Market Outlook – 27 March 2017

Dark Shadows Emerge Over Rally As Nifty Closes Higher But Intra-Day Gains Not Sustained; Trend Changed To Sideways And Period Of Consolidation Likely; 8980 Should Act As Support In Nifty; Avoid Index Trading;

Morning outlook 27 March 2017NIFTY

After a gap up above 9100, Nifty rallied to cross 9130 in no time, but that rally fizzled out in the second half. Intraday price action was choppy and volatile as prices traded with strength in the first half but eventually closed near the opening due to last hour dip.

Yesterday we had displayed three scenarios in our newsletter and our recommendation was “at least for the time being, markets may be willing to pause, try for a consolidation.” We still think that index is keen to trade inside a range with support (8980) and a resistance of (9200).

There is no rush to take a trade here. We can easily be patient.

Once inside a trading range, the short term trend for the Nifty becomes almost unknown. Sorry, there is a trend: it is a sideways trend. But, the sideways trend does not offer any opportunities for meaningful trading.

We should be buyers in the Nifty once the Index goes above 9200. We are willing sellers if the index goes below 8950. Between these two lines, you can take some intraday trades if you wish, but, mainly, take it easy.

BANK NIFTY:

It was an uptrend day in the Bank Nifty, as prices started well with a gap up of 100 points near 21000 and rally in early phase of the day took prices higher. The index made a high near 21175 but closed at 21122 with a gain of 235 points.

Now today’s rally has changed the bank Nifty trend to sideways. We may see a range bound trading in the index inside 20450 (acts as a support) and 21300 (resistance).

Traders were carrying short positions in the Bank Nifty from 20820 and we had advised them to hold with a stop loss of 21100.  Today prices opened near 21000 and intraday rally took prices above our stop loss of 21100. Traders have stopped out from short positions with a loss of 280 points.

Now, we do not have any new trading opportunity since our view in the Bank Nifty is sideways. Trading in choppy markets may result in damaging trader’s funds and capital. We should wait for a new trading pattern and then look to enter the markets.

TECHNICAL PICKS

COMPANY NAME CMP B/S RATIONALE
ASIANPAINT 1064 BUY Intermediate and short term trend is up in ASIANPAINT. The stock has seen an upside rally and then saw a minor correction in a shape of bullish flag. We may see a breakout here. Buy this stock above 1065. If this trade executes then place your stop just below 1050 and a target near 1095.
JISLJALEQS 93 BUY Intermediate and short term trend is sideways in JISLJALEQS. The stock has seen an upside rally and then started a process of consolidation. Prices have made a pattern of continuous bullish head & shoulder and now at the verge of breakout. Buy this stock above 96. If this trade executes then place your stop just below 95 and a target near 99.

DERIVATIVE PICKS

Stock Name Strike Price Buy/Sell CMP Initiation Stop Loss Target Remarks
ADANIENT MAR FUT BUY 105.8 ABOVE 106.5 104 110 OI Increase
Long Buildup Short Buildup
Stocks Price Price% OI % OI Stocks Price Price% OI % OI
CG POWER AND INDUSTRIAL 77.4 3.75 8.89 15576000 JINDALSTEL.17.03 Mar 120 -4.76 6.93 38880000
CUMMINSIND.17.03 Mar 926.1 1.89 1.45 798000 TCS.17.03 Mar 2436 -1.34 8.76 6946750
KSCL.17.03 Mar 562.1 1.6 9.33 3496500 HEXAWARE.17.03 Mar 221.2 -1.34 1.09 3624000
ADANIENT.17.03 Mar 105.95 0.95 1.09 19304000 AMBUJACEM.17.03 Mar 230.7 -1.22 2.57 12095000
LT.17.03 Mar 1554.15 0.37 1.02 8497000 TITAN.17.03 Mar 449.2 -0.97 0.08 5575500
                                                                           Short covering                                                                               Long Unwinding
APOLLOTYRE.17.03 Mar 0.99 -17.12 13053000 209.1 GRASIM.17.03 Mar 1061.9 -2.85 -0.4 7156500
NIITTECH.17.03 Mar 2.15 -16.72 762000 422.95 ABIRLANUVO.17.03 Mar 1537.45 -2.65 -11.59 2968800
HINDZINC.17.03 Mar 0.82 -14.79 10419200 295.3 RELCAPITAL.17.03 Mar 601.7 -1.88 -11.38 9169500
CASTROLIND.17.03 Mar 0.3 -14.48 7963200 420.05 TORNTPHARM.17.03 Mar 1411.75 -1.83 -2.06 190400
GRANULES.17.03 Mar 0.4 -11.47 12540000 137.8 GODREJCP.17.03 Mar 1670.15 -1.6 -0.61 456800

