Market Outlook – 03 May 2017

Five Days Of Narrow Ranges Inside A Trading Range (9280-9370) Suggests Uncertainty And Consolidation; Wait Patiently For Market To Move Beyond Range; Midcap Continues To Outperform;

NIFTY

Nifty traded choppy in a narrow range with a negative bias for most part of the day. However, it recovered some losses in the second half to finally close above previous day’s close at 9313.80 with a gain of 9.75 points. Index ended in the middle of today’s range hence nothing much can be derived from intraday price action. 

On the daily charts, sideways movement sustain in Nifty which is continuing from last five trading days with a support around 9280 and resistance is visible near 9370.

Markets go through cycles of contraction and expansion. Traders make money in expanding markets. Strong momentum provides gains. However, the numbers of trading days with strong momentum are few. Thus, most of the gains in trading are made in a small number of days. For the larger part, markets remain in consolidation which is another term for contraction. This process is now being repeated for the Nifty.

We should wait for the prices to go beyond range for the next expansion phase. There is no trade in the index as far as prices are inside this range.

Now, within this range, prices may go up and down, but until a breakout, there is no clarity on the next move. This is the nature of the market, which we have to accept. Therefore, look to avoid the market till prices settle down or find a new move.

BANK NIFTY:

Bank Nifty has made another lifetime high but could not sustain the gains and closed lower. The index opened with a gap up above 22400 and made a new high just below 22500 but then witnessed a steep fall. Prices consolidated in the other half and closed above 22350 with minor gains.

On the daily charts, Bank Nifty has seen a straight line rally that took prices from 21400 to a recent high near 22500 (today). After a rise like this, index tends to consolidate. This seems to be happening in the Bank Nifty. We will see a breakout from this contraction soon but till then traders should wait.

Overall trend remains up in the Bank Nifty but we do not have any view for intraday traders as well. Therefore, actual trades in the Bank Nifty depend on the behaviour of the price movements or market action during the day; trade with lower volumes. But if you feel that there is no sense of momentum then simply step aside and wait for a trading opportunity…

TECHNICAL PICKS

COMPANY NAME CMP B/S RATIONALE
RECLTD 213 BUY Intermediate and Short Term Trend is up in RECLTD. The stock had seen a remarkable up move but then confront with some correction. Now, prices are again breaking out. We may see an upside rally here. Buy this stock above 213. If this trade executes then place a stop just below 209.50 and a target at 220.
TATAGLOBAL 157 157 Intermediate and Short Term Trend is up in TATAGLOBAL. The stock has seen an upside rally and then started trading narrow inside a range. Prices broke out from narrow range. We may see an upside rally here. Buy this stock above 158. If this trade executes then place a stop just below 154.50 and a target at 165.

DERIVATIVE PICKS

Stock Name Strike Price Buy/Sell CMP Initiation Stop Loss Target Remarks
LICHSGFIN MAY FUT BUY 708 703-704 694 720 OI Increase
Long Buildup Short Buildup
Stocks Price Price% OI % OI Stocks Price Price% OI % OI
DCBBANK.17.05 May 199.15 7.94 58.03 6507000 UJJIVAN.17.05 May 357 -6.02 29.21 8206800
IBULHSGFIN.17.05 May 1067.7 5.6 3.2 15048800 RCOM.17.05 May 33.45 -3.32 5.37 1.02E+08
L&TFH.17.05 May 135.2 5.54 6.02 22500000 JPASSOCIAT.17.05 May 13.35 -2.91 1.86 1.71E+08
LICHSGFIN.17.05 May 708.75 5.24 17.04 5470300 ASHOKLEY.17.05 May 83.75 -2.73 5.63 71736000
DHFL.17.05 May 450.7 4.89 6.47 23635500 MRPL.17.05 May 130.95 -2.71 52.56 1476000
                                                                           Short covering                                                                               Long Unwinding
ADANIENT.17.05 May 3.69 -10.44 33704000 113.8 BHARATFIN.17.05 May 786 -3 -3.11 23565000
HINDPETRO.17.05 May 2.54 -0.22 18949350 553.5 INDIACEM.17.05 May 212 -2.57 -0.49 22043000
SIEMENS.17.05 May 1.65 -0.38 789500 1343 ACC.17.05 May 1595.05 -2.38 -4.5 1561600
OFSS.17.05 May 1.6 -0.72 207300 3634.05 TATACOMM.17.05 May 716.9 -0.98 -0.3 7710500
VOLTAS.17.05 May 0.71 -0.41 7238000 416.5 IDBI.17.05 May 77.9 -0.89 -0.86 39840000

