Update on Nifty levels and Derivative Outlook along with Equity Pick of the day 29th Aug 2017

Nifty 9912 /Sensex 31750/ Bank Nifty 24377

35 Advances / 16 Declines/ 0 Unchanged

Benchmarks extend gaining streak for fourth straight session

Extending northward journey for fourth straight day, Indian equity benchmarks ended the session with a gain of around half a percent, recapturing their crucial 9,900 (Nifty) and 31,700 (Sensex) levels. Sentiments remained jubilant through the session and key gauges after a gap-up opening traded in fine fettle. Sentiments remained up-beat since morning with industry body Assocham’s statement that biometric cards have facilitated disbursement of as much as Rs 83,184 crore to beneficiaries of Direct Benefit Transfer (DBT) schemes without the notorious leakages of the past. Traders also took some encouragement with Finance Minister Arun Jaitley’s statement that the Pradhan Mantri Jan Dhan Yojana and the related Jan Dhan- Aadhaar and Mobile number (JAM) trinity has the potential to link all Indians into one common financial, economic, and digital space.

Adding to the optimism, Niti Aayog said that India has good prospects of achieving over 8 percent growth within 2-3 years and the chances of massive cut in the poverty rate in the upcoming decade are excellent. Meanwhile, a private poll enlightened that India’s economic growth likely accelerated to 6.6 percent in the quarter just ended, but analysts are sounding increasingly worried that confusion over a new goods and services tax will dampen activity in coming months.

However, markets lost some of their gains in second half of the trade to end off day’s highs, as European shares fell in a broad sell-off as the euro strengthened after ECB chief Mario Draghi did not express concern about a strong currency in a closely watched speech. Asian markets closed mixed. China’s factories likely posted another solid month of growth in August, suggesting the world’s second-largest economy is still growing at a healthy clip despite rising financing costs and a cooling housing market.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Report that Nandan Nilekani returned to Infosys as non-executive chairman, promising to bring back stability to the beleaguered company following the exit of Vishal Sikka as CEO, too aided sentiments. On the sectoral front, banking stocks remained buzzing as the government notified the Banking Regulation (Amendment) Act under which it can authorize the RBI to issue directions to banks to initiate insolvency resolution process to recover bad loans. The banking sector is saddled with non-performing assets (NPAs) of over Rs 8 lakh crore, of which Rs 6 lakh crore is with PSBs. Separately, as per report the finance ministry is open to providing capital support for facilitating consolidation among state-owned banks, which are reeling under mounting bad loans.

FII’s Activity 28-Aug-17

The FIIs as per Monday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.

In equity segment, the gross buying was of Rs 4294.49 crore against gross selling of Rs 4851.47 crore. Thus, FIIs stood as net sellers of Rs 556.98 crore in equities.

In the debt segment, the gross purchase was of Rs 886.50 crore with gross sales of Rs 330.49 crore. Thus, FIIs stood as net buyers of Rs 556.01 crore in debt.

Now what to expect??

Nifty Levels 

Nifty future... Support at 9850 and resistance at 9940.

Close above 9940 will see more upside rally till 9980---10050 and then to 10170 mark else it could test it's support again. 

Close below 9850 will take to 9820---9780 and then to 9700 marks

Trade with levels only

Daily Derivative Outlook 29th August 2017

• Nifty August 2017 futures closed at 9917.05 on Monday at a premium of 4.25 points over spot closing of 9912.80.

• Maximum call writing seen at 9950, Maximum put writing seen at 9900 and maximum option buying (unwinding by option writers) was seen at 9700 PE and 9800 CE strike.

• Maximum positions are at 10000 CE and 9800 PE. 

• Long Build Up:  NESTLEIND (39.9%), L&TFH (16.6%), ADANIENT (9.1%), ADANIPOWER (7.3%) and CESC (9%).

• Short Build Up: PCJEWELLER (7.9%), POWERGRID (7.2%), FORTIS (4.7%), DRREDDY (4.6%) and CASTROLIND (2.9%).

• The Nifty Put Call Ratio (PCR) finally stood at 1.05 for August month contract.

• Advance Decline ratio in F&O segment was at 1.49, Advance (170) + Decline (49) + Unchanged (0) = 219 

Derivative Idea (29-08-2017)

Adani Power gain around 7.3% of open interest as long build up on Monday’s trade. It has also breached its immediate resistance level on the upper side with noticeable rise in volumes.

