STOCKS TO BUY FOR INTRADAY: 22nd January 2018

BUY DELTACORP (NSE Code) BUY ABOVE 340 AFTER COOLING PERIOD. 

SIGNAL : PREVIOUS TOP CROSSED WITH INCREASED VOLUME. Stop Loss : 320 Target : 356 (Short term)

HOT BUZZING STOCKS (22.01.2018)

NSE SYMBOL        CLOSING RATE

HEG                           2774.85

GALLISPAT               353.85

RELIGARE                   52.25

NAGREEKCAP            47.15

Stock to Buy Tips for 22nd January 2018

MORE WILL UPDATE SOON!!

Jubilant Food likely to rally to Rs 2,350, NIIT Technologies may test Rs 700:

 If you see since March, it has been trading between Rs 40 and Rs 50. I think with IT coming back, the plethora of choices you have – you can do much better than Zee Learn. So I would move on.

One can use a break even stop loss in UPL. I think it has completed its correction. Around Rs 802 or thereabouts is the 200-day moving average (DMA), I think once it starts and you get a bit of agri-Budget etc, you could easily see levels of Rs 900 coming back. So this is a good point to enter a stock after it has been through a large correction.

The only problem in RCF is that in the past Rs 125-130 has acted as some kind of resistance and being public sector undertaking (PSU) etc, it tends to remain rangebound but fertiliser stocks are flying. Look at GSFC, Chambal Fertiliser, Deepak Fertiliser, so maybe one can move into one of those private sector. In Coromandel International we saw it at Rs 170-180, today that is at Rs 560, so those are the kind of stocks you have to get in.

RCF has had its run. Now Rs 15-20 higher, it will start getting into resistance. These stocks have limited kind of scope, so try to get into a private fertiliser stocks.

Jubilant Food is now breaking into multi-year highs. The previous high was about Rs 1,960. So now above Rs 1,960, you open up a Rs 1,200 point upside. That may not happen immediately but definitely new highs means that everybody who has ever bought Jubilant is now profitable. So again the same story repeats that the supply dries up. So I would see a very quick rally to Rs 2,300-2,350.

NIIT Technologies is a different case. The entire sector, entire space is looking positive and this is the first quarter of good results. My sense is NIIT Tech could also move up to Rs 650-700. So midcap IT, I think the good time is probably just beginning.

MORE WILL UPDATE SOON!!

Dow Jones 30 and NASDAQ 100 Price Forecast January 22, 2018, Technical Analysis

The US stock markets continue to show a “buy on the dips” mentality, and I believe that the Dow Jones 30 and the NASDAQ 100 are showing that. In a twist, it appears that the NASDAQ 100 is going to take the lead, which is something that it had not done for some time.

  

Dow Jones 30

The Dow Jones 30 initially tried to rally during the Friday session, but as you can see we pulled back a little bit to try to find buyers. I think eventually the buyers will return, and I think that we will go to the 26,150 level. There is a significant amount of bullish pressure underneath, and therefore I think it is much easier to buy this market than to sell it. In fact, I have no scenario in which a willing to sell the market right now, as corporate earnings continue to do quite well. A shrinking US dollar of course helps exports, as goes the typical correlation.

NASDAQ 100

The NASDAQ 100 initially tried to rally during the Friday session but then turned around to pull back as we reached a fresh, new high. The 6850 level is a bit resistive, and a pullback at that point looked reaching towards the uptrend line, an area that seems to be very supportive. Looking at the up trending line, it forms an ascending triangle, and that tells me that the market is trying to rally. Beyond that, the hourly chart is crossing over just above the oversold condition, so I think we will eventually break out and go looking towards the 6900 level. I recognize that these pullbacks offer value, just as the algorithmic traders have programmed their robots to deal with this market.

MORE WILL UPDATE SOON!!

S&P 500 Price Forecast January 22, 2018, Technical Analysis

The S&P 500 has been very volatile as of late, but Friday was bullish, as it looks likely we are going to go much higher. The 2810 level is an area that continues to attract a lot of attention, but it appears that we are trying to build up the necessary momentum to finally go higher.

