Top 10 money-making ideas by experts which would give up to 14% return in short term

After a sharp correction seen throughout in the month of March, analysts feel that the Nifty could see a bounce back which could take the Nifty towards 10300-10400 levels. But, that would just be a ‘Dead Cat Bounce’ as the pain is not yet over.

  

Bears ruled Dalal Street in the week gone by but this week could well belong to the bulls, suggest technical experts tracking the market. The Nifty50 which closed with a loss of 2.2 percent for the week ended March 9 but the pullback rally could take Nifty towards 10300-10400 levels, they say.

A large part of the decline was led by banking stocks as more bad news flowed into the sector. The banking regulator penalised four banks including State Bank of India (SBI) and Airtel Payments Bank for breaching RBI norms.

On the global front, the market sentiment remained weak amid weak global cues on the prospects of trade wars initiated by the US President Donald Trump which led to weakness in markets across the globe.

The BSE-30 Index dropped over 2 percent to close at 33,307 while the Nifty50 slipped by 2.2 percent for the week ended March 9. The index breached key support levels but managed to defend its 200-days exponential moving average which was placed around 10070.

After a sharp correction seen throughout in the month of March, analysts feel that the Nifty could see a bounce back which could take the Nifty towards 10300-10400 levels. But, that would just be a ‘Dead Cat Bounce’ as the pain is not yet over.

This was clearly an action-packed week for our traders as we once again saw some trended move after a consolidation of nearly three weeks. This was clearly on cards; but as we all know, timing such moves is not as easy as it looks in the hindsight.

For a positional trader, it is always a prudent strategy to remain with the trend when it is in the early stages. The near-term trend turned lower after confirming the ‘Bearish Engulfing’ pattern at the end of the ‘Budget week.

Addition to this, the ‘RSI-Smoothened’ slipped below the 70 mark and now we can see prices closing below the ’20-EMA’ on the weekly time frame for the first time after January 2017.

We would continue with our ‘sell on rise’ approach and would expect the index to the first slide towards 10033 and then eventually to enter sub-10000 levels quite soon. However, before this, 10140 – 10350 has become a no-trade zone for the market. If any negativity has to resume, it would only happen after violating the 10140 mark.

He further added that the ideal scenario to initiate short position would be either below this crucial junction or after seeing a decent relief rally towards the higher end i.e. 10350 – 10400. As of now, we do not expect the Nifty to surpass these hurdles in coming days.

Traders should remain light and avoid taking undue risks in such kind of uncertainty and in case of some relief rally within the consolidation range, traders should focus on individual stocks.

We have collated a list of ten trading ideas which can give up to 14% return in the short term:

Bank of Baroda Ltd: BUY| Target Rs 142| Stop Loss Rs 128| Return 8%

We are not trying to make any kind of bottom fishing as the entire PSU banking basket is like a falling knife for the last three weeks. But, the way this stock behaved in the last three sessions, we tempted to take a trading punt with a small stop loss.

The stock is extremely oversold as reflected on the daily time frame charts along with a couple of ‘Doji’ candles around the 130 mark.

Since, the risk is very small i.e. hardly a couple of percent from current prices, it calls for a good contra-buy for the coming week. In case of a bounce back, we may see a good relief move towards Rs.142 levels.

However, considering the recent underperformance, traders are advised to follow a strict stop loss placed below Rs.128 for this trade.

Ultratech Cement Ltd: SELL| Target Rs 3896| Stop Loss Rs 4174| Return 7%

The stock prices consolidated for nearly a month after witnessing a sharp correction from the all-time high of 4600. On Friday, there were some hints that the stock could break below this consolidation range and therefore, confirms a resumption of a downward move.

The momentum oscillators in the weekly time frame are sloping southwards, which adds conviction to the cautious stance on the counter. We advise going short for a target of Rs.3896 for the coming week, and one should place a strict stop loss below Rs.4174.

Tata Steel Ltd: SELL| Target Rs 625| Stop Loss Rs 647| Return 9%

Looking at Friday’s sharp fall, it is no brainer going short on this counter. But, we have been quite vocal on the probable correction before the Budget time and have been advising traders exiting longs around their recent highs.

In fact, ‘Tata Steel’ was the one stock that we advised going contra-short around its peak. This was mainly after prices entering its major resistance zone of 161% reciprocal retracement on the monthly chart. It is good to see the real impact of this important ‘Golden Ratio’.

Now, finally, prices confirmed its bearish trend after breaking down below recent ‘make or break’ level of 632. We continue to expect this stock sliding towards 570 – 550 in days to come.

