MARKET OUTLOOK – 22 March, 2017

Consolidation Within An Uptrend Is Normal; Nifty Hovering Inside 9050-9200 Levels, No New Trades Inside This Range; Bank Nifty Shows Sign Of Weakness; Should Be Avoided.

stock market analysis

NIFTY:

It was a day of extreme choppiness with swings of half percent or more seen in Nifty during the session. Both bulls and bears tried their best to wrest control of the market from the other group. From intraday perspective, bulls had an upper hand as they managed a recovery in the last half an hour and closed near the yesterday’s close at 9121.50.

On the daily charts, Nifty is consolidating in a narrow range roughly within 9050 and 9200. The momentum on the upside has been waning for the past 2-3 sessions. This waning of momentum represents contraction suggesting that an expansion is coming. We do not know in which direction the break out will be but momentum will pick up once again only when Nifty breaks out from above suggested range.

Markets trade in cycles of expansion and contraction and Nifty is presently in the contraction phase. Now these ranges also cannot continue endlessly and we will have large directional moves whenever this range is broken but when it will actually end we don’t know and till then just bear it out.

BANK NIFTY:

Bank Nifty again had a narrow range day where prices opened with a minor change above 21100 and made a high near 21150. Prices took a sharp dip before finding intraday support near 21000. Last hour rally removed prices back above 21050 and eventually closed there with a loss of 60 points.

On the daily charts, prices were in a narrow range from last five days inside 21050-21350. The index broke below 21050 but quickly moved back inside range that suggests buyers support in the Bank Nifty.

Broadly, the index is consolidating with the boundaries 20850-21300. Primary Trend is up, so we may see a move above 21330 and that would be a buying opportunity for swing traders.

However, as far as prices are trading inside this narrow range, traders should look to avoid trading as trading in the choppy environment may result in excessive loss due to direction-less moves.

Any shorting opportunity in the Bank Nifty may come below its support area. Nonetheless, traders should wait for the prices to close below 20850 to initiate a short trade. Till then, avoid the index completely..

TECHNICAL PICKS

COMPANY NAME CMP B/S RATIONALE
BEML 1295 SELL Intermediate and short term trend is sideways in BEML. The stock has seen an upside rally and then started a process of consolidation at is top. We may see a breakdown here. Sell this stock below 1290. If this trade executes then place your stop just above 1305 and a target near 1260.
DISHTV 107 BUY Intermediate and short term trend is up in DISHTV. The stock has seen an upside rally and then saw a minor correction in a shape of bullish flag. Prices have seen a breakout from his pattern and closes higher. Buy this stock above 108. If this trade executes then place your stop just below 106 and a target near 112.

DERIVATIVE PICKS 

Stock Name Strike Price Buy/Sell CMP Initiation Stop Loss Target Remarks
UPL MAR FUT BUY 727.9 CMP 719 742 OI Increase
Long Buildup Short Buildup
Stocks Price Price% OI % OI Stocks Price Price% OI % OI
MRF.17.03 Mar 58190 3.6 4.31 55965 DRREDDY.17.03 Mar 2618 -4.55 12.25 3725800
IFCI.17.03 Mar 30.55 3.56 4.86 66440000 AXISBANK.17.03 Mar 490.75 -2.74 8.84 32775600
HDIL.17.03 Mar 78.7 2.94 8.23 26408000 IBULHSGFIN.17.03 Mar 941.5 -2.62 5.16 15916000
GRASIM.17.03 Mar 1095.3 2.7 6.62 6996750 UNIONBANK.17.03 Mar 152.25 -2.37 1.47 22624000
FEDERALBNK.17.03 Mar 89.2 2.59 3.96 63228000 CANBK.17.03 Mar 287.75 -2.33 9.26 16113900
                                                                           Short covering                                                                               Long Unwinding
ONGC.17.03 Mar 1.44 -1.73 41865000 194.1 WOCKPHARMA.17.03 Mar 727.1 -2.79 -4.6 3347400
UPL.17.03 Mar 1.28 -2.73 6619200 727.9 ENGINERSIN.17.03 Mar 148.9 -2.62 -0.37 22869000
DABUR.17.03 Mar 1.18 -0.61 12620000 283.4 JSWENERGY.17.03 Mar 62.05 -1.9 -1.79 58888000
BATAINDIA.17.03 Mar 1.06 -1.16 3654200 543.5 PCJEWELLER.17.03 Mar 432.5 -1.86 -12.89 963000
AJANTPHARM.17.03 Mar 0.78 -2.7 590800 1836.5 JETAIRWAYS.17.03 Mar 467.05 -1.58 -2.77 5295000

