MARKET OUTLOOK – 06 JUNE 2017

Markets remain steady with nifty, Bank nifty recording another life time high; narrow range in nifty suggests process of contraction may come to an end soon; expect strong, expanding price action in indices soon enough.

daily market research

NIFTY: The Nifty has recorded five days of really narrow ranges. Narrow ranges usually lead to big thrusting moves, up or down. As we write this, the Nifty is at lifetime high, closing at 9675.10 with a gain of 21.60 points. Traders should wait patiently for expansion and then look to enter the market; there is no hurry here.

Traders should strive to have one view for day to day trading. Since the current intermediate trend is UP, the best way to trade the market is to remain on the buy side.

Often, intraday movements as well as very short term (few days) trend will change to down. It is best to step aside and avoid such moves. Short selling in a bull market is not a good idea. There will be severe corrections which will show themselves as intermediate down trend. Professional traders should consider some short selling in such down moves. As of now, we do not have any pattern that suggests a down trend is starting.

Our bias for the short term is choppy but with an upside direction. Short term traders should ideally stay out of this market and wait patiently for buying set ups. Intraday traders can look to buy small dips or breakout from consolidation patterns as long as Nifty stays above 9530 level.

Gains in the index were contributed mainly by Auto and Banks while Pharma and Metal drags. Market breadth was positive today with 817 rising and 647 declining shares on the NSE.

BANK NIFTY: Bank Nifty had a narrow range day but with a bullish bias; prices opened with a gap up near 23400 and made a high just below 23500. Eventually index managed to close above 23450 with a gain of 100 points.

On the daily charts, Bank Nifty is still trading inside 23000-23500 from last seven days. Moreover, index has made an ascending triangle pattern at its top. A decisive breakout from this range would be a next trading opportunity for swing traders. Trend is up and the index is trading in the upper hand of a range; so possibility of upside breakout is higher.

We are suggesting a trade for a short period of time. Traders should take long positions in the index above 23500. However, if price opens above 23500 then apply 15-min rule; your entry point would be the high made between 09:15 to 09:30 AM. If that trade executes then place your stop loss at 23250 in both the cases. Target for this trade should come at 23950.

Intraday traders can continue to initiate long positions on dips and consolidation patterns as suggested before. Avoid taking short positions.

 

TECHNICAL PICKS

COMPANY NAME CMP B/S RATIONALE
AJANTAPHARM 1599 SELL Intermediate and Short Term Trend is down in AJANTPHARM. The stock has seen a decline and then saw a minor correction in a form of Bearish Flag. We may see a breakdown here. Sell this stock below 1595. If this trade executes then place a stop just above 1620 and a target at 1545.
MINDTREE 556 BUY Intermediate and Short Term Trend is up in MINDTREE. The stock has seen an upside rally and then started trading very narrow. Prices have formed a pattern of Ascending Triangle and broken on upside. Buy this stock above 558. If this trade executes then place a stop just below 550 and a target at 574

DERIVATIVE PICKS

Stock Name Strike Price Buy/Sell CMP Initiation Stop Loss Target Remarks
HINDZINC JUNE FUT BUY 244.6 CMP 241 252 OI Increase
Long Buildup Short Buildup
Stocks Price Price% OI % OI Stocks Price Price% OI % OI
AUROPHARMA.17.06 Jun 582.45 13 7 18263700 BHEL.17.06 Jun 140.6 -8.88 15.17 43080000
JPASSOCIAT.17.06 Jun 12.2 9.91 4.85 183600000 HEXAWARE.17.06 Jun 234.05 -5.76 19.28 2970000
INDIACEM.17.06 Jun 206 8.91 3.19 26040000 JUBLFOOD.17.06 Jun 904.1 -3.69 37.01 2930000
IBREALEST.17.06 Jun 169.4 6.71 1.54 27050000 SINTEX.17.06 Jun 28.15 -3.6 6.95 15233250
ADANIENT.17.06 Jun 119.1 6.58 1.59 22432000 NATIONALUM.17.06 Jun 66.6 -3.41 2.56 4168000
                                                                           Short covering                                                                               Long Unwinding
ADANIPORTS.17.06 Jun 3.67 -3.45 10645000 341.65 POWERGRID.17.06 Jun 204.6 -2.39 -0.07 24108000
EQUITAS.17.06 Jun 3.23 -1.1 7484800 154.85 INDUSINDBK.17.06 Jun 1480.2 -0.57 -0.25 5713800
DIVISLAB.17.06 Jun 3.01 -0.2 10490400 589.55 MOTHERSUMI.17.06 Jun 448.1 -0.41 -2.2 7877500
AJANTPHARM.17.06 Jun 2.57 -1.56 377600 1570 HINDUNILVR.17.06 Jun 1065.25 -0.4 -0.5 9369000
RPOWER.17.06 Jun 2.5 -0.14 59148000 41.05 NCC.17.06 Jun 85.1 -0.29 -1.34 18848000

