Thursday, 23 March 2017

Tech View: Nifty forms a bearish candle; crucial support seen at 8,975

The Nifty which closed below its crucial support level of 13-days EMA placed at 9,038 made a bearish candle which closely resembles that of an ‘Inverted Hammer’ on the daily candlestick charts.

The tussle between the bulls and the bears went for the fourth consecutive day in a row but this time bears managed to overpower bulls as Nifty recorded its biggest fall of the year on Wednesday.

The Nifty which closed below its crucial support level of 13-days EMA placed at 9,038 made a bearish candle which closely resembles that of an ‘Inverted Hammer’ on the daily candlestick charts.

A bounce back could well be on the cards because the index is trading close to its crucial support levels. Investors should not go short in this market till the time it holds above 8,975, while a close above 9075 could start the uptrend again, suggest experts.

“If the Nifty manages to cross and hold above 9,075 then only we may see a move towards 9,119 then 9,160 while on the downside next supports are seen at 8,980 then 8,920 levels,” Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told Moneycontrol.com.

The Nifty witnessed a sharp down move after hitting its record high of 9,218 on 17th March. Inverted Hammer is a bullish reversal pattern and can be characterised by a long upper shadow and a small real body, appearing after series of bearish candles.

In the exact ‘Inverted Hammer’ type of candle formation the close, open and low are roughly at the same level. However, in Wednesday’s price action small lower shadow was visible.

“The Nifty registered inverted hammer kind of formation as it witnessed selling pressure after an attempt to recover post gap down opening. Usually, this kind of formation if followed by higher opening and bullish candle in next trading session signals trend reversal,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.com.

The Nifty opened at 9,047.20 and slipped to an intraday low of 9,019.30 which made a small lower shadow. It recorded an intraday high of 9,072 which made long upper shadow and closed at 9,030.45

In theory, a confirmation can be seen in the form of next day’s candle formation. If the candle is above hammer's body in the form of a white candle with higher prices then long positions can be initiated.

The Nifty is trading close to its lower boundary of a channel support and inside the critical gap zone of 9,060 – 8,975 registered on 14th March. Hence, a bounce back cannot be ruled out because these levels will act as crucial support for the index.

“It is critical for Nifty to register a bullish close in next trading session to prevent further damage. A bounce from the gap zone can’t be ruled out in immediate trading session whereas a failure to sustain above 8,975 on closing basis shall pull the indices into the bear grip for prolonged period in near term,” he said.
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Wednesday, 22 March 2017

Trade with caution as Nifty heads towards 9K; 5 stocks to bet on: GEPL Capital

We maintain a cautious approach from here on as a welcome correction is not ruled out. But, the stock specific action is likely to continue.

The Nifty on Tuesday remained sideways and remained within the high of 9,218 and low of 9,060 corresponding to last week.

The level of 9,060 is significant because if the index slips towards this level it will enter the GAP area which was created from close of 8,934 on 10th March 2017 to open of 9,092 on 14th March 2017.

While the market has remained within this ambit, there is a marked case of profit booking at higher levels, which has given rise to rotational movement within the index constituents especially the heavyweights.

We maintain a cautious approach from here on as a welcome correction is not ruled out. But, the stock specific action is likely to continue.

Here is a list of top five stocks which are looking attractive based on technical parameters:

Tata Steel: BUY| Target Rs 530-575| Stop Loss Rs 460-465

The charts are showing a rational uptrend in the last 12 months, with intermediate bouts of profit booking. The stock is trading above all its long term moving averages like 50, 100 & 200-day moving averages too, remaining in a rational uptrend as well as positively aligned.

In the latest leg, the prices corrected from around Rs 500 to a level of around Rs 463, and after consolidation moved higher on pretty big delivered volume back to Rs 500. In the process, a good amount of Put writing was seen at lower levels around the Rs 480-490 mark creating a good setup for an up move.

We feel prices would create space till around Rs 530 followed by a take at the 2-year high of around the Rs 575 mark. On the lower side, the recent swing low of around Rs 460-465 will prove to be a good demand zone.

Hindalco Industries: BUY| Target Rs 225| Stop Loss Rs 175

The scrip has been in a rational uptrend for some time now which led to the formation of higher top and higher bottoms right since February 2016.

