Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 1st Jan 2018
Nifty 10530/Sensex 34056/ Bank Nifty 25539
32 Advances / 18 Declines/ 0 Unchanged
Benchmarks bid adieu to the year 2017 on optimistic noteIndian equity benchmarks ended the final session of Calendar Year (CY) 2017 on strong note and frontline gauges settled at all time closing high levels, surpassing their crucial 10,500 (Nifty) and 34,000 (Sensex) levels. The markets’ mood remained up-beat throughout the day and benchmarks, after a positive start, fervently gained from strength to strength to end near all time high levels, as investors continued hunt for fundamentally strong stocks. Traders remained encouraged with Securities and Exchange Board of India’s (SEBI) decision to relax entry norms for Foreign Portfolio Investors (FPIs) willing to invest in the Indian markets. Besides, the markets regulator would allow listing of security receipts issued by an asset reconstruction company (ARC) on stock exchange platform. Some support also came with Union Minister Nitin Gadkari’s statement that the government is working on a policy to bring down the annual oil import bill by $100 billion by 2030 through extensive use of methanol in cooking gas and transportation fuel. The minster added that the government is shortly going to implement a scheme under which 15 percent methanol will be blended with petrol and which will reduce the cost of the fuel by 10 percent.
Traders shrugged off study report of the industry body Assocham, which has said that a slowdown in the economy coupled with high stress level in the banking sector is expected to restrict credit growth at around 8 percent during the current fiscal despite government’s thrust on loan expansion. Traders also ignored rating agency ICRA’s statement that rising commodity prices, especially that of crude oil that has hit a three-year peak last week, will double current account deficit (CAD) to $39 billion or 1.5 percent of GDP this fiscal year. Market participants also paid no heed towards Finance minister Arun Jaitley’s statement that the direct tax collection stood at Rs 6.48 lakh crore up to December 18, which is below the Budget estimates of Rs 9.8 lakh crore. Indirect tax collection (excluding GST collection) was at Rs 3.66 crore and the same including GST collection at Rs 7.3 lakh crore, which is below the Budget estimates of Rs 9.27 lakh crore.
On the global front, European markets were trading mostly in red on the final trading day of the year, but were set to record their strongest year of gains since 2013 thanks to a surge among tech stocks and a robust resources sector. Asian markets ended mostly in green on Friday. Though, Japan’s Nikkei share average ended slightly lower, but the index still gained nearly 20 percent in 2017.
Back home, telecom stocks rang loud on the bourses, especially Anil Ambani's debt-laden Reliance Communications, as the company signed an agreement to sell its wireless assets to Reliance Jio Infocomm, the telecoms arm of elder brother Mukesh Ambani's Reliance Industries. Pharma stocks edged higher after credit rating agency, Crisil in its latest report has said that the sector would log in a 9% revenue growth over the next three years ending 2020. It said the industry is expected to witness better revenue growth in the near term with healthy cash flows, on the back of robust domestic demand and rising need for complex products in the West.
Finally, the BSE Sensex surged 208.80 points or 0.62% to 34,056.83, while the CNX Nifty was up by 52.80 points or 0.50% to 10,530.70.
FII’s Activity 29th-Dec-17
The FIIs as per Friday’s data were net buyers in equity segment, while they were net sellers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 5527.12 crore against gross selling of Rs 4666.78 crore. Thus, FIIs stood as net buyers of Rs 860.34 crore in equities.
In the debt segment, the gross purchase was of Rs 488.37 crore with gross sales of Rs 609.68 crore. Thus, FIIs stood as net sellers of Rs 121.31 crore in debt.
In the hybrid segment, the gross buying was of Rs 10.88 crore against gross selling of Rs 17.92 crore. Thus, FIIs stood as net sellers of Rs 7.04 crore in hybrid segment.
Now what to expect ??
Nifty Levels
above 10570 will see rally till 10660---10715 else it could test its support level of 10350---10280 again.
Trade with levels only
Bank Nifty
Above 25800 will see rally till 26000---26300 else it could support test 25200 again.
Trade within a range
Daily Derivative Outlook 1st January 2018
• Nifty (January) futures closed at a premium of 26.20 points versus a premium of 40 points.
• HDIL (47%), RCOM (38%), JPASSOCIAT (27%), WOCKPHARMA (22%) and DLF (16%) were the top gainers in terms of open interest.
• BALKRISIND (-7%), MINDTREE (-7%), INFIBEAM (-6%), ESCORTS (-4%) and AJANTPHARM (-4%) were the top losers in terms of open interest.
• Maximum call writing was seen at Nifty 11200 strike and maximum put writing was seen at Nifty 10300 strikes.
• Maximum positions are at 11000 CE and 10300 PE.
• Advance Decline ratio in F&O segment was at 1.97, Advance (144) + Decline (73) + Unchanged (0) = 217
Derivative Idea (01-01-2018)
Grasim losses around 1.50% of open interest as short unwinding on Friday’s trade. Grasim Trading above its resistance level of 1155 level while RSI and MACD showing upside momentum in it.
Now what to expect???
Grasim has minor resistance at 1175 above 1175 it can touch 1200—1220++ mark in days to come else could touch its support level of 1150 again.
Fresh selling can be initiated below 1150
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (01st Jan 2018)
Buy Grasim above 1175 with stop loss of 1150 for the initial target 1200—1220++ mark
Aarti Industries - Top Pick
We are giving buy into it due to Rebound in its specialty chemicals dispatches partly instigated by resurrection in agrochemical industry and ramp up of Nitro toluene capacity next fiscal would help earnings surge by some 17%. Also simple moving average analysis showing a strong uptrend in Aart industries.
Now what to expect???
On Daily chart, Aarti Industries is having breakout point above 1160 will see rally till 1250++ in weeks to come.
Support intact at 1080.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (1st Jan 2018)
Buy Aarti Industries above 1160 with stop loss below 1080 (on a closing basis) for the upside target of 1250.
More will update soon...
