S&P 500 Technical Analysis 21st December 2017

S&P 500

The S&P 500 initially tried to rally during the day on Wednesday, but pulled back to reach towards the 2675 handle underneath. That is an area that caused a bit of a bounce, a thing that I expect to see going forward.

The S&P 500 initially tried to rally during the trading session on Wednesday, but rolled over as the 2700 level above offers significant resistance. We pulled back towards the 2675 handle, an area that offered support, and I think that will continue to be the theme of this market, buying on the dips. I think that the 2650 level underneath is massively supportive, and I think it’s only a matter of time before the buyers get involved and reach towards the upside again. I think that eventually we will break above the 2700 level, and once we do the market should continue to go much higher. If we break down below the 2650 level, that would be very negative sign, but I think as we go into the holidays, traders are willing to sit on the sidelines and simply not trade. The volume will be there, so therefore I think that we probably will get relatively calm trading between now and Christmas.

Ultimately, this is a market that will be thin for a while, and it’s not until we are several days past New Year’s Day that we typically see volume coming back into the market, so therefore it’s probably going to be rather difficult to hang onto trades for any length of time, and as a result being careful and being small with your trading position is probably the best way to take advantage of the situation we find ourselves in. Longer-term, I think that we do rally, but that’s a story for next year.

MORE WILL UPDATE SOON!!

Nifty Bank Outlook for the Week (Dec 18, 2017 – Dec 22, 2017

Nifty Bank closed the week on positive note gaining around 0.50%.

As we have mentioned, last week that support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24500 to 24600 where break out gap for the index is lying. During the week the index manages to hit a low of 24889 and close the week around the levels of 25440.

Support for the index lies in the zone of 25000 to 25100 from where the index broke out of triple top pattern. If the index manages to close below these levels then the index can drift to the levels of 24500 to 24600 where break out gap for the index is lying.

Minor resistance for the index lies in the zone of 25400 to 25500. Resistance for the index lies in the zone of 25900 to 26000 where the index has formed a top in the month of November-2017. If the index manages to close above these levels then the index can move to the levels of 26300 to 26400.

Range for the week is seen from 24800 to 24900 on downside & 25800 to 25900 on upside.   

MORE WILL UPDATE SOON!!

Nifty Outlook for the Week (Dec 18, 2017 – Dec 22, 2017)

Nifty closed the week on positive note gaining around 0.60%.

As we have mentioned last week, that support for the index lies in the zone of 10000 to 10050 where medium term moving averages and low for the month of November-2017 are lying. If the index manages to close below these levels then the index can drift to the levels of 9650 to 9700 where 200 daily moving averages and lows for the month of August-2017 and September-2017 are lying. During the week the index manages to hit a low of 10141 and close the week around the levels of 10333.

Support for the index lies in the zone of 10000 to 10100 where medium term moving averages and break out levels are lying. If the index manages to close below these levels then the index can drift to the levels of 9650 to 9700 where 200 daily moving averages and lows for the month of August-2017 and September-2017 are lying.

Resistance for the index lies in the zone of 10300 to 10400 where break down levels are lying. If the index manages to close above these levels then the index can move to the levels of 10600 to 10700 where trend-line joining highs formed in the month of September-2016 and August-2017 is lying.

Broad range for the week is seen from 10000 on downside & 10600 on upside.

MORE WILL UPDATE SOON!!

Technical View: Nifty forms ‘Bearish Belt Hold’ for second day; keep a stop loss below 10,400

India VIX fell by 0.78 percent to 12.08. India VIX has fallen by 27 percent in the last three sessions and needs to hold below 13-12.50 zones to get the smooth ride.

The Nifty50 which started higher failed to hold gains and corrected throughout the trading day on Thursday and made a ‘Bearish Belt Hold’ kind of pattern for the second consecutive day in a row.

A ‘Bearish Belt Hold’ pattern is formed when the opening price becomes the highest point of the trading day (intraday high) and the index declines throughout the trading day making up for the large body. The candle will either have a small or no upper shadow and small lower shadow.

Formation of Bearish Belt Hold for the second consecutive day in a row suggests a pause in the momentum as index faces stiff resistance around 10,500 levels. The index is trading well above its crucial short-term moving averages, which is a bullish sign.

Even though the index formed a bearish candle for the second consecutive day in a row, traders can still remain long with a stop below 10,400 on a closing basis. Bullish momentum will only continue when index surpasses 10,495 levels.