In fact, the latest leg has seen Hindalco creating fresh 52-week highs at Rs 202 just last week. Once again the consolidation seems to be pretty strong with exponential delivered volumes being around twice the averages.

“We feel there could be a case of a sustained uptrend that could test the levels of around Rs 225 with an extension to all-time highs of Rs 248-250 created in the year 2011,” said Kanitkar. The stops can be placed around Rs 175 on a closing basis, a bit below the intermediate bottom of Rs 178 created in February 2017.

L&T: BUY| Target Rs 1,615

The charts are showing a series of higher top and higher bottom formations since December 2016, after a sustained correction of 6 months spanning a move from around Rs 1,615 to Rs 1,300.

The current leg sprang up in the form of a gap up from Rs 1,491 on 10th March to Rs 1,517 on 14th March. This move has sustained very well after almost a month’s consolidation between Rs 1,446 and Rs 1,515.

This would in a way open the gates to the 52 weeks high at Rs 1,615 followed by the distribution phase of 2014 around the Rs 1,750-1,800 mark.

Axis Bank: SELL| Target Rs 476| Stop Loss Rs 515

Although the news doing the rounds of a possible merger with Kotak Mahindra Bank seems to have supported the prices for around 2 months, the undertone seems to have remained predominantly bearish.

It happens to be one of the very few stocks to be still trading below the long-term 200-DMA (Daily Moving Average). In fact, the recent move was cut short just near this resistance level of around Rs 525 mark.

The prices are back to their weak self and any rise from here on should be an opportunity to add to shorts or exit existing holdings. The downsides till recent swing low at Rs 476 followed by the previous swing low of Rs 442 would open up.

A stop may be placed a bit above the current 200-DMA placed at Rs 515 on a weekly closing basis.

ICICI Bank: SELL| Target Rs 250| Stop Loss Rs 285

Similar to Axis Bank, the scrip has remained an outright laggard although it governs more than 25 per cent weightage in the BANKNIFTY. While the scrip trades down by 10 per cent from its 52 weeks high, the benchmark BANKNIFTY is within 2 per cent of its 52-week high.

A relative underperformer, ICICI Bank stands within a percent of its swing low of Rs 269. There is a strong chance of prices breaking below the levels and even going down to test the 200-DMA placed at Rs 262.

A sustained weakness may plummet is down to the 250-245 mark. It would be opportune maintain stops around the 285 mark on a closing basis.

(The author is AVP - Technical Research at GEPL Capital. Views and recommendations given in this section are his own and do not represent those of Moneycontrol.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
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Tuesday, 21 March 2017

Nifty to move down dragged by banks, FMCG sectors: Indrodeep Banerjee

Indrodeep Banerjee of InstituteofFinancialAstrology.com is of the view that Nifty to move down dragged by banking, financial, FMCG & shipping sectors under negative astrological influence during the day.

Nifty to move down dragged by banking, financial, FMCG & shipping sectors under negative astrological influence during the day.

Today Sun is in Pisces. Moon is in Sagittarius. Mars is in Aries. Mercury is in Pisces. Venus is in Pisces. Jupiter is in Virgo. Saturn is in Sagittarius. Rahu is in Leo. Ketu is in Aquarius.

This above astrological combination indicates the following influences on the financial market for the day’s session:

Nifty shall become weak and move down during the day’s trading session under negative astrological influence.

Banking, financial, FMCG & shipping sectors will tend to move down under the negative astrological influence during the day’s trading session.

On the previous day Nifty remained weak during the day’s trading session against our astrological forecast for the day.

On the previous day, inspite of weak Nifty, stocks like Bharti Infratel, Aurobindo Pharma, Lupin, Eicher Motors, Bajaj Auto, GAIL, ONGC, NTPC, Tata Power, among Infra, pharma, automobile, oil & gas & power sectors moved up during the day’s trading session in accordance with our astrological forecast.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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Monday, 20 March 2017

Market Live: Sensex, Nifty lower on profit booking; Idea up 15% on Vodafone merger

Idea Cellular rallied nearly 15 percent in early trade following announcement of its merger with Vodafone India.