TOP DELIVERY PERCENTAGE

Stocks Price %Chg Vol Delivery Del % % Change
Sectors Price Change % Quantity
Hindustan Unilever Ltd 1097.75 1.04 612171 1803842 81.39 Nifty 50 9675.1 0.22 86409
Ambuja Cements Ltd 240.35 -0.04 966410 1733856 80.94 Nifty Bank 23459.65 0.36 86364
Oracle Fin Serv Soft Ltd 3679 1.39 22779 27758 80.43 Nifty IT 10660.1 0.48 86364
NESTLEIND 6714.2 0.99 34741 23621 78.76 INDIA VIX 11.02 1.94 98193
Power Grid Corporation o 205.3 -0.39 2865347 2859517 75.72 Nifty Energy 11806.4 0.42 86364
TATA CONSULTANCY 2603.95 1.52 750094 511928 75.53 Nifty Pharma 9229.75 -0.27 86364
HCL Technologies Ltd. 858.7 0.09 1408309 839149 75.48 Nifty Realty 255.95 0.77 86364
HDFC Ltd. 1606.15 0.09 2988075 2572628 75.05 Nifty Infrastructure 3271.65 0.54 86364
ONGC 175.75 1.01 5836542 3017795 74.71 Nifty PSU Bank 3530.85 0.1 86364
Cholamandal Investment 1046.35 1.09 141001 88404 72.54 Nifty Auto 10967.95 0.24 86364

UPCOMING ECONOMIC DATA

                                      Domestic                                                                                                                                       International
•RBI Monetary Policy on 07th June, 2017.

•IIP & CPI Data on 12th June, 2017.

•US  Crude Oil Inventories on 07th June, 2017.

•US Initial Jobless Claims on 08th June, 2017.

CORPORATE NEWS

•NTPC has entered into the new business segment of setting up charging stations for electric vehicles (EVs) and has installed first such points at its offices in Delhi and Noida. The main objective in setting up EV charging points is to be part of promoting clean energy transportation.

•Andhra Bank and Allahabad Bank have put up for sale nearly Rs 6,000 crore of bad loans amid mounting pressure on state-run lenders to clean their books

• Zydus Cadila has received the US health regulator’s nod to market levofloxacin injection, used to treat bacterial infections, in the American market. The company has received final approval from the US Food and Drug Administration (USFDA) to market levofloxacin injection, 500 mg/20mL and 750mg/30 mL

Economics Times, Capitaline Database

CORPORATE ACTION

Company Name Purpose Ex-Date Company Name Purpose Ex-Date
HINDUJAFO Amalgamation 6-Jun-17 MUTHTFN Bonus issue 1:10 12-Jun-17
IRB Interim Dividend – Rs. – 3.0000 6-Jun-17 JSWSTEEL Dividend – Rs. – 2.2500 12-Jun-17
 MANINFRA Interim Dividend – Rs. – 0.5400 7-Jun-17 WIPRO Bonus issue 1:1 13-Jun-17
INDOZIN-B Amalgamation 8-Jun-17 CHEMBOND Dividend – Rs. – 1.6500 13-Jun-17
VTMLTD Dividend – Rs. – 0.7500 8-Jun-17 KANSAINER Dividend – Rs. – 2.5000 13-Jun-17
BPCL Final Dividend – Rs. – 1.0000 8-Jun-17 TCS Final Dividend – Rs. – 27.5000 13-Jun-17
TORNTPOWER Final Dividend – Rs. – 2.2000 8-Jun-17 KANSAINER Special Dividend – Rs. – 0.5000 13-Jun-17
BOSCHLTD Final Dividend – Rs. – 90.0000 8-Jun-17 CANFINHOME Dividend – Rs. – 10.0000 14-Jun-17
AUROPHARMA Interim Dividend – Rs. – 1.2500 8-Jun-17 VISAKAIND Dividend – Rs. – 6.0000 14-Jun-17
LLOYDELENG Special Dividend – Rs. – 20.0000 8-Jun-17 MASTEK Final Dividend – Rs. – 2.5000 14-Jun-17
RJL Buy Back of Shares 9-Jun-17 CHEVIOT Buy Back of Shares 15-Jun-17
KITEX Final Dividend – Rs. – 0.7500 9-Jun-17 TTKPRESTIG Buy Back of Shares 15-Jun-17
INDAG Final Dividend – Rs. – 1.5000 9-Jun-17 CHEVIOT Dividend – Rs. – 1.0000 15-Jun-17
RALLIS Final Dividend – Rs. – 2.5000 9-Jun-17 DEEPAKNI Dividend – Rs. – 1.2000 15-Jun-17
NETWORK Reduction of Capital 9-Jun-17 VIJAYABANK Dividend – Rs. – 1.5000 15-Jun-17
RALLIS Special Dividend – Rs. – 1.2500 9-Jun-17 NITTAGELA Dividend – Rs. – 2.5000 15-Jun-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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