MARKET OUTLOOK – 09 Feb, 2017

Reserve Bank Displays Its Excellence; Exercises Independent Judgement – No Rate Cuts Since Inflation Is The Big Enemy Of The Poor And Middle Class; Infrastructure Stocks May Continue To Rally; Mid Caps Should Outperform; Short Term Trend Remains Up

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NIFTY: India’s institutions have done its country proud – not once but always- be it the Armed Forces or the Election Commission or the Reserve Bank.

The Reserve Bank decided not to reduce the bank rate, fearing inflation may be down but not out. Markets initially reached quite negatively to this decision but quickly recouped their losses. The result was a lot of volatility after 2.30 PM when the decision was announced.

The Nifty fell to an intra day low of 8715 but quickly recovered to close much higher at 8775.

So far, the short term trend remains up.

Now that this last Big News event is over and done with, we expect the markets to continue with their normal rhythm – markets movements will be dictated by demand and supply rather than by sudden news impact. This is all for the good. Technical analysis is the study of demand and supply  – which means this letter can do its work without much external disturbance.

Since the short term trend is UP, the easiest way for the Nifty is to move up. Now that the news is done with, we assume that the Index will make an attempt to go above 8814 – the recent high, maybe towards 8900..

BANK NIFTYWe were long in the Bank Nifty at 20430. This trade was taken on Monday, Feb 6. We had asked traders to exit this position at 10.30 AM today, since we did not wish to carry a position going into the RBI meeting. At 10.30 AM, the Bank Nifty was trading at 20309. This position was close at 20309, with a minor loss of 121 points.

Today’s volatile movements have again caused the Bank Nifty to suggest some uncertainty in its short term movement. We do not have a trade for this instrument. PSU Banks are likely to see some softening of prices. But there is no clear pattern, so we step aside and wait.

TECHNICAL PICKS

COMPANY NAME CMP B/S RATIONALE
YESBANK 1410 BUY Trend is up in YESBANK. Prices have seen a rally and now some consolidation. We may see a breakout from a narrow trading range soon. Buy this stock above 1420. If this trade executes then place your stop just below 1400 and a target near 1460.
BEML 1274 BUY Intermediate trend is up in BEML. The stock has seen a sharp upside move and then started trading choppy and narrow. Prices have formed a pattern of ascending triangle and now at the verge of breakout. Buy this stock above 1282. If this trade executes then place your stop just below 1255 and a target near 1336.

DERIVATIVE PICKS

Stock Name Strike Price Buy/Sell CMP Initiation Stop Loss Target Remarks
ADANIPORT FEB FUT BUY 306.6 CMP 302 315 OI Increase
Long Buildup Short Buildup
Stocks Price Price% OI % OI Stocks Price Price% OI % OI
TITAN.17.02 Feb 425 7.79 25.54 8398500 NHPC.17.02 Feb 30.65 -2.39 6.33 37638000
MCLEODRUSS.17.02 Feb 170.55 6.33 9.33 4182000 TORNTPHARM.17.02 Feb 1259.05 -1.82 8.65 467200
ENGINERSIN.17.02 Feb 160 6.03 10.55 18417000 UBL.17.02 Feb 805.95 -1.74 3.58 1133300
GRANULES.17.02 Feb 132.1 4.63 7.79 12320000 SIEMENS.17.02 Feb 1217.45 -1.55 20.13 1163500
L&TFH.17.02 Feb 108.85 4.41 4.06 24003000 PETRONET.17.02 Feb 375.55 -1.53 10.11 7744500
Short Covering Long Unwinding
Stocks Price Price% OI OI% Stocks Price Price% OI OI%
SINTEX.17.02 Feb 3.89 -0.07 30003375 96.1 WOCKPHARMA.17.02 Feb 690.55 -2.03 -3.6 3888000
CENTURYTEX.17.02 Feb 3.46 -1.68 7992600 929.5 OFSS.17.02 Feb 3594.4 -1.53 -2 271950
JISLJALEQS.17.02 Feb 3.13 -1.12 39681000 98.8 ORIENTBANK.17.02 Feb 128.3 -1.31 -6.09 14154000
TATAGLOBAL.17.02 Feb 2.81 -0.1 27468000 146.3 STAR.17.02 Feb 1203.45 -0.74 -0.42 1876000
ARVIND.17.02 Feb 2.77 -3.09 7032000 381.5 JUBLFOOD.17.02 Feb 994 -0.68 -2.51 2443000

