Market  Outlook – 15 Feb 2017

Seven Days Of Narrow Range In Nifty; Short Term Trend Becomes Sideways; Nifty, Nifty Bank Are Getting Ready For Big Move – Direction Could Be Up Or Down; Keep Positions Low; Follow The Direction Of Breakout When It Happens; It Stocks May Outperform;

Market Outlook 15 Feb 2017

NIFTYContraction is the period when markets move in narrow ranges, not sure where they actually want to go. Because markets are uncertain, there is little activity. This is how a trading range develops. Markets take lot of time developing these ranges. Most of the market’s time is spent in contraction – inside trading ranges.

This is what happening now in the NIFTY. The index is trading very narrow from last seven trading days. The index has locked inside 60 point range from 8760 – 8820.

At some point markets decide to move out of trading range – thus starting a period of expansion. The process of expansion takes very little time. A Market may spend 20 days in contraction, moving within 100 points. It may breakout of this range, and, moves 200 points in just five days.

This is what we are expecting now – a sharp movement in either side of the market. Our point is contraction uses up a lot of time with little movement. Expansion provides big moves in very little time.

From here there are three scenarios are likely;

(a)  Prices breaks above 8820,

(b) Prices breaks below 8760, and,

(c)  Prices remain inside 8760 – 8820.

Our View:: With very narrow price movement we do not have a clear view. Thus we are advising our readers to follow the range breakout. As of now short term trend is sideways.

BANK NIFTYBANK NIFTY opens with a gap up of almost 50 points. The index made its high near its open at 20314 and then moves down. Prices made its day low near 20158 and closes near the mid range of the day at 20256 near yesterday close.

The index continues trading narrow and the range also narrowing day by day. Markets go through the cycle of contraction and expansion. The index is consolidating from last eight trading days. This is contraction so after contraction we should expect an expansion on either side of the market.

Yesterday we had discussed three scenarios;

(a)  Prices breaks above 20400 then we will buy with a stop just below 20100.

(b) Prices breaks below 20000 then we will sell with a stop just above 20300.

(c)  Prices remain trading inside 20000 – 20400 then we will avoid trading.

These are still valid and we are advising our readers to follow these and trade accordingly.

TECHNICAL PICKS

COMPANY NAME CMP B/S RATIONALE
BATAINDIA 499 BUY Intermediate trend is up in BATAINDIA. The stock has seen an upside rally and then started a minor correction. That correction is now finding support near 490. We may see an upside rally here. Buy this stock above 500. If this trade executes then place your stop just below 490 and a target near 520.
HDFC 1399 BUY Intermediate and short term trend is up in HDFC. The stock has seen an upside rally and then started trading range bound. We may see a breakout here. Buy this stock above 1400. If this trade executes then place your stop just below 1390 and a target near 1420.

DERIVATIVE PICKS

Stock Name Strike Price Buy/Sell CMP Initiation Stop Loss Target Remarks
APOLLOTYRE FEB FUT SELL 176 BELOW 176 179.5 170 OI Increase
Long Buildup Short Buildup
Stocks Price Price% OI % OI   Stocks Price Price% OI % OI
BHARTIARTL.17.02 Feb 368.9 3.23 2.47 39689900 TATAMTRDVR.17.02 Feb 289.25 -8.77 9.79 19101600
GODREJCP.17.02 Feb 1607.5 3.16 1.08 526000 TATAMOTORS.17.02 Feb 469.75 -7.22 12.41 39967500
IDBI.17.02 Feb 84.3 2.93 10.56 26208000 NMDC.17.02 Feb 138.9 -4.47 2.09 19386000
APOLLOHOSP.17.02 Feb 1252 2.84 4.8 751200 HINDZINC.17.02 Feb 304.45 -3.52 14.8 10054400
GAIL.17.02 Feb 494.9 2.66 6.75 10627500 MINDTREE.17.02 Feb 453.1 -3.49 2.05 3230400
Short Covering Long Unwinding
Stocks Price Price% OI OI%   Stocks Price Price% OI OI%
ONGC.17.02 Feb 1.79 -0.57 38467500 196.25 HINDPETRO.17.02 Feb 546 -5.04 -0.6 21245700
RCOM.17.02 Feb 1.78 -0.76 1.06E+08 34.25 BPCL.17.02 Feb 693.05 -3.09 -1.28 10750800
BATAINDIA.17.02 Feb 1.27 -1.59 3413300 501.05 JSWSTEEL.17.02 Feb 182.3 -2.88 -0.03 47532000
OIL.17.02 Feb 0.78 -2.18 2343044 336.75 PTC.17.02 Feb 84.1 -2.44 -0.61 18360000
PETRONET.17.02 Feb 0.61 -0.32 7455000 384.9 DISHTV.17.02 Feb 87.65 -2.07 -0.22 37394000