Top Delivery Percentage

Stocks Price %Chg Vol Delivery Del % % Change
Sectors Price Change % Quantity
Container Corp of India 1199.6 -1.5 313993 291086 83.93 Nifty 50 9313.8 0.1 76263
Petronet LNG Limited 425.6 0.44 1260965 1927397 79.95 Nifty Bank 22341.35 -0.08 76263
Hindustan Unilever Ltd 928.1 -0.73 1615376 2837606 79.15 Nifty IT 10006.35 0.63 76263
HDFC Ltd. 1584.75 3.1 4472854 2252219 79 INDIA VIX 11.45 5.41 76263
Dabur India Ltd. 284.9 -0.65 1042683 1281218 77.83 Nifty Energy 12242.85 -0.17 76263
Wipro Ltd 494.9 0.13 1044093 1720916 75.94 Nifty Pharma 10036.35 -0.84 76263
TATA CONSULTANCY 2289.9 0.74 1191337 962404 75.76 Nifty Realty 255.65 1.83 76263
NTPC Limited 162.1 -1.46 3354986 1921053 75.24 Nifty Infrastructure 3231.2 -0.74 76263
Infosys Limited 922.6 0.4 1615488 1875526 74.58 Nifty Auto 10294.75 0.39 76263
Cipla Ltd 555.35 -0.38 1380964 639728 73.91 Nifty Metal 2957.35 -0.57 76263

Upcoming Economic Data

                                      Domestic
•Nikkei Service PMI on 05th May, 2017. •US Service PMI (Apr) on 3rd May, 2017.

•US Crude Oil Inventories data on 3rd May, 2017.

Corporate News

1.NMDC Ltd has received the green nod for setting up of Rs 1,095 crore iron ore beneficiation plant at Dantewada district, Chhattisgarh. The company wants to set up the unit to produce iron ore concentrate (in slurry form) suitable for making pellets and transport the same through ‘slurry pipeline transporation system’ from Bacheli in Dantewada district to Nagarnar in Bastar district.

2.Coal India has not only missed its production target by 12% during the first month of the current fiscal, it has also witnessed a 4.8% fall over the previous corresponding period. On the sales front, the company managed a 6.1% growth although it missed targets for the month by some 9%.

3. Tata Steel UK has completed the sale of its Specialty Steels business to Liberty House Group for a total consideration of £100 million.

Source: Economics Times, Capitaline Database.

Board Meetings

Company Name Purpose Meeting Date Company Name Purpose Meeting Date
APLLTD Results/Dividend 3-May-17 LTTS Results/Dividend 3-May-17
ZANDUREALT Results 3-May-17 KPRMILL Results/Dividend 3-May-17
VMART Results/Dividend 3-May-17 KAYA Results/Others 3-May-17
VARDHACRLC Results/Dividend 3-May-17 MERCK Results 3-May-17
TBZ Results/Dividend 3-May-17 INTELLECT Results/Others 3-May-17
SHANTIGEAR Results/Dividend 3-May-17 ICICIBANK Results/Dividend 3-May-17
SUNCLAYLTD Results 3-May-17 IGPL Results/Dividend 3-May-17
RSYSTEMS Results/Others 3-May-17 EVERESTIND Results/Dividend 3-May-17

Corporate Action

Company Name Purpose Ex-Date Company Name Purpose Ex-Date
CRISIL Interim Dividend – Rs. – 6.0000 3-May-17 HATSUN Interim Dividend – Rs. – 3.0000 5-May-17
ITDCEM Dividend – Rs. – 0.3000 3-May-17 HEXAWARE Interim Dividend – Rs. – 1.0000 5-May-17
STOVAC Final Dividend – Rs. – 31.0000 3-May-17 KKCL Interim Dividend – Rs. – 7.0000 5-May-17
BEARDSELL Bonus issue 1:5 4-May-17 MISHTANN Consolidation of Shares 5-May-17
BEARDSELL Stock  Split From Rs.10/- to Rs.2/- 4-May-17 TCS Buy Back of Shares 5-May-17
VESUVIUS Dividend – Rs. – 6.5000 4-May-17 GMBREW Dividend – Rs. – 3.0000 9-May-17

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

Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more


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