Since the stock has already fallen a lot, it’s advisable to wait for some bounce back towards 620 – 625, which will make the risk-reward ration a bit favorable. One can look to go short around it with a strict stop loss of Rs.647.

Jay Purohit -Technical & Derivatives Analyst, Centrum Broking Limited

Motherson Sumi: BUY| Target Rs 350| Stop Loss Rs 298| Return 10%

The stock has corrected sharply in the last few days and has reached to its strong support zone of Rs300-305. The stock made a ‘double bottom’ formation and has started rebounding from the mentioned support zone to form a couple of 'Hammer' candles on the daily time frame charts.

This was followed by a positive momentum in the last couple of trading sessions, which indicates a possibility of a reversal in the short term trend.

Also, the momentum oscillator ‘RSI’ is showing positive divergence on the daily chart and is showing strength in the counter. Looking at the current chart structure, we are expecting a bounce in the stock towards Rs350 levels in coming couple of weeks.

Any decline towards 310 should be used as a buying opportunity with a stop-loss of 298.

Bharti Airtel: BUY| Target Rs 445| Stop Loss Rs 379| Return 11%

The stock is moving in a corrective phase from the last ten weeks and has also corrected by more than 25 percent in the same time. Currently, we are witnessing a formation of a Bullish Harmonic pattern called ‘Bullish Bat’ on the daily charts.

The Potential Reversal Zone (PRZ) is placed in the zone of Rs387 – 393. The ‘RSI’ oscillator is showing a series of positive divergence on the daily chart, indicating a possibility of a short-term reversal.

Looking at the above technical evidence, traders are advised to buy the stock on declines for the target of Rs435 – 445 with a stop-loss below 379.

Jubilant FoodWorks: BUY| Target Rs 2350| Stop Loss Rs 1960| Return 14%

The stock has outperformed the broader market in the recent past as it didn’t correct too much in the ongoing correction seen in the market.

From the last two sessions, the stock is showing strength and is now coming out of a short-term consolidation phase. Also, the ‘RSI’ on the weekly chart is showing a positive reversal and thus indicating resumption in the uptrend in the coming weeks.

Considering current chart structure, we advised traders to buy the stock with the stop-loss of 1960, and on the upside, we may see targets ranging from 2300 – 2350 levels.

Vakrangee Ltd: BUY| Target Rs 216 | Stop Loss Rs 180 | Return 10%

After trading in a downward momentum for a series of consecutive session, Vakrangee took a strong bottom base at 154 levels and continued to rebound in a positive trajectory.

The scrip breached its short-term moving average placed at 174 levels with substantial growth in volume which signalled a positive momentum.

On the weekly price chart, the scrip made a strong bullish candlestick pattern coupled with bullish crossover on MACD made during last week’s trade.

Further, the RSI level at 58 up from earlier level sign positive cues. The scrip is currently holding support at 179 and resistance level is seen at 225. We have a BUY recommendation on the counter which is currently trading at Rs. 195.75

Geojit Financial Services Ltd: BUY| Target Rs 109 | Stop-loss Rs 90 | Return 8%

Geojit Financial witnessed a robust momentum towards the weekend session despite trading in a sideways direction for a week, as it made a positive breakout from its 20-days EMA level.

Further, Bollinger bandwidth suggests a positive breakout from its upper band placed at 117 which is likely to build the uptrend trajectory. After closing on about 6 percent gain on an intraday basis, the scrip made a solid bullish candlestick pattern on its daily price chart.

Further, the RSI at 51 levels has given a favourable buying regime coupled with positive cues on MACD.

With price trading above crucial levels, the scrip is now facing a resistance at 118 levels and support level at 89. We have a BUY recommendation for Geojit Financial which is currently trading at Rs100.95

Pidilite Industries Ltd: BUY| Target Rs 980| Stop Loss Rs 820| Return 12%

The stock closed at Rs878.70 on 9th March 2018. It made a 52-week low at Rs680 on 10th March 2017 and a 52-week high of Rs. 971.70 on 26th December 2018.

The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs. 831.87. The stock is continuously trading in higher highs and higher lows on weekly charts which is bullish in nature.

From the past few weeks, it was consolidating in the range of 840-910 levels and formed a “Triangle” pattern. Although, the stock has not given the pattern breakout bias is looking positive for the stock.

Therefore, one can buy in the range of 865-875 levels for the upside target of 960-980 levels with SL below 820.