The S&P 500 rallied during the Friday trading session, as we continue to see the 2810 level offer significant resistance. If we can break above there, the market should then go higher, perhaps reaching towards the 2825 level, and then eventually the 2850 level. Short-term pullbacks should continue to offer buying opportunities, and I believe that the market will find plenty of support at the 2790 handle underneath, as we continue to see a lot of interest around the level. I think that ultimately the market should continue to go to the 2850 level longer term, but it is going to take a while to get there.

If we were to break down below the 2775 handle, then I would be a seller of this market, but I don’t think that’s going to happen, at least not in the short term. There seems to be a lot of a “buy on the dips” mentality out there, as algorithmic traders are willing to pick up anything close to a 1% drop. The tax reform, the corporate gains, and of course the global expansion continues to push the S&P 500 higher. The US dollar falling also helps with exports, so that’s yet another reason that this market continues to attract money. With repatriation of funds from overseas, many major companies are going to be buying their own stock back, and that of course will lift this market as well.

MORE WILL UPDATE SOON!!

Nifty Bank Outlook for the Week (Jan 22, 2018 – Jan 25, 2018)

EquityPandit’s Outlook for Nifty Bank for the week  (Jan 22, 2018 – Jan 25, 2018):

NIFTY BANK:

Nifty Bank closed the week on positive note gaining around 4.60%.

As we have mentioned, last week that 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. During the week the index manages to hit a high of 26958 and close the week around the levels of 26942.

Minor support for the index lies in the zone of 26300 to 26400. Support for the index lies in the zone of 25700 to 25800 where break out levels and short term moving averages are lying. If the index manages to close below these levels then the index can drift to the levels of 25000 to 25100 from where the index broke out of triple top pattern.

Resistance for the index lies in the zone of 27100 to 27200 where target for the break out is lying. If the index manages to close above these levels then the index can move to the levels of 27400 to 27500 where trend-line joining earlier highs is lying.

Range for the week is seen from 26400 to 26500 on downside & 27400 to 27500 on upside.

MORE WILL UPDATE SOON!!

Nifty Outlook for the Week (Jan 22, 2018 – Jan 25, 2018)

Equityandit’s Outlook for Nifty for week (Jan 22, 2018 – Jan 25, 2018):

NIFTY:

Nifty closed the week on positive note gaining around 2.00%.

As we have mentioned last week, that resistance for the index lies in the zone of 10600 to 10700 where trend-line joining highs formed in the month of September-2016 and August-2017 is lying. If the index manages to close above these levels then the index can move to the levels of 10900 to 11000. During the week the index manages to hit a high of 10907 and close the week around the levels of 10895.

Support for the index lies in the zone of 10600 to 10700 from where the index broke out of trend-line joining highs formed in the month of September-2016 and August-2017 is lying. If the index manages to close below these levels then the index can drift to the levels of 10350 to 10400 where break out levels and short term moving averages are lying.

Resistance for the index lies in the zone of 10900 to 11000. If the index manages to close above these levels then the index can move to the levels of 11200 to 11300.

Broad range for the week is seen from 10600 on downside & 11200 on upside.

MORE WILL UPDATE SOON!!

RIL could hit record highs on Monday; 10 takeaways from Q3 results

The stock is just 3 percent short of its record high of Rs 959.50. RIL has already rallied nearly 80 percent in the last one year.

 

Oil & gas major Reliance Industries reported results were mostly ahead of analyst expectations on D-Street on Friday, led by beat in petchem, digital business (Jio), and retail. The stock, which is trading near record highs, closed 1.2 percent higher at Rs 931 on the NSE.

Tracking the results, most analysts expect the stock to open higher when trading resumes on Monday and possible rally to a fresh record high in the coming week.

The stock is just 3 percent short of its record high of Rs 959.50. RIL has already rallied nearly 80 percent in the last one year.

Sanjiv Bhasin of IIFL in an interview to CNBC-TV18 said that GRMs at USD 11.6/bbl is largely in line. Overall, the numbers are in-line and ahead of estimates what we calculated.

Commenting on the stock, Bhasin said that if something can take you to 11,000 on the Nifty, I think it will be RIL. The IUC cut has been very poorly received by Bharti Airtel and Idea but will be a big blessing for Jio. Going forward, RIL will not be a laggard and if Nifty hits 11,000, RIL will be at Rs 1000, which could happen in next 3 days or a week, but is definitely on cards.