In Thursday’s price action, Nifty50 opened at 10,473 which was also its intraday high. The bears took control to post the opening tick and pushed the index below 10,450 levels. It closed 3.90 points lower at 10,440.30.

“The Nifty50 registered Bearish Belt Hold formation for the second day in a row as it signed off the day with an extreme rangebound move of 47 points. However, last two session price behaviour is suggesting that market is slowly slipping out of the clutches of bulls,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

Hence, to reclaim their strength back they need to immediately conquer the top of 10,494 levels else bears may tighten their grip over the markets in the near term.

Mohammad further added that traders are advised to remain cautious and maintain a tight stop below 10,400 on closing basis whereas fresh positions should be considered only on a close above 10,494 levels.

On the options front, maximum Put open interest was seen at 10,000 followed by 10,400 strikes while maximum Call OI was seen at 10,500 followed by 10,600 strikes.

Fresh Call writing stood at 10,400 and 10,450 strikes while marginal Put unwinding was seen during the day.

Option band signifies an immediate trading band in between 10,330 to 10,550 zones. The Nifty index remained flattish and was moving in the red and green territory for the most part of the session.

It opened positive but failed to hold its gains and closed the session with the marginal loss of 4 points by forming a Bearish Belt Hold candle for the second consecutive session.

 Nifty has to continue to hold above 10,380 zone to witness an up move towards 10,495 then 10,550 while on the downside supports are seen at 10,330 levels to hold this positive momentum.

MORE WILL UPDATE SOON!!

Multibaggers of 2017! Over 400 stocks created more wealth than you imagined

Among the Nifty constituents, Bajaj Finance rose over 100 percent followed by Indiabulls Housing Finance which rallied 83 percent, and Tata Steel which climbed 81 percent so far in the year 2017.

It is difficult to generate wealth in equity markets especially in the short term but the year 2017 has been a rewarding one for the bulls. The benchmark indices hit fresh record highs with the S&P BSE Sensex hovering near Mount 34K and Nifty near 11K levels.

But, the real winners of 2017 are not the indices, it's individual stocks which stole the show. As many as 470 stocks on the BSE rose up to 1200 percent so far in the year 2017. Three stocks including HEG, Indiabulls Ventures, and SORIL Holdings rose over 1000 percent each in the last 12 months.

As many as 120 stocks rose between 200-900 percent in the last 1 year which includes names like Graphite India, Yuken India, Rain Industries, Venky’s (India), Avanti Feeds, v2 Retail, Bharat Seats, Kolte Patil, and Phillips Carbon etc. among others.

And, as many as 347 stocks more than doubled investors wealth in the same period which includes names like Jaypee Infratech, V-Guard Industries, Lux Industries, Bajaj Finance, Vadilal Industries, Prabhat Dairy, Punjab Alkalies etc. among others.

The S&P BSE 500 index outperformed the S&P BSE Sensex so far in the year 2017 by a good margin which was propelled by gains in small and midcap stocks such as Indiabulls Ventures, Graphite India, Rain Industries, Avanti Feeds, Minda Industries, Future Consumer, DCM Shriram, Vakrangee, Motilal Oswal Financial Services etc. among others.

The S&P BSE Midcap and Smallcap index which has been hitting record highs in the run-up to the year 2018 is likely to continue with the momentum, feel experts but the move would be gradual.

Most experts are looking for a quiet 2018 and await earnings recovery as most of the stocks in the broader market are trading above their long-term averages.

The moves would remain quiet gradual and that would in a way weed out the worse from the good lots. In line with the view on the benchmarks, we feel the broader markets (read as midcaps & smallcaps) would perform with their natural Beta.

As such the midcaps & smallcaps would continue to rally. A gradual rally with intermediate corrections is what we except that would give rise to both sectoral as well as stock specific churning. Thus the worse may get pushed off, while the good amongst the lot would be met with incremental demand.

Benchmark Indices

The S&P BSE Sensex and Nifty50 have rallied by about 26 percent so far in the year 2017. The index managed to climb all wall of worries in the year 2017 and is all set to enter 2018 on a bullish note.

The Nifty might not see a runaway rally in the year 2018 but could well climb up to 12000, suggest experts. “Rerating of the companies is on the cards, and expected NIFTY EPS growth of 15-17% in FY19, a number of 12000 in Nifty 50 by December 2018 is not achievable.