Tata Elxsi Ltd: BUY| Target Rs 1120| Stop Loss Rs 930| Return 12%

The stock closed at Rs. 1002.35 on 09th March 2018. It made a 52-week low at Rs. 641.17 on 24th May 2017 and a 52-week high of Rs. 1123.25 on 24th January 2018. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs. 913.83

The stock is forming an “Inverted Head and Shoulder” pattern on the weekly charts, which is considered to be bullish. It took more than 2 years to form the pattern so the potential of rise is quite strong.

Apart from this, technical indicators such as RSI and MACD are also suggesting buying the stock. Therefore, one can buy in the range of 980-990 levels for the upside target of 1100-1120 levels with a stop loss below 930.

MORE WILL UPDATE SOON!!

Bulls can regain control! Nifty may see pullback toward 10,350–10,400 this week

Considering the formation of mentioned candlestick patterns around the support levels, a pull-back move towards 10,350–10,400 cannot be ruled out.

  

A pull-back toward 10,350–10,400 cannot be ruled out this week. Very short-term traders can look for buying opportunities for few sessions.

Last week wasn’t that good for the bulls as we witnessed a sharp selling pressure in the first three sessions of the week.

On Tuesday, the Nifty breached its trading range of 10300 – 10640 levels on the downside and thus resulted into a breakdown from the ‘Bearish Flag’ pattern on the daily chart, which is a negative sign for the index.

But, the Nifty took support around the ‘200 DMA’ on Wednesday & Thursday and formed ‘Tweezer Bottom’ on the daily chart.

Also, we witnessed a formation of ‘Hammer’ pattern on Thursday. Due to some pull-back in last two sessions, the index concluded the week with a loss of 2.21 percent over its previous close.

Considering the formation of mentioned candlestick patterns around the support levels, a pull-back move towards 10,350–10,400 cannot be ruled out. Hence, very short-term traders can look for buying opportunities for few sessions.

Though a pull-back move is on the cards, the overall chart structure remains negative as we witness a formation of ‘Bearish Engulfing’ pattern on both weekly as well as monthly time frame charts.

The index is expected to correct again after retesting the breakdown level of the ‘Bearish Flag’ pattern on the weekly chart. Thus, one should look to exit from the long positions on bounces as we may again test the 10100 – 10000 levels in the coming few weeks.

Thus, traders are advised to hedge their long-only portfolio around 10400 level with long-dated Nifty put options.

Though the index may see selling pressure at higher levels, some stocks have corrected to their strong support levels and are giving good buying opportunity. Below is the list of the same.

Motherson Sumi: BUY| Target Rs 350| Stop Loss Rs 298| Return 10%

The stock has corrected sharply in the last few days and has reached to its strong support zone of Rs300-305. The stock made a ‘double bottom’ formation and has started rebounding from the mentioned support zone to form a couple of 'Hammer' candles on the daily time frame charts.

This was followed by a positive momentum in the last couple of trading sessions, which indicates a possibility of a reversal in the short term trend.

Also, the momentum oscillator ‘RSI’ is showing positive divergence on the daily chart and is showing strength in the counter. Looking at the current chart structure, we are expecting a bounce in the stock towards Rs350 levels in coming couple of weeks.

Any decline towards 310 should be used as a buying opportunity with a stop-loss of 298.

Bharti Airtel: BUY| Target Rs 445| Stop Loss Rs 379| Return 11%

The stock is moving in a corrective phase from the last ten weeks and has also corrected by more than 25 percent in the same time. Currently, we are witnessing a formation of a Bullish Harmonic pattern called ‘Bullish Bat’ on the daily charts.

The Potential Reversal Zone (PRZ) is placed in the zone of Rs387 – 393. The ‘RSI’ oscillator is showing a series of positive divergence on the daily chart, indicating a possibility of a short-term reversal.

Looking at the above technical evidence, traders are advised to buy the stock on declines for the target of Rs435 – 445 with a stop-loss below 379.

Jubilant FoodWorks: BUY| Target Rs 2350| Stop Loss Rs 1960| Return 14%

The stock has outperformed the broader market in the recent past as it didn’t correct too much in the ongoing correction seen in the market.

From the last two sessions, the stock is showing strength and is now coming out of a short-term consolidation phase. Also, the ‘RSI’ on the weekly chart is showing a positive reversal and thus indicating resumption in the uptrend in the coming weeks.

Considering current chart structure, we advised traders to buy the stock with the stop-loss of 1960, and on the upside, we may see targets ranging from 2300 – 2350 levels.

MORE WILL UPDATE SOON!!

Buy, Sell, Hold: 5 stocks & 2 sectors are in focus on March 12, 2018

IDFC Bank, Coal India, and metals, among others, are being tracked by investors on Monday.

