Unchanged
Bulls back on Dalal Street; Sensex reclaims 32,900 mark
Bulls made comeback on Dalal Street on Thursday with frontline gauges garnering gains of over a percentage point, recapturing their crucial 32,900 (Sensex) and 10,150 (Nifty) bastions, as traders opted to buy beaten down but fundamentally strong stocks after two days of continuous drubbing. The markets' mood remained up-beat throughout the day and benchmarks fervently gained from strength to strength with traders taking encouragement with former Reserve Bank of India Governor YV Reddy's statement that amid uncertainties in the global economic order, a sense of optimism about the future is more in India than in other parts of the world. Meanwhile, at a meeting with Finance Minister Arun Jaitley in the run-up to the last full-year Budget of the NDA government before 2019 general elections, India Inc. has sought lower tax and more incentives for investments while exporters called for quicker GST refunds. Some support also come with International Energy Agency's (IEA) latest report stating that India is among bright spots in the global economy and is emerging as a major driving force in global energy trends, with all modern fuels and technologies playing a part.
Markets extended rally in second half of trade to end near intraday highs on report that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) surged to Rs 1.31 lakh crore at the end of October, after hitting an over eight- year low in the month of September. Total value of P-note investments in Indian markets including equity, debt and derivatives, at October-end climbed to Rs 131,006 crore, from Rs 122,684 crore at the end of September. Separately, a foreign brokerage report enlightened that the country’s economic growth is expected to continue with a shallow recovery next year, and is likely to inch up to 7.2% in 2018-19 from an estimated 6.5% in the current fiscal. The report added that economic recovery will continue to be driven by consumption, supported by a pre-poll step up in public spend rather than investment, given the persistence of surplus capacity and tight 3.2% of GDP fiscal deficit target.
Firm opening in European counters too aided sentiments, as investors digested merger and acquisition news and awaited further details on progress towards US tax reform. On the economic front, the French current account deficit narrowed to 2.2 billion euros in October from 3.3 billion euros in September. However, Asian markets ended mostly in red, as the dollar inched up against the yen and oil eked out small gains.
Back home, all eyes will now be on the forthcoming elections in Gujarat where various opinion polls suggest the ruling BJP and the Opposition party Congress are in a neck-to-neck race. The outcome may have implications on the government policies ahead. Shares of rice producers like LT Foods, Kohinoor Foods and Chaman Lal Setia Exports rallied on back of heavy volumes on report that exports of rice rose by over 30% in dollar terms and 25% in rupee terms during April-September as European buyers built inventories in anticipation of tighter quality tests effective November 1.
FII’s Activity 7th-Dec-17
The FIIs as per Wednesday’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 3752.07 crore against gross selling of Rs 5155.17 crore. Thus, FIIs stood as net sellers of Rs 1403.10 crore in equities.
In the debt segment, the gross purchase was of Rs 1892.57 crore with gross sales of Rs 743.39 crore. Thus, FIIs stood as net buyers of Rs 1149.18 crore in debt.
Now what to expect ??
Nifty Levels
Above 10220 will see more upside rally till 10260--10350 mark. More and more upside rally will see only close above 10350 else it could test 10050---10000 again.
Trade within a range
Bank Nifty
Above 25240 will see more upside rally till 25370--25500 mark.
More and more upside rally will see only close above 25500 else it could test 24880---24700 again.
Trade within a range
Daily Derivative Outlook 8th December 2017
• Nifty (Dec) futures closed at a premium of 36.25 points versus a premium of 24.55 points.
• Maximum call buying was seen at Nifty 10200 strike and Maximum Put writing was seen at Nifty 10000 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• JUBLFOOD (16%), HEXAWARE (15%), GAIL (13%), IDEA (13%) and JETAIRWAYS (11%) were the top gainers in terms of open interest.
• BALKRISIND (-11%), MCX (-9%), PIDILITIND (-6%), SIEMENS (-4%) and INFIBEAM (-4%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 1.13, Advance (201) + Decline (16) + Unchanged (0) = 217
Derivative Idea (08-12-2017)
ICICI Bank gain around 2.10% of open interest as long build up Thursday’s trade. ICICI bank formed a squat bar on daily chart. The Squat Bar pattern is bullish during downtrend (which appear to be the case of with ICICI bank) it then signifies that the momentum may be shifting from bears to the bulls.
Now what to expect??
Hurdle at 308.50, Break and sustain above 308 will take it to 320—325++ mark.
Support intact at 299.50.
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (08-12-2017)
Buy ICICI bank above 308.50 with stop loss of 299.50 for the initial target 320—325++ mark.
Ashok Leyland - Top Pick
Yesterday Ashok Leyland shown more than 2.56% upside move
According to MACD analysis, a bullish crossover just happened and it's a positive signal for ashok Leyland.
After being range and trading in a declining trend for the past two week, the stock has shown signs of Bullish.
Now what to expect???
Break and sustain above 118 will see rally till 121--123 in days to come. Further upside will see if closes above 123.
Support intact at 115
Any sharp upside rally will be selling opportunity in it.
Trading Recommendation (8th Dec 2017)
Buy Ashok Leyland above 118 with stop loss below 115 (on a closing basis) Target 121—123.
