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!!