   

IDFC Bank

Brokerage: Credit Suisse | Rating: Neutral | Target: Rs 55

The global research firm observed that five non-banks transitioned to banks in last 3 years, but growth of IDFC Bank has stayed weak. The bank is challenged as its loan growth trajectory has not accelerated. Going forward, it expects corporate book to continue to contract, along with slow build up in retail liability. In fact, retail liability build-up is a concern even after its merger with Capital First.

Coal India

Brokerage: Nomura | Rating: Neutral

Nomura observed that the dividend for this fiscal at Rs 16.50 per share is broadly in line with the consensus. The total cash outgo due to the dividend is pegged at Rs 12,320 crore, while the government’s share of dividend will be Rs 10,120 crore. Nominal ‘final dividend’ cannot be ruled out this year, it said, adding that it has maintained earnings estimates for the stock.

ITC & USL

Brokerage: Deutsche Bank | Rating: Buy

The investment bank highlighted that there was no mention of cigarette & ENA taxation in GST meet, which provides an upside trigger. ITC remains a top pick in staples alongside HUL, Dabur, Nestle and GSK Consumer. Going forward, a reprieve for cigarette ind can trigger ITC’s P/E rerating in the interim.

Maruti Suzuki

Brokerage: Deutsche Bank | Rating: Buy | Target: Rs 10,000

Deutsche Bank observed that the stock has declined 10 percent YTD due to the overhang of potential negative surprises. Forex and raw materials pose a risk to margins, but the impact should be low, it feels. The company continues to be in a sweet spot in its model cycle, it said, adding that it has cut EPS forecastrs by 6-8 percent due to a reset in forex assumptions.

Gas

Brokerage: CLSA

CLSA believes that the sector is on the cusp of a paradigm shift. Further, actions being taken for free-market pricing hub for domestic gas. It believes that bringing gas under GST a big idea that may materialise soon. The focus essentially lies on expanding city gas business. It expects free market gas pricing hub to be a reality in a year.

Metals

Brokerage: CLSA

CLSA said that it prefers steel sector over aluminium. It has downgraded Hindalco to sell and prefers Vedanta. It has also cut FY19-20 EPS for Hindalco by 14-23 percent, while Vedanta's EPS estimate has been cut by 9-11 percent. The target for Hindalco is cut to Rs 205, while Vedanta’s target price is at Rs 410 from Rs 422.

MORE WILL UPDATE SOON!!

Nifty may face hurdle at 10,400; top 5 stocks with up to 5% return potential in short term

The index has formed 'Spinning Top' candlestick pattern indicating lack of momentum on either side. Now Nifty has to close above 10,250 marks for further upside. The level 10,400 will work as immediate hurdle zone and support is seen around 10,130 mark.

             

The Indian benchmark indices Sensex and Nifty closed lower as banking stocks extended losses. Among sectoral indices, the Nifty PSU Bank index ended 1.81 percent lower led by a fall in the shares of Canara Bank, IDBI Bank and Oriental Bank of Commerce.

The Nifty Metal index too ended 1.81 percent down due to a fall in shares of Steel Authority of India Limited, Jindal Steel & Power and Tata Steel.

In the global markets, Asian shares rallied and the safe-haven yen eased on Friday after North Korean leader Kim Jong Un offered to stop nuclear and missile testing and US President Donald Trump agreed to a meeting that could come before May.

Technical Outlook

Nifty

Nifty opened higher but failed to hold gains and remained in a trading range of 86 points. The index has formed 'Spinning Top' candlestick pattern indicating lack of momentum on either side. Now Nifty has to close above 10,250 marks for further upside. The level 10,400 will work as immediate hurdle zone and support is seen around 10,130 mark.

Furthermore, RSI (14) failed to give positive crossover. We are expecting Index to consolidate within a range of 10,100-10,400 levels in near term.

Bank Nifty

Nifty Bank opened with positive bias but failed to hold gains and closed lower by 0.74 percent amid sell-off in PSU Stocks. It is consolidating around 78.6 percent Retracement levels on daily scale. Any significant move above 24,500 levels might take Nifty Bank higher till 24,800 and 25,100 levels. Strong support is seen around 23,900 levels.

Moreover, Oscillators are trading around oversold zone. We are expecting Index to consolidate within a range of 23900-24800 levels in near term.