SP Tulsian of sptulsian.com in an interview to CNBC-Tv18 said that no analyst would have thought that Jio would report PAT in FY18 which we have seen in case of Q3. Having posted an EBITDA of Rs 2,628 crore with a Rs504 crore is a blast for Reliance Jio and will cheer markets going forward.

Commenting on the stock movement, Tulsian said that I will not be surprised to see the share moving into four digits ahead of the Budget or maybe in the coming week.

We have collated top 10 takeaways from RIL Q3 results:

Net Profit

RIL reported a consolidated net profit of Rs9423 crore for the quarter ended December 2017, up 16.2 percent QoQ compared to Rs8109 crore reported in the previous quarter and Rs7533 reported in the year-ago period. On a standalone basis, RIL reported a net profit of Rs8454 crore.

Net Revenues

RIL achieved revenue of Rs109,905 crore (USD 17.2 billion), an increase of 30.5 percent as compared to Rs84,189 crore in the corresponding period of the previous year.

The increase in revenue is primarily on account of volume increase with the start-up of petrochemicals projects and increase in prices in refining and petrochemical businesses.

The increase in consolidated revenues reflects robust growth of 116% in Retail business and continued enhancement in Jio’s wireless operations.

Operating Profit

Operating profit before other income and depreciation increased by 52.0 percent to Rs17,588 crore (USD 2.8 billion) from Rs11,574 crore in the corresponding period of the previous year.

Strong operating performance was driven by growth in petrochemicals, retail and digital services businesses along with firm refining margins.

Cash on Books

Cash and cash equivalents as on 31st December 2017 were at Rs78,617 crore (USD 12.3 billion) compared to Rs77,226 crore as on 31st March 2017. These were in bank deposits, mutual funds, CDs, Government Bonds and other marketable securities.

Capital Expenditure

The capital expenditure for the quarter ended 31st December 2017 was Rs17,336 crore (USD 2.7 billion) including exchange rate difference capitalization.

Capital expenditure was principally on account of Digital Services business, the balance of expenditure for projects in the petrochemicals and refining business at Jamnagar and in Organized Retail business.

Refining

Revenue from the Refining and Marketing segment for the quarter ended December 2017 increased by 23 percent on a YoY basis to Rs75,865 crore (USD 11.9 billion) aided by 24 percent higher Brent oil prices.

The segment EBIT marginally decreased by 0.5 percent on a YoY basis to Rs6,165 crore (USD 1.0 billion).

GRMs

Gross Refining Margins (GRM) for 3Q FY18 stood at USD 11.6/bbl as against USD 10.8/bbl in 3Q FY17. RIL’s GRM outperformed Singapore complex refining margins by USD 4.4/bbl.

Petrochemicals Business

The revenue from the Petrochemicals segment for the quarter ended December 2017 increased by 47.6 percent on a YoY basis to Rs33,726 crore (USD 5.3 billion) due to higher volumes and prices.

Petrochemicals segment EBIT was at a record level of Rs5,753 crore (USD 901 million) supported by strong volume growth, higher margins for Polypropylene and downstream polyester products. The volume growth was led by the world’s largest ROGC coming on-stream along with downstream LDPE, LLDPE and MEG plants.

Reliance Jio

Reliance Jio posted a Q3 profit at Rs 504 crore and EBITDA grew by 82 percent to Rs 2,628 crore QoQ. Jio continues its rapid ramp-up of subscriber base and as of 31st December 2017, there were 160.1 million subscribers on the network.

This makes it India’s largest wireless data subscriber base, with the gap widening from the other operators. With gross additions of 27.8 million during the quarter, Jio continues to have a dominant share of all the new LTE smartphones sold in the country.

Reliance Retail

Revenues from the retail segment for the 3Q FY18 grew by 116.4 percent on a YoY basis to Rs18,798 crore compared to Rs8,688 crore reported in the year-ago period.

PBDIT for 3Q FY18 grew by 82.0 percent on a YoY basis to Rs606 crore from Rs333 crore reported in the year-ago period. Reliance Retail witnessed stellar performance across all consumption baskets during the period.

MORE WILL UPDATE SOON!!

