Update on Nifty levels, Bank Nifty levels, Derivative Outlook and Equity Pick of the day 8th Jan 2018
Nifty 10558 /Sensex 34153/ Bank Nifty 25601
31 Advances / 19 Declines/ 0 Unchanged
Bulls tighten grip on Dalal Street; Nifty surpasses 10,550 mark
Friday turned out to be a remarkable day of trade for Indian equity benchmarks where bulls tightened their grip on Dalal Street, with Nifty and Sensex hitting fresh record highs and ending above their crucial 10,550 and 34,150 levels, respectively for the first time ever. The markets’ mood remained up-beat throughout the day and benchmarks fervently gained from strength to strength, as investors continued hunt for fundamentally strong stocks. Sentiments remained up-beat throughout the session with NITI Aayog’s expectation that the first strategic disinvestment of Central Public Sector Enterprises will be conducted within the current financial year. It said that the process of divestment is being carried out by Department of Investment and Public Asset Management (DIPAM) and the first transactions are expected in the current financial year after a long gap of 14 years. Some support also came with the Union Cabinet approving the revised model concession agreement for public private partnership projects in major ports. The amendments were made in the MCA to attract more investments in the port sector and are expected to clear the hurdles created by some of the provisions in the current model concession agreement.
Some support also came with Finance Minister Arun Jaitley’s assurance that the positive impact of the government’s reform measures would get reflected in the medium to long term and noted that India is the only economy which could maintain a growth rate of 7-8 percent amid challenges like the country’s weak public sector banks (PSBs) and initial disturbance of demonetisation, Goods and Services Tax (GST). Meanwhile, traders’ focus shifts to third quarter earnings with Tata Consultancy Services (TCS) and Infosys scheduled to report their Q3 numbers next week, amid signs the economy is recovering after the withdrawal of high-denomination currency bills in late 2016 and the introduction of the GST last year.
Firm opening in European counters too aided sentiments with the British and Swiss benchmarks hitting records, propelled by optimism for a strengthening regional economy. Asian markets ended mostly in green, as US jobs data pointed to firm economic growth although the greenback was soft as the specter of benign inflation capped domestic bond yields. Japanese Economy Minister Toshimitsu Motegi said that the government had put policies in place needed for companies to raise wages.
Back home, the infra stocks remained on buyers’ radar after the government approved Rs 12,178 crore worth of infrastructure projects and an AIIMS in Bilaspur in Himachal Pradesh to be constructed at a cost of Rs 1,351crore. Shares of liquor companies rallied on BSE after GM Breweries reported a strong results for the third quarter ended December 2017 of current fiscal (Q3FY18). IT stocks exhibited mixed trend on report that the US is considering new regulations to prevent the extension of H-1B visas as part of president Donald Trump's 'Buy American, Hire American' initiative, a move which could hit tech firms and hundreds of thousands of Indian IT professionals.
FII’s Activity 5th-Jan-18
The FIIs as per Friday’s data were net buyers in equity and debt segments both, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 4677.83 crore against gross selling of Rs 4313.65 crore. Thus, FIIs stood as net buyers of Rs 364.18 crore in equities.
In the debt segment, the gross purchase was of Rs 720.71 crore with gross sales of Rs 441.07 crore. Thus, FIIs stood as net buyers of Rs 279.64 crore in debt.
In the hybrid segment, the gross buying was of Rs 0.62 crore against gross selling of Rs 3.78 crore. Thus, FIIs stood as net sellers of Rs 3.16 crore in hybrid segment.
Now what to expect ??
Nifty Levels
Support at 10400 and Resistance at 10600
Above 10600 will see rally till 10750---10900 mark else could touch its support level of 10400 again
Trade with levels only
Bank Nifty
Support at 25250 and Resistance at 25700
Above 25700 will see rally till 26000---26300 mark else could touch its support level of 25250 again
Trade with levels only
Daily Derivative Outlook 8th January 2018
• Nifty (January) futures closed at a premium of 14.35 points versus a premium of 21.40 points.
• UBL (45%), ARVIND (28%), RCOM (21%), ADANIPORTS (18%) and EQUITAS (15%) were the top gainers in terms of OI.
• JISLJALEQS (-12%), JINDALSTEL (-11), SAIL (-7%), ASHOKLEY (-7%) and CADILAHC (-7%) were the top losers in terms of OI.
• Maximum call writing was seen at Nifty 10600 strike and maximum put writing was seen at Nifty 10500 strikes.
• Maximum positions are at 11000 CE and 10400 PE.
• The Nifty Put Call Ratio (PCR) finally stood at 1.22 for January month contract.
• Advance Decline ratio in F&O segment was at 2.31, Advance (150) + Decline (65) + Unchanged (0) = 217
Derivative Idea (08-01-2018)
Castrol gains around 13.00% of open interest as long build up on Friday’s trade. Castrol took support at 61.8% retracement level and bounced back sharply while it formed squat bar on daily chart which indicates possible reversal and bottom for Castrol.
Now what to expect???
Castrol has hurdle at 198. Break and sustain above 198 will rally till 208—210 and then to 215+++ mark in days to come
Fresh selling can be initiated below 190
Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.
Trading Recommendation (08th Jan 2018)
Buy Castrol future above 198 with stop loss of 190 for the initial target 208—210 and then to 215 mark.
Arcotech- Top Pick
Arcotech operates out of its state of the art manufacturing facility located at Bawal, Haryana with a total installed capacity of 30,000 MTPA & has one of the largest capacities of Copper Based non-ferrous semis & is the only player to India to have all the 4 casting methods including DC casting, Continuous Casting, Mould Casting, and Up Casting with Confirming Lines at one location.
Arcotech has more than 150 OEM customers and is also registered with several Government of India Units in Defence, Mint and the Energy Sector.
Price just got above it's 20-day exponential moving average which is a positive signal.
According to exponential moving average analysis, arcotech is facing resistance at 58
Now what to expect???
On Daily chart, Arcotech above 58 will see rally till 65---70 in weeks to come.
Support intact at 52.
Any sharp downside panic will be buying opportunity in it.
Trading Recommendation (8th Jan 2018)
Buy Arcotech above 58 with stop loss below 52 (on a closing basis) Target 65—70.
More Will Update Soon!!