Below are the top 5 stocks which can yield up to 5% return:

VA Tech Wabag | Rating: Buy | Target: Rs 523, stop loss: Rs 480 | Return: 5%

Kajaria Ceramics | Rating: Buy | Target: Rs 590, stop loss: Rs 555 | Return: 3%

BEML Limited | Rating: Buy | Target: Rs 1145, stop loss: Rs 1080 | Return: 3%

United Breweries | Rating: Sell | Target: Rs 989, stop loss: Rs 1040 | Return: 3%

Dr Reddy's Laboratories | Rating: Sell | Target: Rs 2060, stop loss: Rs 2190 | Return: 3%

MORE WILL UPDATE SOON!!

Broader Indices stay in green as HCL Tech pulls IT index higher; 2 stocks which can return up to 4%

From the Nifty the stocks which gained the most were HCL Tech which jumped 3 percent while ITC was up close to 3 percent. Wipro, Infosys and Vedanta were the other top performing stocks.

  

The bulls were in control with the Indian markets rallying as the Nifty jumped 87 points at 10,314 while the Sensex was up 272 points.

The Nifty IT index jumped 1.69 percent led by HCL Tech which was up 3 percent while Tech Mahindra, Infosys, Tata Consulltancy Services and Wipro were the other top IT gainers.

The Nifty PSU banking index was however down over 2.5 percent dragged by Andhra Bank which plunged over 12 percent after the Enforcement Directorate filed a charge sheet against a former bank director in an alleged Rs 5,000-crore bank fraud case involving a Gujarat-based pharma firm.

The other top losers included IDBI Bank which feel obver 9 percent followed by Canara Bank, Oriental Bank of Commerce, Bank of India and Union Bank of India which shed up to 9 percent.

From the Nifty the stocks which gained the most were HCL Tech which jumped 3 percent while ITC was up close to 3 percent. Wipro, Infosys and Vedanta were the other top performing stocks.

Chandan Taparia, AVP- Equity Derivatives & Technical at Motilal Oswal Securities has picked up 2 stocks which can yield up to 4% return:

Jubilant Foodworks | Rating: Buy | Target: Rs 2150, stop loss: Rs 2025 | Return: 3%

Tech Mahindra | Rating: Buy | Target: Rs 648, stop loss: Rs 620 | Return: 4%

MORE WILL UPDATE SOON!!

Market Week Ahead:key things that will keep traders busy

The market is likely to start the coming week on a positive note, tracking strong closing in US markets on Friday after better-than-expected jobs data but for the rest of the week, a bit of weakness amid consolidation is expected to continue.

   

The market continued its correction in the passing week despite recovery in global peers, shedding more than 2 percent and taking total losses to over 8 percent from its record high touched on January 29, 2018. Benchmark indices closed at fresh 2018 closing lows.

Continued weakness in the banking space after the Rs 12,700-crore PNB fraud case, and worries over trade war arising from the US announcement of import duties on steel and aluminium hit market sentiment.

Generally, when the market sharply moves either way, it becomes difficult to predict the top or bottom. Hence, in this falling market, people are finding it difficult to take long positions and are waiting for the bottom to be formed.

The market trend also indicated that traders as well as investors are using two strategies - "sell on rally" and "add exposure to quality stocks".

The current gradual correction from all-time high indicated the overall weakness in the market is not yet over due to ongoing asset quality issues in banking, the major driver of the economy, experts feel.

The market is likely to start the coming week on a positive note, tracking strong closing in US markets on Friday after better-than-expected jobs data but for the rest of the week, a bit of weakness amid consolidation is expected to continue, experts said, adding a major sell-off is unlikely unless there are any further detrimental developments in the banking fraud case or globally.

"The market breadth has remained weak throughout the week. Despite a recovery of almost 100 points on Thursday, a negative breadth clearly suggested prevailing scepticism in the market. Thus, selling pressure may continue at higher levels in the coming sessions," Amit Gupta of ICICIdirect said.

He further said, "As fresh shorts are not evident in data, any change of bias in the Nifty may be seen only if fresh long additions were observed or Call writers start unwinding their positions. At the same time, sudden depreciation in rupee also weighed on equities as it moved above 65 once again."

In the coming week, the market will closely watch the macro data (January IIP and February CPI inflation). The flow in secondary market could be impacted due to active primary market as three IPOs nearly worth Rs 10,000 crore will open for subscription.

"The macro data will give a sense of the economic recovery and trend in inflation, respectively. In this, inflation would be something that would be critical as its further hardening could trigger fears of rate hikes," Sanjeev Zarbade, Vice-president-PCG Research, Kotak Securities. said.

On the global front, he said President Trump’s rhetoric on trade protectionism could weigh on markets. On the other hand, any move by the Trump towards reconciliation with North Korea could be taken positively.

