Update on Nifty levels, Derivative Outlook and Equity Pick of the day 22nd Dec 2017
Nifty 10440 /Sensex 33836/ Bank Nifty 25716
19 Advances / 31 Declines/ 0 Unchanged
Benchmarks witness consolidation; end with marginal losses
Extending their consolidation mood for second straight session, Indian equity benchmarks ended the choppy day of trade slightly in red amid weak global cues. Markets altered between green and red throughout the session and profit booking in dying hour of trade dragged markets tad below the neutral lines. Traders also remained concerned with the details of the minutes of the MPC meeting held on December 5 and 6 released by the Reserve Bank of India (RBI), where RBI Governor Urjit Patel flagged concerns over rising global oil prices and uncertainties on fiscal and external fronts. Two other members in the panel, Deputy Governor Viral Acharya and Executive Director Michael Debabrata Patra, flagged the issue of inflation in petroleum products. Sentiments also remained down-beat with private report stating the RBI’s policy rates are likely to remain unchanged in 2018 despite higher inflation, a recovering growth, and elevated oil prices.
Meanwhile, the special CBI court pronounce the judgment in the 2G scam, which rocked the telecom sector some years ago and played a major part in cementing the UPA government’s reputation of being corrupt. The court acquitted all accuses including former telecom minister A Raja acquitted in 2G case. However, losses remained capped with traders getting some solace with the Union Cabinet approving the Consumer Protection Bill, 2017, paving the way for its introduction in Parliament. Once approved by Parliament, the new law will replace the current Consumer Protection Act, 1986. Some support also came with Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that India is expected to be a $6.5-7 trillion economy by 2030, and at the current exchange rate it would touch $10 trillion by 2035-40.
On the global front, European markets were trading mostly in red as investors focused on a highly-anticipated vote in Catalonia. Catalonia voters were set to go to the polls on Thursday for a regional election following weeks of political uncertainty. Asian markets exhibited mixed trend after US equities dipped in the wake of congressional passage of US tax cuts, which was already priced in. The Bank of Japan kept monetary policy steady despite growing signs of strength in the economy, signaling that it was in no rush to edge away from crisis-mode stimulus with inflation still distant from its 2 percent target.
Back home, broader indices outperformed benchmarks and ended with a gain of around a percent on Thursday. Meanwhile, textile stocks remained on buyers’ radar, as the Cabinet Committee on Economic Affairs has approved the scheme for Capacity Building in Textile Sector (SCBTS). The scheme will be applicable from 2017-2018 to 2019-2020 with an outlay of Rs 1,300 crore. However, public sector banks remained under pressure after the finance ministry yesterday said that it has not provided the entire amount towards capital infusion in public sector banks as most of them failed to meet the performance target. As part of Indradhanush Plan to revitalize state-owned lenders, the government had proposed to infuse Rs 70,000 crore out of Budgetary Allocations in them.
FII’s Activity 21st -Dec-17
The FIIs as per Thursday’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 4844.47 crore against gross selling of Rs 6290.73 crore. Thus, FIIs stood as net sellers of Rs 1446.26 crore in equities.
In the debt segment, the gross purchase was of Rs 914.44 crore with gross sales of Rs 1194.64 crore. Thus, FIIs stood as net sellers of Rs 280.20 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 its support level of 10350 and then to 10200---10050 again.
Trade within a range
Daily Derivative Outlook 22nd December 2017
• Nifty (Dec) futures closed at a premium of 22.15 points versus a premium of 25.95 points.
• Maximum call writing was seen at Nifty 10400 strike and maximum put buying was seen at Nifty 10300 strikes.
• Maximum positions are at 10500 CE and 10000 PE.
• M&M (103%), BALKRISHIND (96%), CASTROLIND (91%), WOCKPHARMA (32%) and MOTHERSUMI (31%) were the top gainers in terms of open interest.
• APOLLOHOSP (-24%), INDIACEM (-9%), MUTHOOTFIN (-7%), CUMMINSIND (-7%) and RAMCOCEM (-7%) were the top losers in terms of open interest.
• Advance Decline ratio in F&O segment was at 1.27, Advance (136) + Decline (79) + Unchanged (2) = 217
Derivative Idea (22-12-2017)
Havells gain around 14.40% of open interest as short Build-up on Thursday’s trade. Havells unable to breach its major resistance level of 563.00 and slipped.
Now what to expect??
Havells has support at 549, below 549 it can touch 535—530 and then to 515 mark in days to come else could touch its resistance level of 563.
Fresh buying can be initiated above 563 only.
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (22nd Dec 2017)
Sell Havells below 549 with stop loss of 563 for the initial target 535—530 and then to 515.
Take Solutions Ltd- Top Pick
Take solution has been trading in a broader range of 149---167 for few weeks and also price just got above its 50-day simple moving average which is a positive signal
Now what to expect???
On Daily chart, take solution is having bottom out point above 168.
Break and sustain above 168 will see nonstop rally till 178--185+++ in weeks to come.
Support intact at 158.
Any sharp upside rally will be selling opportunity in it.
Trading Recommendation (22nd Dec 2017)
Buy Take Solutions above 168 with stop loss below 158 (on a closing basis) Target 178—185.
More Will Update Soon!!