TOP DELIVERY PERCENTAGE

Long Buildup Short Buildup
Stocks Price Price% OI % OI Stocks Price Price% OI % OI
TITAN.17.02 Feb 425 7.79 25.54 8398500 NHPC.17.02 Feb 30.65 -2.39 6.33 37638000
MCLEODRUSS.17.02 Feb 170.55 6.33 9.33 4182000 TORNTPHARM.17.02 Feb 1259.05 -1.82 8.65 467200
ENGINERSIN.17.02 Feb 160 6.03 10.55 18417000 UBL.17.02 Feb 805.95 -1.74 3.58 1133300
GRANULES.17.02 Feb 132.1 4.63 7.79 12320000 SIEMENS.17.02 Feb 1217.45 -1.55 20.13 1163500
L&TFH.17.02 Feb 108.85 4.41 4.06 24003000 PETRONET.17.02 Feb 375.55 -1.53 10.11 7744500
Short Covering Long Unwinding
Stocks Price Price% OI OI% Stocks Price Price% OI OI%
SINTEX.17.02 Feb 3.89 -0.07 30003375 96.1 WOCKPHARMA.17.02 Feb 690.55 -2.03 -3.6 3888000
CENTURYTEX.17.02 Feb 3.46 -1.68 7992600 929.5 OFSS.17.02 Feb 3594.4 -1.53 -2 271950
JISLJALEQS.17.02 Feb 3.13 -1.12 39681000 98.8 ORIENTBANK.17.02 Feb 128.3 -1.31 -6.09 14154000
TATAGLOBAL.17.02 Feb 2.81 -0.1 27468000 146.3 STAR.17.02 Feb 1203.45 -0.74 -0.42 1876000
ARVIND.17.02 Feb 2.77 -3.09 7032000 381.5 JUBLFOOD.17.02 Feb 994 -0.68 -2.51 2443000

UPCOMING ECONOMIC DATA

                                      Domestic
•CPI Data on 13th Feb, 2017

•WPI Data on 14th Feb, 2017

CORPORATE NEWS

•Havells India has announced entry into the personal grooming space with an aim to capture 25% market share in next three years, while drawing up plans to enter the baby care segment by June.

•Federal Bank Limited has partnered with online data and information portal Commodity Online for the distribution of loans against warehouse receipts and collateral management services across the country.

• Tata Power-DDL has launched energy-efficient LED lighting and ceiling fans in association with Energy Efficiency Services Limited under the UJALA scheme for its customers.

Source: Economic Times, Business Standard 

BOARD MEETINGS

Company Name Purpose Meeting Date Company Name Purpose Meeting Date
AUROPHARMA Results 9-Feb-17 LUPIN Results 9-Feb-17
BAJAJELEC Results 9-Feb-17 MANAPPURAM Results 9-Feb-17
BATAINDIA Results 9-Feb-17 NCC Results/Others 9-Feb-17
BPCL Results/Dividend 9-Feb-17 OMAXE Results/Others 9-Feb-17
CAIRN Results 9-Feb-17 PAGEIND Results/Dividend 9-Feb-17
CAPTRUST Results 9-Feb-17 POWERGRID Results/Dividend 9-Feb-17
ICRA Results/Buyback 9-Feb-17 SAIL Results 9-Feb-17
JBMA Results 9-Feb-17 SCI Results 9-Feb-17
JINDALSAW Results 9-Feb-17 TALWALKARS Results/Others 9-Feb-17
JKTYRE Results 9-Feb-17 TORNTPOWER Results 9-Feb-17
LAURUSLABS Results 9-Feb-17 TVTODAY Results 9-Faeb-17

CORPORATE ACTION

Company Name Purpose Ex-Date Company Name Purpose Ex-Date
AEGISLOG Interim Dividend – Rs. – 0.3500 9-Feb-17 IBULHSGFIN Interim Dividend – Rs. – 9.0000 9-Feb-17
ARCHITORG Right Issue of Equity Shares 9-Feb-17 IOC Interim Dividend – Rs. – 13.5000 9-Feb-17
CUMMINSIND Interim Dividend – Rs. – 5.0000 9-Feb-17 KALINDEE Amalgamation 9-Feb-17
GAEL Buy Back of Shares 9-Feb-17 KPEL Interim Dividend – Rs. – 1.0000 9-Feb-17
GENUSPOWER Interim Dividend – Rs. – 0.1000 9-Feb-17 MARICO Interim Dividend – Rs. – 2.0000 9-Feb-17
GHCL Interim Dividend – Rs. – 1.5000 9-Feb-17 NLCINDIA Buy Back of Shares 9-Feb-17

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

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