The recent fall in mid-cap stocks provides a good opportunity for investors to pick stocks. So he advises investors to select stocks with strong management quality, robust earnings growth and reasonable valuations.

Here are 10 key things to watch out for in the coming week:

Banking fraud deepening

The crisis in banking sector, the major driver of the economy, has been intensifying after the country's second largest public sector lender Punjab National Bank reported transaction fraud worth Rs 12,700 crore last month. PSU Bank index corrected 5.4 percent and Nifty Bank lost 2.4 percent in the week gone by.

A multi-agency probe is already underway into the PNB scam and the ministry already filed a petition against individuals, groups and their entities belonging to Nirav Modi and Mehul Choksi Groups before the Mumbai bench of the National Company Law Tribunal (NCLT).

In the latest development, the Serious Fraud Investigation Office (SFIO) is probing 107 companies and seven Limited Liability Partnerships linked to Nirav Modi and Mehul Choksi groups.

In another alleged scam, the Enforcement Directorate also filed a charge sheet against a former Andhra Bank director in an alleged Rs 5,000-crore bank fraud case involving a Gujarat-based pharma firm. A media report indicated that former deputy manager of PNB Gokulnath Shetty, who involved in the PNB-Nirav Modi-Mehul Choksi scam, had also dealt with Winsome officials and the CBI has summoned R Ravichandran, former director (operations) of that diamond trading company.

On top of the likely elevated NPA levels and higher provisions, latest banking report by global investment firm warned that state-run banks, which are typically the largest investors in sovereign securities, could lose more than Rs 20,000 crore in the January-March quarter, due to a continued spike in bond yields and as they held more bonds than are required by the regulator.

The Government’s tough call to inspect all books of PSU Banks where borrowed amounts were above Rs 50 crore may keep some investors un-nerved on expectations of more un-toward revelation by PSU banks, the Stewart & Mackertich Wealth Management said in its report.

GST Council

The Goods and Services Tax (GST) Council approved the e-Way Bill rollout from April 1 in its 26th meeting held in New Delhi on Saturday.

Finance Minister Arun Jaitley while addressing the media after the meeting said the council was working on making the returns filing process simpler.

The current system for simplifying returns has been extended by 3 months. TDS and TCS system formalities, in which state and central government accounting systems will be linked has also been extended until June 30.

The tax bureaucracy was of the view that such a mechanism would be in place that there would be no room left for tax evasion.

Macro Data

Industrial output for the month of January and CPI inflation for February will be released on Monday after market hours, which will give a sense of the economic recovery and trend in inflation.

Overall economists expect the CPI for February at around 4.7 percent and IIP for January around 6.3-6.4 percent.

CPI in January improved to 5.07 percent whereas, index of industrial production data for December 2017 was reported at 7.1 percent.

Apart from CPI and IIP, balance of trade for February will be announced on Monday, Q4 current account deficit data on Tuesday, WPI inflation for February on Wednesday, and foreign exchange reserves data for the week ended March 9 and deposits & bank loan growth data for week ended March 2 on Friday.

IPOs

The primary market will be fully active in the coming week as around Rs 10,000 crore worth of IPOs will hit the Dalal Street.

State-owned Bharat Dynamics and Hindustan Aeronautics will open their IPOs worth Rs 960 crore and Rs 4,200 crore for subscription on Tuesday and Friday, respectively.

Bandhan Bank's Rs 4,473 crore IPO will be opened on Thursday while the Rs 77-crore public issue of Karda Construction will open on Friday.

FIIs

Foreign institutional investors were net buyers to the tune of more than Rs 1,500 crore in equities last week after around Rs 12,000 crore worth of selling in equities in February while domestic institutional investors' flow was muted as they bought only Rs 131 crore worth of shares following more than Rs 17,000 crore buying in previous month.

FIIs and DIIs flow would be closely watched in the coming week as major chunk of their investment may be shifted to primary market wherein four IPOs will be opened.

Jayesh Bhanushali, Senior Analyst at IIFL said tracking FIIs' short-term future and options positions, they have a long/short ratio of 0.9x in index futures, 1.9x in call options and 2.7x in put options, indicating a negative outlook for the March expiry.

Futures & Options

The trend in F&O indicated that the market could be in a range of 200-250 points on the Nifty in the coming week.

"Option band signifies a range bound trading range between 10,100 to 10,350 zones," Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities said.

On the options front, maximum Put open interest stood at 10000 followed by 10200 strikes while maximum Call open interest is at 10500 followed by 10400 strike. Fresh Call writing was seen at 10300 followed by 10500 strikes while Put writing was seen at 10200 followed by 10150 levels on Friday.