9:55 am BoAML on Yes Bank: Bank of America Merrill Lynch has maintained its buy call on Yes Bank with increased target price at Rs 1,820 (from Rs 1,600), saying it is a top pick as growth visibility of the bank is strong and margins will have tailwinds.

According to the brokerage house, asset quality is likely to be as comfortable as it has been and retail side can see acceleration of timeline.

BoAML believes capital is not an issue in near-term for 'faster growth leg'. It sees return on equity rising to 23 percent by FY18 on rising return on assets and not just leverage.

9:40 am Power plant commissioning: State-run power producer NTPC today said it has commissioned the second unit of 660 MW of Mouda Super Thermal Power Station Stage-II.

"We wish to inform that 2nd unit of 660 MW of Mouda Super Thermal Power Station Stage-II (2 X 660 MW) has been commissioned," NTPC said in a filing to the BSE.

With this, the commissioned capacity of Mouda Super Thermal Power Station, NTPC and NTPC group has become 2,320 MW, 41,907 MW and 48,873 MW, respectively, it said.

9:30 am Telecom merger: Idea says Vodafone India merger is expected to be completed by 2018. Aditya Birla Group will have the right to buy 9.5 percent stake in the combined entity at Rs 130 per share.

Vodafone will sell shares in the combined company to equalise its shareholding with Aditya Birla Group.

Also read - Buy, Sell, Hold: What stocks and sectors are on analysts' radar today

9:15 am Market Check: Equity benchmarks opened lower on profit booking Monday after a 2.5 percent rally seen last week. Idea Cellular rallied nearly 15 percent in early trade following announcement of its merger with Vodafone India.

The 30-share BSE Sensex was down 98.36 points at 29,550.63 and the 50-share NSE Nifty fell 23.95 points to 9,136.10. About 759 shares advanced against 438 declining shares on the BSE.

The Indian rupee opened with a marginal gain of 6 paise at 65.40 per dollar today against Friday's close of 65.46.

Pramit Brahmbhatt of Veracity said, “The rupee will trade with a positive bias on the back of positive cues from the equity market and strong FII inflow. The trading range for the USD-INR pair is seen between 65.20-65.80/dollar.”

The dollar stayed on the defensive with bulls still nursing a grudge after the Federal Reserve's rate guidance last week proved to be less "hawkish" than many had wagered on.
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Friday, 17 March 2017

Don’t rush to participate in market, choose good fundamental picks: HDFC Sec

Dipen Sheth of HDFC Securities recommends looking for fundamentally strong stocks, even if it means looking outside the index ones. He is upbeat on Repco Home Finance and TeamLease Services.

Bulls took charge on D-Street through the week as the market saw a firm rally. Equity benchmarks have clocked fresh record highs, with the Nifty even touching the 9200-mark on Friday. Domestic inflows were steady on a higher influx of money in equity mutual funds as well.

While the market remains at an all-time high, investors must not be in a hurry to participate but look for good quality stocks, Dipen Sheth, head of institutional research at HDFC Securities told CNBC-TV18 in an interview.

“Most investors will begin to panic on the feeling of being left out,” he said, adding that such investments then drive up the market sometimes. Instead, he says, one must look for fundamentally good picks. There are options available outside of the index as well, he stated.

Among midcaps, there are many good stories coming out of there. “The focus should be on bottom-up stories… there are stocks at good valuations in the space” he told the channel.

Among sector-specific picks, he was upbeat on Repco Home Finance in housing finance. “The stock has multiplied investors’ wealth and there is years of growth still left in the stock,” he said, adding that the firm has mastered the model of lending to non-salaried class. The stock looks attractive at 3 times price/book. Furthermore, he recommends looking at some high-quality NBFCs which are trading at cheaper valuations now.

Sheth is also positive on new age businesses such as TeamLease Services. He expects the company to double earnings before interest, taxes, depreciation and amortisation (EBITDA) over the next two years, driven by growth leverage and improving margins. On the growth front, he foresees many years of 20-25 percent growth as the industry is under-penetrated.

In specialised segments, he cites cases of Navin Fluorine and Vinati Organics, which according to him are high-quality businesses. He recommends looking at such chemical companies with high return on capital employed (ROCE).

Sheth also sees potential in home improvement space. As Indians are increasingly spending big amounts in decorating homes and financing them, plywood firms, housing finance and appliances will perform well.