Planning to enter markets in the year 2018? Don’t overlook these 5 factors

We are starting to see a bottoming out of corporate earnings in India, and expect the earnings to rise in second half of FY18 and pick-up more meaningfully in FY19.

2017 has been a good year for equity markets, helped by record high institutional flows from domestic mutual funds, and also a recent pick-up in foreign portfolio investor (FPI) flows.

The calendar year 2017 up till November, mutual funds registered net equity inflows of the equivalent of around over USD 17 billion, while foreign portfolio investors (FPIs) recorded net equity inflows of around USD 9 billion over the same period.

Over the past 3 years, mutual fund equity flows have been around 2.5X FPI flows into equities, indicating the growing importance of domestic investor’s participation in the Indian markets.

Investors have also been gradually shifting from traditional physical assets to financial assets, and this has especially picked up pace post de-monetization.

Some of the reforms of the government have started bearing fruit, with India’s ranking jumping by 30 places in World Bank’s Ease of Doing Business 2018 rankings, from 130 in the previous year to 100 in this year—making it the biggest jump for any country in this year’s rankings.

Some of the key things to look out for in 2018 are as follows:

Corporate earnings revival:

We are starting to see a bottoming out of corporate earnings in India, and expect the earnings to rise in second half of FY18 and pick-up more meaningfully in FY19. The markets will be closely tracking this, as it has already priced in this revival. Any disappointment on this front may pose headwinds for the markets in the near term.

Market valuations seem to have priced in recovery in earnings growth:

With corporate earnings being muted over the past few fiscal years, the rise in equity markets has been helped by PE expansion.

Currently, the market is trading above its long-term average, although on certain other metrics like P/B ratio and Market Cap to GDP ratio—the markets look fairly valued.

Certain segments like mid/small-caps, which have outperformed over the past few years, are presently trading at significant premium to large-caps and investors should review their asset allocation in this space.

Economic growth on recovery path:

India had seen some deceleration in economic growth over the past year, but we expect growth to gradually pick-up over the coming year, led by pick-up in consumption and also a gradual recovery in investment.

GDP & GVA growth picked up in Q2 FY18 from multi-year lows, and we expect the recovery to continue, helped by various reforms by the government bearing fruit.

Although the capex cycle remains currently in doldrums, we expect the PSU bank recapitalization initiative to contribute to a pick-up in credit growth, which could trigger a capex recovery over the coming quarters.

Concerns about fiscal slippage this year is keeping interest rates high:

We expect the interest rate cycle to have bottomed out in India unless inflation and economic growth surprise significantly on the downside. Rising crude oil prices, and any fiscal slippage pose some upside risk to inflation, along with the implementation of salary and allowances hike by the state government.

On the fiscal front, the deficit has reached 96 percent of the budgeted estimate for the full year during the first 7 months of FY18 (April-October 2017), compared to 79 percent in the year-ago period.

State fiscal deficits have been rising and there is some concern about fiscal slippage due to GST rate cuts, and the PSU bank recapitalization initiative. Current account deficit (CAD) is also expected to rise in FY18, compared to FY17, due to rising trade deficit.

An eye needs to be kept on movement on crude prices, which may pose some pressure on CAD for an oil-importing country like India. However, even if there is any slippage, we expect fiscal deficit and current account deficit to remain within the comfort zone, and not be a major disruptive factor for markets.

Globally, the easy monetary policy is on its way out:

Major central banks have started to tighten monetary policy or withdraw policy stimulus, as global growth and inflation pick up. As expected, the US Fed hiked rates in its December 2017 policy and expects three rate hikes in 2018.

The Fed had also started to unwind its balance sheet from October this year. Thus, investors need to keep an eye on global monetary policy and any pick up in pace in monetary tightening or hawkish signals by the central banks may pose some risk to flows into emerging markets, thereby causing some headwinds to the Indian markets as well.

In a nut-shell, we expect economic growth to pick-up in India, accentuated with a revival in the corporate earnings cycle, which would augur well for the markets over the medium to long-term.

However, investors need to moderate their return expectation from equities in 2018 compared to 2017, as some of the positives, seem to be priced in, and we need to give time for corporate earnings to catch-up.

Over the long term, market returns will reflect GDP growth and corporate earnings growth, and therefore investors should carry on investing in a disciplined manner to build wealth through the compounding effect of equities.