The index futures have added around 70 lakh shares in open positions since the beginning of the March series, consisting of mainly short positions.

"As out of the money 10400ce & 10500ce strikes have huge call writing positions, we believe every upside up to the mentioned strikes should be used to unwind long positions or create fresh short positions," Bhanushali said.

Technical Outlook

Technically, the 10,100 would be important support level for the Nifty, followed by 10,000, the most crucial level said every analyst. If that breaks, then there could be more sell-off in the market, experts feel.

"Daily chart pattern suggests, the Nifty is approaching towards 200 daily EMA placed around 10,100 levels, recent pullback from 10,140 levels may again get sold off towards lower lows. This pullback is likely to be short lived since there is 13-30 daily EMA bearish cross down on the daily chart," Stewart & Mackertich said.

"The Nifty may remain under pressure as long as it trades below dual resistance zone of 10,340. Hence, aggressive buying is certainly not advised. The broader trading range for this month is expected to be 10,540-10,000," it added.

Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan said, "The momentum indicators on the daily as well as the weekly time frame are in bearish mode. This indicates that the bears are having upper hand on the benchmark index.

Once the Nifty breaches the swing low of 10,141 it can target the psychological mark of 10,000 with potential to tumble down till 9,800, he feels.

Stocks in Focus

Here is the list of stocks that may react to the news on coming Monday:

Tata Motors said global wholesales of all its commercial vehicle & Tata Daewoo range in February stood at 46,262 vehicles, passenger vehicles at 74,990 units and JLR at 56,905 vehicles.

Enforcement Directorate has filed prosecution complaint against Anup Prakash Garg, ex- director, Andhra Bank under PMLA in Rs 5,000 crore bank fraud case involving Sterling Biotech, its directors & others.

Oriental Bank of Commerce raised 1-year marginal cost of funds based lending rate to 8.50 percent from 8.35 percent.

IDBI Bank will be in focus as a media report indicated that capital market regulator SEBI is set to buy bank's building in Mumbai for nearly Rs 1,000 crore.

Union Bank of India has direct credit exposure of about Rs 295 crore to Nirav Modi and Gitanjali Group companies, its chief executive told Reuters.

Reliance Communications promoter firm pledges shares worth Rs 300 crore.

Government said PNB incurred losses of Rs 2,808 crore due to frauds in 2016-17.

Bharti Airtel planned to raise up to Rs 3,000 crore for refinancing debt and meeting spectrum liabilities

Global Cues

Indian markets may the start the coming week on a positive note, tracking strong close on Wall Street on Friday. The Dow Jones Industrial Average rallied 440 points after February jobs growth far exceeded expectations.

The US economy added 3,13,000 jobs in February, according to the Bureau of Labor Statistics. Economists polled by Reuters expected a gain of 2,00,000.

On the data front, US' CPI for the month of February will be released on Tuesday, continuing & initial jobless claims on Thursday, and industrial production data for February on Friday.

Japan will announce its data for machine tool orders on Monday, PPI for February on Tuesday, core machinery orders for January & monetary policy meeting minutes on Wednesday, and industrial production for January on Friday.

Europe's industrial production data for January will be announced on Wednesday and CPI for February month on Friday.

China's industrial production data for February will be released on Wednesday.

MORE WILL UPDATE SOON!!

Allocate 70% to equities in this fall; Top 5 wealth creating ideas for next 2-3 years

After a setback from Union Budget 2018, the domestic market has shifted focus into the global volatility which is turning cautious due to premium valuation, increase in interest rate and risk of de-globalisation.

   

In the short-term, the market may have a positive bias and during which the investors should consider shifting the portfolio into low beta, Vinod Nair, Head of Research at Geojit Financial Services.

India has gone into a double whammy under the domestic and global headwinds. After a setback from Union Budget 2018, the domestic market has shifted focus into the global volatility which is turning cautious due to premium valuation, increase in interest rate and risk of de-globalisation.

This trend may continue as valuation normalises and bond yield stabilise. For example, India’s government 10-years yield currently stands at 7.77, 49bps up in the last 2months.

Deposit and lending rates are increasing and trajectory of inflation continues to be on the higher side, which augurs further cut in valuation.

In the near-term, RBI is expected to provide additional liquidity to the bond market, which will provide some support to the market especial the financial sector.

The current effective Fed rate is 1.4 percent while the 10-years yield is 2.9 percent. If the US Fed rate is increased by 3times, the effective rate will be 2.15 percent by the end of Dec-2018, if the same spread is maintained the bond yield will increase to 3.65 percent.