TOP DELIVERY PERCENTAGE

Stocks Price %Chg Vol Delivery Del % % Change
Sectors Price Change % Quantity
Hero MotoCorp Limited 3162.95 -1.97 420128 310528 80.46   Nifty 50 8792.3 -0.14 83436
Bharti Airtel Limited 368.95 3.04 4271242 2516321 76.1 Nifty Bank 20258.1 0.03 83436
NTPC Limited 170.85 -0.96 4311748 4542154 73.85 Nifty IT 10474.1 0.2 83436
HDFC Ltd. 1398.15 0.44 1564027 1205062 73.53   INDIA VIX 13.8 0.82 83433
Grasim Ind Ltd. 1011 1.07 1521072 1414965 72.3   Nifty Energy 10728.85 0.23 83436
NHPC 30.6 1.32 10641049 6633822 70.18   Nifty Pharma 10322.25 -0.78 83436
ITC Ltd. 270.8 0.07 6655626 6214914 69.3   Nifty Realty 192.6 -0.72 83436
Infosys Limited 987.7 0.34 4669409 4728443 68.91   Nifty Auto 9820.6 -1.53 83436
Kirloskar Cummins Ltd. 885.55 1.34 243134 101751 68.81   Nifty Metal 3055.45 -0.9 83436
Power Grid Corporation o 200.85 -1.08 5289337 3678193 68.77   Nifty Media 2993.55 -0.93 83436

UPCOMING ECONOMIC DATA

                                      Domestic                                                                                                               International
•Quarterly GDP (Q4) (YoY) on 28th Feb, 2017.

•IIP Data (YoY)  on 10th March, 2017.

•US Core CPI (MoM)  (Jan) on 15th  Feb, 2017.

•US Crude Oil Inventories on 15th Feb, 2017.

CORPORATE NEWS

•Mahindra & Mahindra  will launch two new utility vehicles next financial year in addition to upgrades to the existing range, as it looks to protect market share in its core utility vehicle segment.

•Mahindra Aerostructures has partnered with French firm Segnere SAS to collaborate on airframe manufacturing opportunities and expand capabilities for the global aerospace market.

•Standard & Poor’s has downgraded IDBI Bank to ‘BB’ citing “very weak asset quality” but maintained a stable outlook on the state-run lender.

•Petronet LNG Ltd, India’s largest liquefied natural gas importer, has bought a 26 percent stake in the shipping consortium that built its biggest LNG ship to transport gas form from Australia.

Source: Economic Times, Business Standard

BOARD MEETINGS

Company Name Purpose Meeting Date Company Name Purpose Meeting Date
ASAHIINDIA Results 15-Feb-17 CASTROLIND Results/Dividend 21-Feb-17
SANCO Results 15-Feb-17 PAPERPROD Results/Dividend 21-Feb-17
RAJTV Results 15-Feb-17 KAMATHOTEL BM Postponed 21-Feb-17
SGFL Results 15-Feb-17 ITDCEM Results/Dividend 21-Feb-17
GAMMONIND Results 15-Feb-17 EMCO BM Postponed 23-Feb-17
MALWACOTT BM Postponed 18-Feb-17 RAIN Results 23-Feb-17
AMBUJACEM Results/Dividend 20-Feb-17 MAHINDCIE Results 23-Feb-17
VBL Results/Others 20-Feb-17 MERCK Results/Dividend 24-Feb-17
KSBPUMPS Results/Dividend 20-Feb-17 VESUVIUS Results/Dividend 27-Feb-17

CORPORATE ACTION

Company Name Purpose Ex-Date Company Name Purpose Ex-Date
GULFOILLUB Interim Dividend – Rs. – 3.5000 15-Feb-17 JAYAGROGN Interim Dividend – Rs. – 5.0000 16-Feb-17
INDIANHUME Interim Dividend – Rs. – 1.0000 15-Feb-17 KALECONSUL Interim Dividend – Rs. – 11.0000 16-Feb-17
NTPC Interim Dividend – Rs. – 2.6100 15-Feb-17 MANAPPURAM Interim Dividend – Rs. – 0.5000 16-Feb-17
POLYMED Interim Dividend – Rs. – 1.0000 15-Feb-17 MENONBE Interim Dividend – Rs. – 1.0000 16-Feb-17
AMRUTANJAN Interim Dividend – Rs. – 1.1000 16-Feb-17 MINDAIND Interim Dividend – Rs. – 1.2000 16-Feb-17
AVTNPL Interim Dividend – Rs. – 0.2000 16-Feb-17 PAGEIND Interim Dividend – Rs. – 25.0000 16-Feb-17
BHARATFORG Interim Dividend – Rs. – 2.5000 16-Feb-17 POWERGRID Interim Dividend – Rs. – 1.0000 16-Feb-17
BOSCHLTD Interim Dividend – Rs. – 75.0000 16-Feb-17 SELAN Interim Dividend – Rs. – 5.0000 16-Feb-17
COMPUAGE Stock  Split From Rs.10/- to Rs.2/- 16-Feb-17 SHBCL Interim Dividend – Rs. – 0.2500 16-Feb-17

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

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