TOP DELIVERY PERCENTAGE

Stocks Price %Chg Vol Delivery Del % % Change
Sectors Price Change % Quantity
UltraTech Cement Limited 4007.8 0.2 341340 474634 85.27 Nifty 50 9121.5 -0.06 80430
Petronet LNG Limited 395.05 0.28 1243293 1901599 82.95 Nifty Bank 21019 -0.43 80430
Indian Oil Corp. Ltd. 372.1 0.31 3275266 4166817 82.77 Nifty IT 10787.2 0.1 80430
HDFC Bank Ltd. 1440.95 0.34 1389320 1674293 82.25 INDIA VIX 11.94 -0.64 80430
TECH MAHINDRA LIMITED 476.95 -1.03 4422809 3000142 80.34 Nifty Pharma 10493.75 -2.02 80430
Development Credit Bank 165.6 0.94 2930358 8453108 79.28 Nifty Infrastructure 3056.05 0.03 80430
Power Grid Corporation o 193.25 -0.18 4571337 4154835 78.76 Nifty Auto 9963.75 -0.46 80430
Dr. Reddys Lab Ltd 2623.25 -4.06 1453633 313522 78.17 Nifty Metal 3119.4 -0.23 80430
COALINDIA 292.25 0.15 6910712 5486669 77.55 Nifty Commodities 3440.2 0.23 80433
Hindustan Petroleum Corp 505.2 -1.2 2807323 2647453 77.45 Nifty Financial Services 8561.95 -0.25 80436

UPCOMING ECONOMIC DATA

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

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

•Existing Home Sales (Feb) on 22nd March, 2017.

CORPORATE NEWS

•Glenmark Pharmaceuticals USA has received approval from the United States Food and Drug Administration (USFDA) for Clobetasol Propionate Ointment, used for treatment of various skin conditions.

•Jubilant Life Sciences subsidiary Jubilant Pharma will negotiate a potential acquisition of a specialty business in the US.

•State Bank of India which will see five associate banks merge into it on April 1, has decided to shut down almost half the offices of these banks, including the head offices of three of them. This process will start from April 24.

•Tata Motors has commenced pre-bookings for Tata Tigor with a booking amount of Rs 5000.

Source: Economic Times, Business Standard

BOARD MEETINGS

Company Name Purpose Meeting Date Company Name Purpose Meeting Date
DELTACORP Issue of Securities 22-Mar-17 MUTHOOTFIN Dividend 23-Mar-17
UNITEDTEA Dividend 22-Mar-17 GALLISPAT Amalgamation/Merger 23-Mar-17
INFRATEL Dividend 22-Mar-17 BANKBARODA Issue of Securities 23-Mar-17
HINDZINC BM Rescheduled 22-Mar-17 MURUDCERA Allotment of Securities 24-Mar-17
HESTERBIO Others 22-Mar-17 SGL Others 24-Mar-17
GSKCONS Others 22-Mar-17 RECLTD Results 24-Mar-17
AGARIND Allotment of Securities 22-Mar-17 SBIN Meeting Updates 24-Mar-17
CANFINHOME Others 23-Mar-17 PFC Dividend 24-Mar-17

CORPORATE ACTION

Company Name Purpose Ex-Date Company Name Purpose Ex-Date
BEARDSELL Interim Dividend – Rs. – 1.5000 22-Mar-17 NILE Interim Dividend – Rs. – 3.0000 23-Mar-17
PHL Interim Dividend – Rs. – 7.5000 22-Mar-17 SVCRES Consolidation of Shares 23-Mar-17
SUNTV Interim Dividend – Rs. – 5.0000 22-Mar-17 VERONICAPRO Consolidation of Shares 23-Mar-17
AJANTPHARM Interim Dividend – Rs. – 7.0000 23-Mar-17 POLYMED Bonus issue 1:1 24-Mar-17
ASAHISONG Interim Dividend – Rs. – 3.0000 23-Mar-17 IBVENTURES Interim Dividend – Rs. – 1.0000 27-Mar-17
AUDICH Interim Dividend – Rs. – 3.5000 23-Mar-17 PTL Spin Off 27-Mar-17
ENGINERSIN Interim Dividend – Rs. – 2.5000 23-Mar-17 MAHLIFE Right Issue of Equity Shares 30-Mar-17

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

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