Now what to expect??

Break and sustain above 30.50 will take it to 33—35 and then to 38++ mark in days to come.

Support and stop loss above 27.50

Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.

Trading Recommendation(29-Aug-17)

Buy Adani Power (AUG) future or cash above 30.50 Stop loss 27.50(on closing basis) Target 33--35 and then to 38+++

Rallis India--- Top Pick

Recently, the stock price of Rallis India Ltd. (Rallis India) corrected by ~12% from 52-week high of Rs.265 as the company has reported muted performance on standalone basis in the recent quarters. 

With market leader in the crop protection domestically, good monsoon is likely to result in robust farm production, own captive research team, government’s vision to double farm income by 2022 and developing its facility at Dahej SEZ dedicated for export.

Now what to expect ??

Rallis India above 236 will see upside rally 

 246---252+++ mark in weeks to come. 

Looks bearish only if close below 228 marks.

Any sharp downside panic will be buying opportunity in it.

Trading Recommendation (29th August 2017)

Buy Rallis India above 236 with stop loss of 228 (on a closing basis) Target 246---252+++

More will Update Soon!!

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Update on Nifty levels and Derivative Outlook along with Equity Pick of the day 24th Aug 2017

                        

Nifty 9852 /Sensex 31568/ Bank Nifty 24316

36 Advances / 15 Declines/ 0 Unchanged

Benchmarks extend gains for second day; Nifty reclaims 9,850 mark

Wednesday turned out to be a fabulous day of trade for Indian Equity benchmarks, with frontline gauges recapturing their crucial 31,500 (Sensex) and 9,850 (Nifty) levels. Sentiments remained up-beat since morning, as markets made a gap-up opening with a blog on Asian Development Bank’s website, stating that the Goods and Services Tax (GST) in India will benefit the lower and lower-middle income class as it is likely to reduce the tax rate on goods. It further stated that in general, GST is likely to reduce the tax rate on goods as compared to previously, while tax rates on services are expected to increase. Afterwards, markets traded with confidence in a tight band for most part of the session with traders taking encouragement with the Financial Stability & Development Council’s (FSDC) statement that India has macro-economic stability today on the back of improvement in its macro-economic fundamentals and structural reforms with the launch of the GST. The Council, comprising regulators, took note of the overall stability that has been achieved on the back of improvements in macro-economic fundamentals, structural reforms with the launch of the GST, action being taken to address the twin balance sheet challenge and financial market confidence.

Markets extended gains in the last leg of trade which mainly helped markets to end near intraday high levels, as some support came with the report that the loan portfolio of microfinance institutions (MFIs) increased by 26% to Rs 35,045 crore in the first quarter ended June 2017. Some support also came with the launch of the Mentor India Campaign, a strategic nation building initiative to engage leaders who can nurture and guide students at more than 900 Atal Tinkering Labs.  

On the global front, European markets were trading in red in early deals amid sharp declines in advertising giant WPP after it cut sales forecasts on weakening demand. Markets also shrugged off a PMI survey showing eurozone manufacturing businesses had their best month of growth in six and a half years in August. Asian markets exhibited mixed trend ahead of Jackson Hole, Wyoming conclave of central bankers this week that could provide fresh insight into policy options.

Back home, investors shrugged off rating agency ICRA’s latest report which has estimated that India’s gross value added (GVA) growth is likely to slow down to 6.3% in April-June quarter (Q1) of the fiscal year 2017-18 from 7.6% in the same period of the previous year. On the sectoral front, PSU banks remained on buyers’ radar after the Cabinet approved setting up of an alternative mechanism for the merger of public sector banks. Telecom stocks remained buzzing, as the Inter-Ministerial Group (IMG) on the telecom industry hinted on extending the timeline for deferred spectrum payment by telcos to 16 years instead of 10 at present. In scrip specific development, Infosys edged higher on a report that Nandan Nilekani is likely to re-join the company as the head. The clarity on Nilekani’s role is expected in the next 48 hours. The developments come a few hours after Narayana Murthy postponed his conference call with Infosys investors citing health issues. 

FII’s Activity 23-Aug-17

The FIIs as per Wednesday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.

In equity segment, the gross buying was of Rs 3474.55 crore against gross selling of Rs 4202.18 crore. Thus, FIIs stood as net sellers of Rs 727.63 crore in equities.