After all, legendary investor Peter Lynch had once said—“In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.

More Will Update Soon!!

Market Week Ahead: Earnings, F&O expiry among 10 things to keep investors busy

The market is expected to continue its liquidity-driven rally on earnings recovery hope and ahead of Budget 2018 (which will be presented on February 1) in the coming truncated week as well.

The bulls seemed unstoppable as the market continued its record-hitting spree in the first three weeks of the current calendar year, even in the face of rising crude oil prices.

Encouraging earnings numbers, a cut in GST rates on 83 goods and services, favourable global cues, buzz on allowing 100 percent FDI in the banking sector, and easing of fiscal deficit worries after lowered borrowing requirements, have driven the Nifty above the 10,900 level and the Sensex above the 35,500-mark for the first time ever.

In the passing week, the 50-share NSE Nifty rallied 2 percent to end at a fresh all-time closing high of 10,894.70 and the 30-share BSE Sensex jumped 2.66 percent to 35,511.58, taking year-to-date (2018) gains to 3.5 percent and 4.3 percent, on top of the 29 percent and 28 percent rallies in 2017, respectively.

Not only benchmark indices, but even the Nifty Bank index ended at a new closing high of 26,909.50, rising 4.5 percent during the week and taking total three-week gains to 5.4 percent on top of a 40.5 percent jump in the previous year.

However, the Nifty Midcap and BSE Smallcap indices underperformed equity benchmarks, falling nearly 2 percent and 3 percent in the week, respectively.

The market is expected to continue its liquidity-driven rally on hope of earnings recovery and ahead of Budget 2018 (which will be presented on February 1) in the truncated week ahead, but there could be some volatility due to expiry of January futures and options contracts on Thursday, experts suggested. Stocks specific action may continue ahead of Budget, they felt.

"Market is anticipating a sea change in the earnings trend starting from Q3 result. This is an extension of the marginal improvement we had seen in Q2. In Q2 adjusted PAT grew by about +4-5 percent for indices like Nifty50 & Sensex. And this time market is anticipating a strong growth of 15-20 percent in PAT led by revamp in businesses and low base effect. Economic data like WPI, IIP and PMI also suggesting improvement in pricing and volume growth. This trend is expected to improve to FY19-20, a main reason for the market to be buoyant," said Vinod Nair, Head Of Research at Geojit Financial Services.

He further said that for the week ahead, the market would closely watch the progress of Q3 results, which will dictate the overall trend of the market, while volatility may be heightened due to F&O expiry next week.

On the global front, developments in US over passing a spending bill to avoid a government shutdown as well as oil prices would also be closely watched out for, Teena Virmani, Vice-president – Research at Kotak Securities said.

The market will remain shut on Friday for Republic Day.

Here are 10 key things to keep investors busy next week:-

Earnings

Earnings season, so far, have been encouraging and also cheered the market from the start of the year. According to experts, Q3 and Q4 are set to dictate the FY19 earnings trend.

About 200 companies will announce their December quarter earnings in the coming week. Important ones amongst them are Maruti Suzuki, Axis Bank, Dr Reddy's Labs, Asian Paints, Havells India, RBL Bank, United Spirits, Canara Bank, InterGlobe Aviation, Idea Cellular, Mahindra & Mahindra Financial, Biocon and JSPL.

Reliance Industries and Wipro

The first on coming Monday, the market will react to Reliance Industries and Wipro's earnings that unveiled on Friday after market hours.

The flagship company of Reliance Group on consolidated basis reported a 16 percent profit growth quarter-on-quarter, driven by petrochemical business and Jio that reported its first ever profit at Rs 504 crore in Q3 against loss of Rs 271 crore in previous quarter. Gross refining margin was on expected lines at USD 11.6 a barrel QoQ in Q3.

Wipro's December quarter numbers missed analyst expectations as IT services dollar revenue growth was flat with EBIT falling 14 percent and margin contracted 250 basis points quarter-on-quarter, though the company said adjusted for one-time (provision of Rs 317 crore w.r.t a customer), margin stood at 17.2 percent that was slightly above analyst estimates of 17.1 percent for the quarter.

Maruti Suzuki

Overall for auto companies, December quarter earnings are expected to be strong on low base of last year due to demonetisation.

