Update on Nifty levels, Derivative Outlook and Equity Pick of the day 12th Dec 2017
Nifty 10322 /Sensex 32597/ Bank Nifty 24851
33 Advances / 17 Declines/ 0 Unchanged
Benchmarks extend northward journey for third straight session
Indian equity benchmarks extended their rally for third straight day and went home with a gain of over half a percent, recapturing their crucial 33,400 (Sensex) and 10,300 (Nifty) levels. Sentiments remained up-beat throughout the session with markets making a gap-up opening after CII’s Business Confidence Index climbed to 59.7 during October-December 2017, against 58.3 in the previous quarter, as reform measures such as the Goods and Services Tax (GST) instilled optimism in India Inc. Traders also took some encouragement with statement of the prime minister’s economic advisory panel member Rathin Roy who has expressed hope that the forthcoming budget will not be a 'populist' and will reflect the commitment of the government to improve quality of expenditure. Meanwhile, industry body Assocham has said that the government needs to accord top priority to agriculture in the budget as a major shortfall in kharif production resulted in sluggish growth of farm sector in the second quarter this fiscal.
Markets accelerated speed in last leg of trade to end near intraday high levels after former Reserve Bank Governor Y V Reddy said that Indian economy may require two more years to consolidate and it should aim to go back to 7.5-8 percent growth in two years. Some support also came with the Bihar Deputy Chief Minister Sushil Modi’s statement that the Goods and Services Tax (GST) Council would examine the possibility of merging the 12 and 18 percent tax rates to a new slab. He added that more than 90 percent of issues related to tax rates have been resolved after the Council brought down 178 items from higher rates to lower one. Besides, report that Direct Tax collections, which comprise personal income and corporate tax, surged 14.4 percent to Rs 4.8 lakh crore in the first eight months ending November 2017, mainly on account of income tax mop-up from individuals, too aided sentiments.
Firm opening in European counters too supported sentiments with CAC, DAX and FTSE trading in green ahead of the meeting of European Union leaders on Thursday and Friday. Asian markets ended mostly in green after data showed that the US economy created more jobs than expected last month.
Back home, some support also came with Union Finance Minister Arun Jaitley’s statement that Indian economy is set for a higher growth trajectory on the back of a slew of structural reforms. Demonetization and GST were carried out keeping in mind their long-term benefits to the economy. On the sectoral front, auto sector stocks remained in top gear after data released by the Society of Indian Automobile Manufacturers (SIAM) showed that domestic car sales were up 4.49 per cent to 1,81,395 units as against 1,73,607 units in November last year. Motorcycle sales last month rose 23.25 per cent to 9,59,122 units as against 7,78,173 units a year earlier. Telecom stocks showed mixed reaction on ICRA report which enlightened that the telecom industry could pare as much as Rs 90,000 crore debt if stake sale deals of mobile tower assets, currently being discussed, materialize. It predicted structural and material changes for the telecom tower industry in the medium term. The agency also anticipated some headwinds in the short term, as consolidation of telecom operators leads to rationalization of tenancies, but remained confident about the growth prospects in coming years.
FII’s Activity 11th-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 4555.51 crore against gross selling of Rs 5518.33 crore. Thus, FIIs stood as net sellers of Rs 962.82 crore in equities.
In the debt segment, the gross purchase was of Rs 1298.50 crore with gross sales of Rs 963.57 crore. Thus, FIIs stood as net buyers of Rs 334.93 crore in debt.
Now what to expect ??
Nifty Levels
Above 10370 will see rally till 10430. Two consecutive close above 10370 will take to 10600---10700+++ mark in days to come.
Support intact at 10200---10050
Daily Derivative Outlook 12th December 2017
• Nifty (Dec) futures closed at a premium of 24.15 points versus a premium of 26.00 points.
• Maximum call buying was seen at Nifty 10300 strike and Maximum Put writing was seen at Nifty 10100 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• ARVIND (24%), WOCKPHARMA (22%), NBCC (14%), BANKINDIA (10%) and CADILAHC (9%) were the top gainers in terms of open interest.
• MINDTREE (-8%), PIDILITIND (-8%), PCJEWELLER (-7%), BALKRISIND (-6%) and JETAIRWAYS (-6%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 1.29, Advance (121) + Decline (94) + Unchanged (2) = 217
Derivative Idea (12-12-2017)
Reliance Infra gain around 0.53% of open interest as long build up Monday’s trade. Reliance Infra formed a Symmetrical Triangle on daily chart having breakout point at 465, while it is trading above 21 DEMA which indicate momentum is upward.
Now what to expect??
Hurdle at 465, Break and sustain above 465 will take it to 495--500 mark.
Support intact at 445
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (12th Dec 2017)
Buy Reliance infra above 465 with stop loss of 445 for the initial target 495--500 mark.
HCL Technologies - Top Pick
Yesterday HCL Technologies shown more than 1.18% upside move
Price just got above its 50-day exponential moving average which is a positive signal. According to exponential moving average analysis, hcltech is in an uptrend.
Now what to expect??
Above 882 will see rally till 891--895 in days to come. Further upside will see if closes above 895.
Support intact at 872
Any sharp upside rally will be selling opportunity in it.
Trading Recommendation (12th Dec 2017)
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Buy HCL Technologies above 882 with stop loss below 872
(on a closing basis) Target 891—895.
More Will Update Soon!!