In the debt segment, the gross purchase was of Rs 2215.10 crore with gross sales of Rs 1086.46 crore. Thus, FIIs stood as net buyers of Rs 1128.64 crore in debt.

Now what to expect??

Nifty Levels

Above 9850 will see upside rally till 9920---9950 and then to 10050 marks else it could test its support level of 9780 again. 

Close below 9780 will see more downside panic till 9750---9620 mark. 

Trade with levels only.

Daily Derivative Outlook 24th August

• Nifty (Aug) futures closed at a Premium of 9.80 points versus premium of 14.25 points.

• Maximum put writing seen at 9900 and maximum option buying (unwinding by option writers) was seen at 9800 PE and 9800 CE strike.

• Maximum positions are at 10000 CE and 9600 PE. 

• SIEMENS (33%), KAJARIACER (24%), CONCOR (19%), BALKRISIND (18%) and INDIGO (11%) were the top gainers in open interest in the market.

• CEATLTD (-9%), UBL (-9%), DLF (-8%), NIITTECH (-7%) and LICHSGFIN (-7%) were the top losers in open interest in the market.

• The Nifty Put Call Ratio (PCR) finally stood at 1.18 for the August month contract.

• Advance Decline ratio in F&O segment was at 0.54, Advance (185) + Decline (33) + Unchanged (1) = 219 

Derivative Idea (24-08-2017)

Canara Bank losses 6.70% of open interest as Short Covering. It is trading near resistance level of 329.50. Canara Bank is forming double bottom pattern on hourly chart having breakout point at 329.50.

Now what to expect??

Break and sustain above 330 will take it to 342---345 and then to 360+++ mark in days to come.

Hurdle and stop loss below 322.00.

Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.

Trading Recommendation(24-Aug-17)

Buy Canara Bank (AUG) future above 329.50 Stop loss 322(on closing basis) Target 342--345 and then to 360++

DHFL- Top Pick(24-Aug-17)

RSI is 54.6. According to RSI analysis, dhfl is marginally strong.

According to simple moving average analysis, dhfl is in a strong uptrend.

The day ended with 4,611,259 stocks that were traded and along with this the 5 day, 10day & 30 day average volumes were observed to be 3,490,375 , 2,892,889 , and 2,421,399 respectively. 

The 5 day average volume rose 516757 stocks, 10 day average volume rose 340903 stocks and 30 day average volume rose 150981 stocks as compared to the previous day. 

In the last 52 weeks the lowest price observed was Rs. 213.70 while the highest price was Rs. 478.65.

Now what to expect???

Break and sustain above 473 will see upside rally till 480---485++ mark in days to come. 

Looks bearish only if close below 465 marks. 

Any sharp downside panic will be buying opportunity in it.

Trading Recommendation (23rd August 2017) 

Buy DHFL above 473 with stop loss of 465 (on a closing basis) Target 480---485+++.

Corporate Action

Maruti Suzuki India Limited-Dividend - Rs 75/- Per Share

The India Cements Limited- Annual General Meeting/Dividend - Re 1/- Per Share

More Will Update Soon!!

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Update on Nifty levels and Derivative Outlook of the day 04th August 2017

Nifty 10,031 /Sensex 32,237/ Bank Nifty 24675

20 Advances / 31 Declines/ 0 Unchanged

Benchmarks extend pessimism a day after RBI cut key rates

Extending southward journey for second straight session, Indian equity benchmarks ended the session with a cut of around three fourth of a percent, breaching their crucial 32,300 (Sensex) and 10,050 (Nifty) levels. Markets showed solemnity since beginning and never looked confident of recovering till end to close near intraday lows, as investors opted to remain on sidelines pondering rate outlook, a day after the RBI maintained its neutral stance, citing record low inflation. Most of the market participants are not expecting any further rate cut this year, saying the present low inflation print is not sustainable. Sentiments also remained dampened with report showing that the services sector contracted in July and fell to its lowest level in nearly four years following implementation of the Goods and Services Tax (GST). Nikkei India Services Purchasing Managers’ Index fell to 45.9 in July. Some concern also came with the Reserve Bank’s third bi-monthly monetary policy statement that farm loan waivers by state governments could result in possible fiscal slippages and undermine the quality of public spending.