In particular, Maruti Suzuki, which is one of top picks (among largecaps) of majority of brokerage houses domestically as well as globally, will announce third quarter earnings on Thursday.

Brokerage houses expect the auto major's Q3 profit growth in the range of 13-24 percent and revenue growth around 13-16 percent. Operating profit growth is estimated at 19-25 percent YoY. Volume growth of more than 11 percent during the quarter driven by Baleno, Brezza and newly launched Dzire is likely to drive earnings.

Axis Bank

On coming Monday, country's third largest private sector lender is expected to report 22 percent growth YoY in profit and 4 percent in net interest income for quarter ended December 2017, according to average of estimates of analysts polled by CNBC-TV18.

Some brokerages are expecting big growth in profit due to low base in year-ago quarter. Loan growth is likely to be driven by retail business. Majority of them expect Q3 slippages to be lower than Q2FY18.

F&O Expiry

All January futures & options contracts will expire on coming Thursday and traders will roll over their positions to next month.

On the options front, maximum Put open interest was seen at 10500 followed by 10700 strikes while maximum Call OI was at 11000 followed by 10800 strikes, which indicated that 10,500 could be the support level and 11,000 could be resistance level for the Nifty in January series.

Significant Put writing was seen at 10800 and 10700 strikes which are shifting its support to higher levels whereas Call Unwinding was seen in all immediate strike prices.

“Option band signifies a trading band between 10,800 to 11,000 zones for the expiry,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.

“It surpassed its supply trend line and now the same is acting as a support zone to push the market to higher levels. Now it has to continue to hold above 10,780-10,800 zones to extend the rally towards psychological 11,000-11,050 zones while on the downside supports are seen at 10,700 and 10,666 levels,” he said.

Technical Outlook

The 50-share NSE Nifty, which ended the passing week at fresh record closing high, made a strong bull candle on the daily candlestick charts.

For the coming week, analysts advise investors to remain long with a strict trailing stop loss below 10,790 as they expect strong upside momentum to continue next week and next target for the index to be 11,000 which is also its crucial resistance level.

"The indications of momentum oscillators and underperformance of broader indices are signaling a euphoric upmove in the market. The upside targets of Nifty could be around 11,000 and next 11,115 levels, which could be achieved in the next 1-2 weeks," Nagaraj Shetti, Technical Research Analyst, HDFC securities said.

Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in also said on such a breakout, a modest target of 11,100 looked certain.

However, as the market is entering into a truncated week with technical oscillators in steeply overbought zone, profit booking in next trading session can’t be ruled out, acccording to him.

IPOs and Listing

Apollo Micro Systems, which caters primarily to the defence and aerospace sectors, will debut on exchanges on coming Monday. The final issue price is fixed at higher end of price band of Rs 270-275 per share.

The Rs 156-crore issue saw a whopping oversubscription of 248.51 times during January 10-12, 2018.

Total six SME IPOs (three each on BSE and NSE) will open for subscription in the coming week and one will end on Monday.

Stocks in Focus

ONGC is going to acquire government's 51.11 percent stake in HPCL at Rs 473.97 per share. The acquisition which costs Rs 36,915 crore to ONGC, is expected to complete by January-end. After this deal, the government has revised its FY18 divestment target upward approximately Rs 92,000 crore, from Rs 72,500 crore earlier.

Dr Reddy's Labs will be in focus as the US Federal Court has imposed USD 5 million penalty for distributing prescription drugs in blister packs that were not child resistant.

DCM Shriram's consolidated net profit in Q3FY18 increased sharply 56 percent year-on-year to Rs 212.9 crore and revenue grew by 30.6 percent to Rs 1,783.7 crore while operating profit shot up 74.5 percent to Rs 329.1 crore and margin expanded by 465 basis points to 18.46 percent compared to year-ago.

Godawari Power & Ispat has posted consolidated profit at Rs 73.7 crore for December quarter against loss of Rs 9.6 crore in year-ago. Revenue increased 58 percent year-on-year to Rs 672.1 crore and operating profit grew by 88 percent to Rs 169 crore with margin expansion of 409 basis points YoY. The board of directors has approved company's proposal to raise Rs 500 crore via equities, GDR, ADRs and FCCB.