TOP DELIVERY PERCENTAGE

Stocks Price %Chg Vol Delivery Del % % Change
Sectors Price Change % Quantity
STRIDES SHASUN LIMITED 1139.65 -0.84 213826 1487435 96.09 Nifty 50 9108 0.24 29339831
Bajaj Auto Limited 2843 -0.8 218228 315713 86.52 Nifty Bank 21122.55 1.09 12671266
Tata Power Co. Ltd. 86.55 -0.63 4159127 3986116 83.57 Nifty IT 10768.95 -0.75 1194605
Kotak Mahindra Bank Limi 879.35 1.29 4605609 3282488 83.4 INDIA VIX 11.98 1.18 2.23E+08
HDFC Ltd. 1462.6 0.41 1701119 1944628 83.03 Nifty Pharma 10556.35 -0.18 25276113
BHARTI INFRATEL LIMITED 310.4 -1 1346006 1341014 80.08 Nifty Realty 213.2 0.45 1.25E+09
ITC Ltd. 281 1.22 7123953 13355224 79.04 Nifty Infrastructure 3045.15 0.2 87676998
IndusInd Bank Ltd. 1389.55 0.41 1602574 1212889 78.69 Nifty PSU Bank 3359.85 3.31 79957613
Mah & Mah Ltd. 1275.8 0.1 725278 779790 78.33 Nifty Auto 9878.35 -0.2 27026356
Wipro Ltd 513.25 0.64 1511636 2135935 76.34 Nifty Metal 3123 0.31 85448438

UPCOMING ECONOMIC DATA

                                      Domestic
•Nikkei Manufacturing PMI on 03rd April , 2017.

•IIP Data on  12th April , 2017. (Tentative)

CORPORATE NEWS

•Reliance Infrastructure has emerged the lowest bidder for a Rs 800-crore highway construction job in Tamil Nadu, The project entails widening a 66 km-long section of NH-45 C connecting Vikkaravandi to Pinalur-Sethiyahopu into four lanes. The engineering, construction and procurement project is to be completed in 24 months.

•Carborundum Universal (Cumi) has opened new fusion units at its electro mineral plant in Kochi, as part of efforts to manufacture engineered materials for high end applications.

•The United States Food and Drug Administration (US FDA) has granted Indian drug maker Lupin final approval to market a generic version of Swiss pharmaceutical giant Novartis’ tobramycin inhalation solution ‘Tobi’.

Source: Economic Times, Business Standard                             .

BOARD MEETINGS

Company Name Purpose Meeting Date Company Name Purpose Meeting Date
ANDHRABANK Preferential issue 27-Mar-17 COLPAL Dividend 27-Mar-17
SUNFLAG Meeting Updates 27-Mar-17 CEREBRAINT Issue of Securities 27-Mar-17
SUDARSCHEM Others 27-Mar-17 AUTOLITIND Preferential issue 28-Mar-17
UNITEDBNK Preferential issue 27-Mar-17 THEMISMED Meeting Updates 28-Mar-17
RAJASPETRO Appointment 27-Mar-17 IBVENTURES Preferential issue 28-Mar-17
KSCL Buyback 27-Mar-17 OFSS Dividend 29-Mar-17
MINDTREE Dividend 27-Mar-17 INDNIPPON Dividend 30-Mar-17
ESSARSHPNG Board Meeting Postponed 27-Mar-17 S&SPOWER Others 30-Mar-17

CORPORATE ACTION

Company Name Purpose Ex-Date Company Name Purpose Ex-Date
IBVENTURES Interim Dividend – Rs. – 1.0000 27-Mar-17 INFRATEL Interim Dividend – Rs. – 12.0000 31-Mar-17
PTL Spin Off 27-Mar-17 SFCL Amalgamation 31-Mar-17
HINDZINC Special Dividend – Rs. – 27.5000 29-Mar-17 OIL Buy Back of Shares 3-Apr-17
MAHLIFE Right Issue of Equity Shares 30-Mar-17 CONCOR Bonus issue 1:4 5-Apr-17
MPHASIS Buy Back of Shares 30-Mar-17 BOCINDIA Dividend – Rs. – 0.7500 7-Apr-17
SHARDACROP Interim Dividend – Rs. – 2.0000 30-Mar-17 KSBPUMPS Dividend – Rs. – 5.5000 12-Apr-17
ASHARI Bonus issue 4:1 31-Mar-17 SANOFI Final Dividend – Rs. – 50.0000 25-Apr-17

DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014

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