The US bond yield has increased by 60bps in the last 3 month, bringing high volatility in the Indian market. Currently, the market is down by about 6 percent, if this situation continues in the global bond market, India will also be impacted.

 To churn your portfolio towards defensive sectors and reducing high beta stocks should be the key for retail investors. In the short-term, the market may have a positive bias and during which the investors should consider shifting the portfolio into low beta.

Profit booking on stocks with premium valuation and increasing in mutual funds debt are also advisable in the medium-term.

Given our moderate expectation on equity markets, we suggest starting with a holding of 40 percent for equity which can be increased to 70 percent over the long-term.

The focus should be more on Mutual Fund schemes predominantly with largecap exposure which investors can increase through diversified multicap funds.

Direct equity can be 10 to 15 percent of the total portfolio with a focus on defensive sectors. For the time being, high exposure is advised on mutual fund debt scheme at 60 percent with corporate accrual funds.

Top five wealth-creating ideas which investors can look at for the next 2-3 years.

HCL Technologies

We continue to remain positive on HCL on a consolidated basis driven by traction in deal wins and strength in Mode 2 & 3 services (focus on next-gen offerings).

Revenue contribution from Mode 2 & 3 services surpassed 25 percent of the total revenue and the management is eyeing to further increase the contribution from digital business to 40 percent over the next few years.

Deal wins remained strong in Q3FY18 with the company signing twenty transformational deals across services. The company’s strategy of augmenting its IP based partnerships with technology vendors to broaden its product offerings is expected to provide a tailwind to revenue growth going ahead. We factor revenue CAGR of 9 percent over FY17-20E.

Aarti Industries

AARTI Industries Ltd (ARTO) is a global leader in Benzene based derivative products. The company has a diversified product portfolio with end users in pharma, agrochemicals, specialty polymers, paints & pigments.

ARTO’s Q3 Revenue grew by 29 percent YoY, led by strong growth across business segments with Speciality chemical business grew by 23 percent YoY, home & personal care business 103 percent YoY and Pharma 35 percent YoY.

Recently, ARTO signed Rs10,000cr exclusive supply contract with a global chemical conglomerate for high-value speciality chemical intermediate over a period of 20 years with the commencement of supplies from the Year 2020.

Going forward, we believe that with strong off-take Pharma segment and stable growth from Specality chemicals segments, we factor revenue to grow 14 percent CAGR over FY18E- FY20E. Given healthy earnings outlook, we continue to have a positive rating on the stock.

Torrent Pharma

Torrent’s acquisition of branded formulations business of Unichem Laboratories will strengthen its presence in the domestic market with expansion in the chronic portfolio, improved market share and widening distribution networks.

Besides recovery in US business is expected to drive robust growth going ahead. Higher revenue growth from Europe is also another positive for the company. Given increased R&D spends for high margin/high-volume products and meaningful new launches for coming years.

Notably, the management has guided for 10-15 ANDA filings in FY18 and also indicated plans to submit 3-4 derma products by this fiscal end. We expect Torrent Pharma’s revenue and Adj. PAT to grow at a CAGR of 14 percent/9 percent over FY17-20E owing to increased contribution from the domestic, gradual pickup in US sales through quality filings and strong growth in Germany, Brazil and RoW.

Idea Cellular

Idea’s focus on the Vodafone merger and accelerating synergistic benefits both in terms of operating cost and capex is expected to achieve a higher level of efficiency going ahead.

The merger process is likely to be completed by H1CY18, we expect synergies to start accruing from FY20E leading to an expansion in EBITDA margin to 28.4 percent in FY20E.

Importantly, the company’s fund-raising will provide Idea with much-needed liquidity to boost network and protect its revenue and market share. Moreover, Idea’s plan to monetise its tower assets will strengthen its balance sheet.

Tata Global Beverages

Tata Global Beverages (TGB), an integrated natural beverage company derives ~70 percent of revenue from branded tea business and ~60 percent of the revenue comes from markets outside India.

TGB has put in place a new strategy to drive growth and profitability including exiting from loss-making geographies. Under the core business rejuvenation, TGB will expand its product offerings in premium and non-black categories and enhanced its focus on green and herbal tea categories (higher margins).

It is also planning to foray in large tea consuming Asian markets such as Singapore, Malaysia, and China. To renew Nourishco (JV), TGB launched several new products/variants under Tata Gluco Plus and Himalayan water brands.

We expect TGB to gain market share across geographies led by its innovative premium product offerings and expect revenue/PAT to grow at ~6 percent/23 percent CAGR over FY17-20E.

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