At the same time, instead of looking at Nifty numbers, we are of the view that one should invest in a diversified equity portfolio. Careful stock picking and being overweight on equity as an asset class would yield the investors higher double-digit returns in near future

Among the Nifty constituents, Bajaj Finance rose over 100 percent followed by Indiabulls Housing Finance which rallied 83 percent, and Tata Steel which climbed 81 percent so far in the year 2017.

The S&P BSE Sensex which added over 7000 points so far in the year 2017 could rally marginally by about 2000 points to claim Mount 36K in the year 2018, suggest experts.

As of now, there is a strong support around 31500-31000 levels and as long as these supports hold on monthly closing basis analysts see Sensex heading higher towards 36000, but not without some consolidation.

For Sensex, we are looking at over 36500 levels while we have Nifty Target at around 11,700 zones. We are expecting these levels but we are also expecting a 10 percent correction in valuations prior to that.

 GEPL Capital sees Sensex at 36000 and Nifty around 11,200-11,500. They remain cautious at higher levels, a 10-15% rise from current level may not be an uphill task for the market. The move thus would still remain in line with the long-term averages of growth in the Indian markets,

Among the Sensex constituents, Maruti Suzuki, Tata Steel rose by over 80 percent each, followed by Bharti Airtel which rallied 71 percent, RIL gained 70 percent while HUL rose 59 percent in the same period.

MORE WILL UPDATE SOON!!

Sensex closes flat; but Nifty Midcap at record close, up for 6th consecutive session

The Nifty Midcap and BSE Smallcap indices gained 1 percent each on strong breadth. About two shares advanced for every share falling on the NSE.

 

It was another dull day for the market as equity benchmarks closed flat amid volatility on Thursday, tracking mixed global cues; but the broader markets continued to move northward for sixth consecutive session.

Private banks, auto and FMCG stocks were under pressure while technology, metals and pharma stocks gained.

The 30-share BSE Sensex was down 21.10 points at 33,756.28 and the 50-share NSE Nifty fell 3.90 points to 10,440.30.

The sideways trade along with low volumes is expected to continue for couple of weeks as it is generally a holiday period for foreign investors on Christmas and year-end, experts suggest.

With no major event in sight, keep a close watch on global developments for further cues. Despite recent run-up, midcap and smallcap space have still lot to offer.

The Nifty Midcap index ended at record closing high, up 1 percent and rising 5 percent in six consecutive sessions. About two shares advanced for every share falling on the NSE.

Traders should focus more on stock selection now, Manglik advised. "We may see marginal dip in Nifty in next session and suggest using it as buying opportunity," he said.

DB Realty (locked at 20 percent upper circuit), Unitech (up 12 percent), Sun TV Network (4.5 percent) and Reliance Communications (4 percent) reacted strongly to 2G spectrum case verdict.

Reliance Infrastructure rallied 8 percent on closing the deal for Mumbai power business sale with Adani Transmission that surged 10 percent.

L&T was up 2 percent after Motilal Oswal has maintained buy rating on the stock with a target price at Rs 1,440 (implying 19 percent upside), citing likely pick up in domestic execution in second half of FY18 as GST impact tapered off.

Mahindra and Mahindra fell 3.7 percent as the stock adjusted for bonus share issue in the ratio of one share for every share held. Castrol India and Balkrishna Industries fell 3 percent each, but Vakrangee gained 4 percent as these stocks also adjusted for bonus share issue (1:1).

Maruti Suzuki, Bajaj Finance, HUL, HPCL and Bharti Airtel among others were down 1 percent each whereas HDFC, Infosys, HCL Technologies, Tata Steel, Hero Motocorp and Hindalco were up 0.5-2 percent.

Wockhardt jumped nearly 12 percent as the drug maker will be offering its Waluj facility near Aurangabad, Maharashtra in early 2018 for US FDA inspection.

Reliance Nippon Life Asset Management gained nearly 3 percent after CLSA has initiated coverage with Buy rating and Ajanta Pharma was also up 3 percent after Motilal Oswal has maintained Buy call with increased target price at Rs 1,790 (from Rs 1,606).

Ramco Cement fell 2 percent after Deutsche Bank downgraded the stock to hold from buy and slashed target price to Rs 750 from Rs 790 as weak demand and prices in South Indian affected medium-term outlook.

Pincon Spirit fell 7 percent after market regulator Sebi has ordered forensic audit of the company to check misuse of funds.

On the the global front, Asian markets ended mixed after the passage of a comprehensive US tax bill. European markets stocks were flat with a positive bias at the time of writing this article.

MORE WILL UPDATE SOON!!