Update on Nifty levels, Derivative Outlook and Equity Pick of the day 21st Dec 2017
Nifty 10444 /Sensex 33777/ Bank Nifty 25591
26 Advances / 24 Declines/ 0 Unchanged
Benchmarks snap four days gaining streak; end with marginal losses
Snapping four days gaining streak, Indian equity benchmarks ended the choppy day of trade slightly in red, as traders opted to book profit near all time high levels. After making cautious start, markets gained some traction and entered into green terrain to trade above neutral lines for most part of the day with traders getting some support from Commerce & Industry Minister Suresh Prabhu’s statement that the government is working on a strategy to boost share of services in total exports from the country. He said ‘In my opinion services should be one of the most critical drivers of the growing economy and must be brought to the forefront’. Prime Minister Narendra Modi’s electoral victories in key states continued to lend support to the markets, but focus has now shifted to Budget and macros.
However, sharp selling in last leg of trade played spoil sports for the local bourses and dragged them back into red terrain. Sentiments turned down-beat after Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly survey has said that manufacturing sector outlook is slightly less optimistic in third quarter of the current fiscal year (Q3). It reported that overall the capacity utilization in manufacturing remains low. The average capacity utilization for the manufacturing sector is about 75% for Q-2 2017-18 as reported in the survey which is similar to that of Q-1 2017-18. Meanwhile, some caution set in ahead of the release of the minutes from the Reserve Bank of India’s policy meeting earlier this month in which the policy rate was kept unchanged.
Weak opening in European counters too dampened sentiments, with traders’ volumes remained thin ahead of the Christmas holiday. German exports and imports will hit record highs in 2018, the BGA trade association said, adding that companies in Europe’s largest economy will continue to reap benefits of a recovery in the United States, the European Union and China. Asian markets exhibited mixed trend on Wednesday amid cautious trades following the negative lead overnight from Wall Street and as investors awaited the final votes on the US tax reform bill.
Back home, PSU banking stocks edged lower despite global rating agency Moody’s latest report highlighting that capital raising by a number of public sector banks (PSBs), including PNB and UBI, is credit positive because it will help improve their loss-absorbing buffers. Moody's said that it signals improved access to the equity capital markets and will reduce PSBs' dependence on fund infusion from the government. Stocks of select cement companies edged lower after India Ratings and Research (Ind-Ra) in its latest report has said that the operating profits of cement companies in India, which use a high proportion of pet coke, may fall by around one percent, following the government’s decision to hike the import duty on petcoke from the current 2.5 percent to 10 percent. However, oil companies stocks remained buzzing, as the Finance minister Arun Jaitley said that the Centre favours including petroleum products in the ambit of the Goods and Services Tax (GST) but it would want a consensus with the States before taking such a step.
FII’s Activity 20th-Dec-17
The FIIs as per Wednesday’s data were net sellers in equity and debt segments both, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 7152.33 crore against gross selling of Rs 8428.53 crore. Thus, FIIs stood as net sellers of Rs 1276.20 crore in equities.
In the debt segment, the gross purchase was of Rs 1092.56 crore with gross sales of Rs 1870.86 crore. Thus, FIIs stood as net sellers of Rs 778.30 crore in debt.
Now what to expect ??
Nifty Levels
(Nifty Spot) 10500 act as major hurdle. Fresh buying will do only close above 10500 mark.
Weekly close above 10500 will see sharp upside rally in days to come else it could test it's support level of 10350 and then to 10200---10050 again.
Trade within a range
Daily Derivative Outlook 21st December 2017
• Nifty (Dec) futures closed at a premium of 25.95 points versus a premium of 7.75 points.
• Maximum call buying was seen at Nifty 10400 strike and Maximum put writing was seen at Nifty 10500 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• RAMCOCEM (117%), PNB (30%), DLF (15%), CHOLAFIN (15%) and DLF (15%) were the top gainers in terms of OI.
• JETAIRWAYS (-13%), REPCOHOME (-11%), HEROMOTOCO (-10%), TV18BRDCST (-9%) and PAGEIND (-7%) were the top losers in terms of OI.
• Advance Decline ratio in F&O segment was at 1.44, Advance (128) + Decline (89) + Unchanged (0) = 217
Derivative Idea (21-12-2017)
PVR gain around 6.40% of open interest as Long Build-up on Wednesday’s trade.
Now what to expect???
PVR has hurdle at 1455. Above 1455 it can touch 1480--1500 and then to 1530++ mark in days to come else could touch its support level of 1420.
Fresh selling can be initiated below 1420 only.
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (21st Dec 2017)
Buy PVR above 1455 with stop loss of 1420 for the initial target 1480--1500 and then to 1530+++ .
India Cement- Top Pick
Price just got above it's 200-day & 50-day exponential moving average which is a positive signal for india cement
Now what to expect???
On Daily chart, india cement is showing breakout point above 180 level. Break and sustain above 180 will see nonstop rally till 190---195+++ mark in days to come.
Support intact at 170
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (21st Dec 2017)
Buy India cement above 180 with stop loss below 170 (on a closing basis) Target 190---195.
Corporate Action-Ex-date
Mahindra & Mahindra Limited-Bonus 1:1
Castrol India Limited-Bonus 1:1
Balkrishna Industries Limited-Bonus 1:1
All Bihar villages will be electrified before 2018, says Sushil Kumar Modi
Bihar Deputy Chief Minister Sushil Kumar Modi on Tuesday said all the villages of the state would be electrified by the end of this month.
"Now, there will be no problem of power connection in any village of the state as all the villages will be electrified by December 27," he said.
Modi added that by May 2018, electricity would reach 10,000 human habitations ("tola") and not a single of these habitations would remain without electricity.
(http://www.business-standard.com/article/economy-policy/all-bihar-villages-will-be-electrified-before-2018-says-sushil-kumar-modi-117122000213_1.html)
Congress Sends Trump Tax-Cut Bill in First GOP Legislative Win
House Republicans passed the most extensive rewrite of the U.S. tax code in more than 30 years -- hours after the Senate passed the legislation -- handing President Donald Trump his first major legislative victory.
The chamber’s 224-201 party line vote on Wednesday -- a redo thanks to a procedural hiccup -- sent a bill to the president that provides a deep, permanent tax cut for corporations and shorter-term relief for individuals. Not a single Democrat in either chamber voted for the measure.
The legislation, which has scored poorly in public opinion polls, promises to become one of the biggest issues in the 2018 elections that will determine whether the GOP retains its majorities in Congress.
(https://www.bloombergquint.com/politics/2017/12/20/senate-sends-gop-s-1-5-trillion-tax-cut-to-house-for-final-vote)
More Will Update Soon!!