Some concerns also came with the private report stating that more than 31 percent of the chief financial officers (CFOs) from various companies feel implementation of GST is challenging and manufacturing is the most affected sector. Market participants shrugged off Finance Minister Arun Jaitley’s indications that there could be scope for rationalization of rates under the GST as its implementation progresses. Jaitley also said that he was under pressure to change the GST Network which people said was faulty but felt the structure was correct. Traders also failed to get any solace with John Chambers’, Chairman of the newly-formed US-India Strategic Partnership Forum, prediction that India would turn out to be a role model for the world economies. He said India will figure among the top three economic powers in the world over the next 10-15 years.

Weak trend in Asian counters too dampened sentiments with most of the regional peers ended in red on Thursday on weak regional data. China’s services sector expanded at a slightly slower pace in July as new business growth eased, pointing to potential softening in a key part of the world’s second-largest economy. However, European markets were trading mostly in green as a fresh round of corporate earnings is set to be released and as investors eyed the Bank of England’s monetary policy decision due later in the day.

Back home, sharp appreciation in Indian rupee too failed to revive sentiments. The rupee strengthened against the US dollar at the time of equity markets closing, buoyed by hopes of more capital inflows, coupled with more selling of the American currency by banks and exporters. On the sectorial front, stocks related to telecom sector rang louder on report that the government may soon consider the telecom industry’s demand of doing away with telecom circles and will work towards the concept of one nation, one network and one license. However, stocks from auto sector edged lower despite healthy sales in July, allaying concerns over a likely fall in demand due to transition to the GST regime.

FII’s Activity 3-Aug-17

The FIIs as per Thursday’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 4106.42 crore against gross selling of Rs 3538.51 crore. Thus, FIIs stood as net buyers of Rs 567.91 crore in equities.

In the debt segment, the gross purchase was of Rs 1532.36 crore with gross sales of Rs 494.34 crore. Thus, FIIs stood as net buyers of Rs 1038.02 crore in debt.

Now what to expect next??

Nifty Levels

Our sell call in Nifty proven great. We recommended selling below 10100 mark.

Now what to expect???

Still looks weak and could test 10020---9950 mark.  More and more downside panic will see only close below 9950 mark else it could test it's resistance level of 10080---10120 and then to 10200 again.

Trade with levels only

Daily Derivative Outlook 4th August

• Nifty (Aug) futures closed at a Premium of 29.35 points versus a premium of 19.60 points.

• Maximum call writing was seen at 10350 strike, and maximum put buying was seen at 9900 strike.

• Maximum positions are at 10500 CE and 10000 PE. Nifty expected trading range spread to 10500—10000.

• INFIBEAM (32%), INFRATEL (23%), FORTIS (21%), ACC (15%) and CUMMINSIND (13%) were the top gainers in open interest in the market.

• JUBLFOOD (-10%), CADILHC (-9%), PVR (-8%), AUROPHARMA (-8%) and WOCKPHARMA (-8%) were the top losers of open interest in the market.

• The Nifty Put Call Ratio (PCR) finally stood at 0.97.

• Advance Decline ratio in F&O segment was at 0.77, Advance (67) + Decline (152)+ Unchanged (0) = 219 

Derivative Idea (04-08-2017)

PFC losses around 2.8% of open interest as short unwinding on Thursday’s trade.

PFC forming Symmetrical Triangle pattern on daily chart which has a breakout point at 128.50. Break and sustain above 128.50 will take it to 133—135++ mark in days to come. 

Support and stop loss below 122

Current chart pattern and derivatives data suggest that we expect further rally in coming sessions.

Trading Recommendation

Buy PFC (AUG) Future above 128.50 Stop loss 122 Target 133—135+

Corporate Action

Balkrishna Industries Limited - Interim Dividend - Rs 2.50 per Share

Voltas Limited-Annual General Meeting/Dividend - Rs 3.50 per Share

Tata Global Beverages Limited-Annual General Meeting/Dividend- Rs 2.35 per Share

Results Today

Andhra Bank

MRF Limited

Repco Home Finance Limited

Mahindra & Mahindra Limited

Hindustan Petroleum Corporation Limited

Gujarat State Fertilizers & Chemicals Limited

Fortis Healthcare Limited

Dabur India Limited

Berger Paints (I) Limited

Chennai Petroleum Corporation Limited

Arvind Limited

Apollo Tyres Limited

More Will Update Soon!!

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