Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 12th Jan 2018
Nifty 10651 /Sensex 34503/ Bank Nifty 25660
24 Advances / 26 Declines/ 0 Unchanged
Benchmarks hit record closing high levels; Sensex surpasses 34,500 mark
Indian equity benchmarks ended the Thursday’s trade at record closing high levels, with frontline gauges surpassing their crucial 34,500 (Sensex) and 10,650 (Nifty) levels for the first time ever, as investors remained optimistic ahead of key corporate earnings later this week and the federal budget next month. Though, markets made cautious start and traded choppy in first half of the trade, as sentiments remained downbeat with rating agency Care Ratings’ latest report that uptrend in crude oil price is likely to have a major impact on India's fiscal position. Sentiments also remained dampened after a private poll showed that India’s retail inflation likely rose to a 17-month high in December, and that could push the central bank to tighten monetary policy. The December inflation data is due to be released on Friday, January 12. Traders also took note of a report which highlights that the Confederation of All India Traders’ (CAIT) has opposed Centre’s decision to allow 100% FDI in single brand retail via automatic route. CAIT has said that it is serious matter for small businesses and will hamper the welfare, upgradation and modernisation of existing retail trade.
Domestic bourses gained momentum in second half of the trade and hit their all time high levels with traders taking some support from global rating agency Moody’s latest report, which has said India and China remain the fastest growth economies in Asia Pacific region. Besides, the cabinet’s decision to allow foreign airlines to invest up to 49% in ailing Air India, and ease foreign direct investment (FDI) policies in some critical areas, including single-brand retail, broking services in construction, pharmaceuticals and power exchanges, too provided some strength to the markets.
Market participants also took some encouragement with Credit ratings agency, Crisil Ratings in its latest report stating that India Inc’s top-line (revenue) growth is likely to hit a five-year high of 9% in Q3 (October-December) 2017-18. However, it noted that profits will continue to contract, on the back of rising commodity prices.
On the global front, European markets were trading mostly in red in early deals, as concerns over protectionism and a bond market sell-off made the breakneck New Year rally in equities fizzle out. Asian markets ended mostly in red on report that that China may slow or halt purchases of US Treasuries.
Back home, stocks from real estate counters remained on buyers’ radar on private report that residential real estate market is slowly coming out of the shadow of demonetization woes as housing sales across top eight property markets for the quarter ended December have risen 28% from a year ago to 51,701 apartments. While this is an uptick compared to a lower base recorded during the demonetization quarter, the performance was also helped by the implementation of RERA and effective 10-15% price correction across key markets. Agri related stocks remained in focus, as the economists during an interactive session with Prime Minister Narendra Modi, organised by NITI Aayog suggested need to shift focus to increasing farmers’ income rather than increasing just production.
FII’s Activity 11th-Jan-18
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 3825.49 crore against gross selling of Rs 4217.15 crore. Thus, FIIs stood as net sellers of Rs 391.66 crore in equities.
In the debt segment, the gross purchase was of Rs 3474.46 crore with gross sales of Rs 3661.19 crore. Thus, FIIs stood as net sellers of Rs 186.73 crore in debt.
In the hybrid segment, the gross buying was of Rs 3.51 crore against gross selling of Rs 2.71 crore. Thus, FIIs stood as net buyers of Rs 0.80 crore in hybrid segment.
Now what to expect ??
Nifty Levels
Support at 10580 and Resistance at 10685
Above 10685 will see rally till 10750---10900 mark else could touch its support level of 10580 again
Trade with levels only
Bank Nifty
Support at 25500 and Resistance at 25780
Above 25780 will see rally till 26000---26300 mark else could touch its support level of 25500 again
Trade with levels only
Daily Derivative Outlook 12th January 2018
• Nifty (January) futures closed at a premium of 2.85 points versus a premium of 4.85 points.
• JINDALSTEL (19%), SHREECEM (17%), GRANULES (13%), MARICO (13%) and ZEEL (13%) were the top gainers in terms of open interest.
• RBLBANK (-21%), ARVIND (-8), GLENMARK (-6%), SIEMENS (-5%) and JETAIRWAYS (-5%) were the top losers in terms of open interest.
• Maximum call buying was seen at Nifty 10600 strike and maximum put writing was seen at Nifty 10600 strikes.
• Maximum positions are at 11000 CE and 10500 PE.
• The Nifty Put Call Ratio (PCR) finally stood at 1.48 for January month contract.
• Advance Decline ratio in F&O segment was at 1.29, Advance (121) + Decline (94) + Unchanged (2) = 217
Derivative Idea (12-01-2018)
PFC losses around 3.1% of open interest as short unwinding up on Thursday’s trade.
PFC has Hurdle at 129, Break and sustain above 129 will take it to 135--138 and then to 145++ days to come, further upside rally will see on close above 145 mark, else could touch its support level of 124.00 again.
Fresh selling can be initiated below 124
Current chart pattern and derivatives data suggest that we expect further panic in coming sessions.
Trading Recommendation (12th Jan 2018)
Buy PFC future above 129 with stop loss of 124 for the initial target 135—138 and then to 145 mark.
Castrol India- Top Pick
After showing bearish trend from past one month, Castrol India to show bullish type movement yesterday and closed the day with marginal profit of 03 points. Bottom out pattern seen in Castrol if unable to breach support level of 190 we can see sharp upside rally in it.
Oscillators like MACD & RSI showing positive divergence in it.
Now what to expect???
On Daily chart, Hurdle at 193 will see rally till 198---201 in weeks to come.
Support intact at 189.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (12th Jan 2018)
Buy Castrol India above 193 with stop loss below 189 (on a closing basis) Target 198—201.
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Infosys Limited
More Will Update Soon!!