Gruh Finance, which surged 16 percent on Friday, showed a 28 percent growth in Q3 profit and 12.5 percent in revenue YoY. Operating profit grew by 16 percent and margin expanded by 282 basis points during the quarter YoY.

Hindustan Oil Exploration may react positively to its earnings as profit grew by a whopping 207 percent year-on-year to Rs 12.9 crore and revenue by 144 percent to Rs 13.4 crore for December quarter.

Lux Industries has reported a 31 percent year-on-year growth in profit at Rs 18.44 crore and 29 percent growth in revenue at Rs 297.4 crore for quarter ended December 2017.

J Kumar Infraprojects has received letter of acceptance from Delhi Metro Rail Corporation (DMRC) for Line 2A Architectural Station on Dahisar (east) to DN Nagar Corridor of Mumani Metro Rail Project, which is worth Rs 57 crore.

HDFC Standard Life has reported nearly 15 percent growth in Q3 profit at Rs 207 crore and its net premium grew by 19.5 percent to Rs 5,420 crore compared to year-ago quarter.

Future Retail will acquire Travel News Services for Rs 100 crore, which will help the company to expand its presence at airports, metro stations and universities where the majority of retail outlets of TNSI and TNSI Retail are operating.

CRISIL upgraded DLF's long term/non-convertible debentures rating to A+/stable from A and short term debt rating to A1 from A2+, removing from 'Rating watch with developing implications'.

IFCI said the government was considering capital infusion of Rs 100 crore during the financial year 2017-18 to the company.

Global Cues

Two major central banks - Bank of Japan and European Central Bank - will announce rate decision on Tuesday and Thursday, respectively. Economists largely expect status quo on interest rates but commentary will be closely watched, especially related to winding down stimulus program.

Apart from central banks' monetary policy decisions, Japan's manufacturing PMI for January, and Europe & US' manufacturing & services PMI for January will be released on Wednesday.

The US will announce its initial jobless claims data for the week ended January 19 and new home sales on Thursday, and Q4 GDP data on Friday.

MORE WILL UPDATE SOON!!

Call Ratio Backspread in Nifty is an ideal strategy to generate wealth in rising market

Massive short covering by call writers at 10600 and 10700 strike of approximately 2 million shares boosted the momentum on the higher side.

The Bulls remained completely in charge last week as indices made a new all-time high. Both Nifty and Bank Nifty trades at barely any distance from the landmark of 11,000 and 27,000 respectively.

The Nifty surged higher by 2 percent while Bank Nifty outperformed with a massive gain of 4.5 percent week over week. Also, stock specific activity was witnessed in index stocks owing to Q3 results.

Future data suggests incremental long built-up of 6.5 percent in the Nifty Jan Future while Bank Nifty saw incremental built-up of 18 percent in last week accelerating the momentum on the upside.

Options statistics for the last week shows aggressive Put activity in strikes of 10700 to 10900. Approximately 5 million shares were added in 10800 PE while 3mn shares were added in 10700 PE and 10900 PE signifying support shifting higher.

Massive short covering by call writers at 10600 and 10700 strike of approximately 2 million shares boosted the momentum on the higher side.

Further, insights on options data depict resistance which remains relatively lighter with the max being at 11000 CE with OI of 5.4 mn shares followed by 11100 of 28 mn shares while Put accumulation in the zone of 10700-10900 stand at ~1.7 cr. supporting the positive bias. Strike wise PCR OI stands above 2 for 10700 and below strikes.

Further decoding weekly Participant activity it reveals that foreign institutional investors (FIIs) were net sellers in the index futures of Rs878 crore with net 4878 contracts added on the short side.

However, they created a bullish bet on Index Options synthetically by adding net 117991 contracts on the Synthetic long side (Call Long+ Put Short).

On the other end, Retails (Client) were net long of 34751 contracts in Index futures while took bearish view via. options by adding net 184418 contracts on the synthetic short side  (Long Put + Short Call).

India VIX, a barometer of risk, continues to gyrate in the band of 12-14% reconfirming the strength in trend. However, with Union Budget lined up shortly it’s recommended to go with hedge strategies and avoid naked short on volatility.

Considering strong upward momentum in the market with base formation along with weak resistance, Low-Risk Bullish Strategy: Call Ratio Backspread is suggested on Nifty.