Detailed transcript of the interview to follow…
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Tuesday, 14 March 2017

Market to see record high opening as investors set to cheer BJP win

Street to cheer ruling party’s scale of victory in Uttar Pradesh, which gives it room for adding more representatives in the Upper House of the Parliament.

Nifty @9000: Party may be over soon, dance very close to the door, says Nilesh Jasani
The market is likely to see a gap-up opening Tuesday as investors cheer the ruling BJP’s clean sweep in the Uttar Pradesh assembly elections, along with victories in three other states that went to polls.

Experts have also not ruled out the possibility of benchmark indices clocking all-time highs as well. They said the market had priced in BJP's victory but the scale could drive the market higher. Trends on SGX Nifty indicate a record high opening on the market.

The Bharatiya Janata Party won state elections in four out of five states that went to polls. The results showed that the popularity of Prime Minister Narendra Modi was still intact, a positive cue for the market, which would help in getting political capital going forward. In UP, the party won its biggest margin in 37 years with a three-fourth majority.

In Asia, markets were trading mixed with investors anticipating a near-certain rate hike from the Federal Reserve on Wednesday. In J, the Nikkei was trading flat in early trade, while South Korea's Kospi was up with modest gains.

Traders will focus on Federal Reserve’s meet on whether to raise interest rates. They will look for clues on how quickly the US central bank is planning to tighten monetary policy.

On Wall Street, markets closed off session lows as traders anticipated an interest rate hike on Wednesday. The S&P 500 closed nearly 1 point higher in its third straight day of gains. Materials stocks led advancers, while health care was the worst decliner.

And in Europe, markets closed higher as political uncertainty dominated and traders geared up for a likely rate hike by the Fed. Furthermore, the UK could press the start button on Brexit negotiations, after a vote in the houses of commons and lords. Prime Minister Theresa May has previously stated that she would begin talks with the EU by the end of March.

Back home, the Street saw a week full of consolidation as it ended up 0.4 percent in the passing week on caution ahead of assembly election results in five states, especially Uttar Pradesh that gives the parliament most number of representatives.

According to experts, however, after the initial rally, the later part of truncated week may see some correction amid consolidation due to Federal Reserve policy meeting on March 14-15 & GST Council meet on March 16.

Among stocks, PSU oil marketing companies will be in focus as they will revise fuel rates next week. Hence, aviation stocks will also be closely watched as aviation turbine fuel rates may be revised.

Alkem Labs may react negatively on Tuesday as it received inspection report from US FDA for Baddi facility with 3 observations. Aarey Drugs will also be in focus as it is proposed to take over API products manufacturer Forel Labs via equity swap after due diligence

Gitanjali Gems may gain strength as its subsidiary Nakshatra World filed a draft red herring prospectus with SEBI. Oil India and Marathon Nextgen will rally as the board of directors will consider share buyback proposal next week.

Crude oil prices hovered near three-month lows on Tuesday in early Asian trading as investors await key reports and data that may shed light on a supply overhang in the global market. Meanwhile, gold prices were steady, with investors waiting for the start later in the session of a two-day US central bank’s meeting.
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Friday, 10 March 2017

Nifty Future to open at 8975, up 19 points: Dynamic Levels

Nifty Future is opening at 8975 as per SGX Nifty at 8:15 am IST, 19 points above its previous close of 8956, says Dynamic Levels. 

Market may remain volatile ahead of Fed Int. policy & UP elections exit poll

Indian Market Outlook: On March, the Indian Benchmark Index Nifty traded in a narrow range of 46 points. Nifty opened at 8915, made a low of 8900 and closed at 8927. The immediate support level of Nifty is at 8860 which is its current month low. The resistance level of Nifty is at 8993.

Bank Nifty too traded in a range of 176 points yesterday, the index made a high of 20780 after making a low of 20604. Bank Nifty closed at 20721, 44 points above its previous day’s close of 20677.

Small Cap Index, yesterday opened at 6600, made a high of 6635, but could not sustain and closed at 6604 after making a low of 6590. The major resistance level of Small Cap is at 6775, which is its all time high.

Nifty Future is opening at 8975 as per SGX Nifty at 8:15 am IST, 19 points above its previous close of 8956.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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