Call Ratio Backspread is a Bullish Strategy that’s executed using a combination of ITM and ATM options. One needs to buy 10900 CE 2 lots. However, to compensate the premium outflow we should sell “In the Money” Call option of 10850.

Maximum profit is unlimited on upside above 10980 while maximum loss is when the Nifty expires at 10900. Rising volatility is beneficial for the strategy. Time decay is generally harmful when stock remains at the level of buy strike and helpful when the stock is surging higher.

MORE WILL UPDATE SOON!!

Budget 2018: Afraid of volatility? Here is how to position yourself ahead of the big event

The index appears to be in a classic melt-up phase with a little concern for valuations.

 

It has been a roller coaster ride for the bulls in the second week of January. The index rose to fresh record highs and rose 2% for the week ended 19 January? Do you think the momentum will continue?

The index appears to be in a classic melt-up phase with a little concern for valuations. Interesting thing is that laggards like IT and Pharma have also started contributing thereby strengthening the bullish sentiment further.

Even ICICI Bank and Axis Bank have also suddenly discovered life and vying to make new life time highs. Most of the mid and small caps across the board are getting locked in circuits.

I am afraid to say that too much money may be desperately chasing for opportunities irrespective of earnings quality which may have futile ending going forward.

How should one position themselves before Budget?

In 2016 and 2017 markets entered into Budget event with a multi month corrections and hence market rally on the back of good economic legislations can be justified then.

Now, the market is entering into the budget event with a relentless up move. Post budget, if the market sustains above breakout points of 10900 then momentum may take it towards 11,600.

How is the market looking on the weekly as well as monthly charts?

In the current month there is a bigger breakout on monthly charts, above the 9-years old ascending channel with multiple touch points which is projecting a huge target of around 13,200 for Nifty.

This breakout will remain valid as long as Nifty sustains above 10600 mark on monthly closing basis.  So post Budget, if Nifty were to settle above 10600 levels going into March also, I think, this kind of lucrative targets are quite possible going forward may be in next 12 – 18 months.

Weekly charts are also strong and shall register a breakout on a close above 10900 levels. Then more realistic target of 11600 can be achieved in and around budget time.

What should be the strategy -- buy on dips or sell on rallies in the coming week?

At this point in time, especially when we are seeing vertical upmoves, traders should not get carried away and throw caution to the wind. In our opinion maintaining cautiously optimistic stance is better rather than outlandishly taking a bullish stance.

Things on directional front can be much clear if we doesn’t violate critical supports post budget.  In simple words on corrections if the support of 10600 is not violated on closing basis then that should be utilised to go long. Best strategy is to remain sidelines as we head towards budget event.

Top 3-5 stocks (with timeframe) which are looking attractive at current levels based on technical?

ITC: BUY| Target Rs310| Stop Loss Rs260| Return 13%

Technically this counter appears to have registered a durable bottom around 250 levels. Since then it is strengthening its moves on the upside with breakouts after brief periods of consolidation.

Hence, sustaining above 260 levels this counter should be heading to test its huge gap zone of 320 – 292, it registered on 18th of July 2017. Hence, in the next three months it can trade around 310.

Positional traders can go long into this counter with a stop below 260 on closing basis for a target of 315 which is close to 62% retracement level of entire fall from 367 – 250

Bajaj Finance: BUY| Target Rs 1800| Stop Loss Rs 1632| Return 6%

The way this counter has rallied in Friday’s session after approaching close to its 200-days Moving Averages is suggesting that it might have posted a bottom in the session around 1632 levels.

Hence, there appears to be a high conviction trading opportunity in this counter with a stop below Rs 1632 on a closing basis for a target of Rs1800.

Canara Bank: BUY| Target Rs 395| Stop Loss Rs 350| Return 9%

After testing the upside gap zone of Rs 349 – 320 registered on 25th October 2017 this counter appears to have posted a decent bottom at recent low of 335 and appears to be on the verge of a fresh breakout.

The momentum propelled by a breakout shall pick up into this counter on a close above Rs 365. Hence, traders should buy into this in anticipation of such a breakout for a target of Rs 395. A stop for the trade should be below Rs 350 on closing basis.

MORE WILL UPDATE SOON!!