Top buy and sell ideas for short term

  

The market continued to rally for the second straight session on August 9, helping benchmark indices post their first weekly gains in the last five weeks. The uptrend seen was on the hope of measures to boost economic growth and revive dented sentiment on the FPI front.

The BSE Sensex trimmed gains from 480 points intraday to 254.55 points to close at 37,581.91, taking total weekly gains to over a percent. The Nifty 50 rose 77.20 points to 11,109.70 and formed bullish candle resembling a Shooting Star kind of pattern on daily charts. The index also formed a bullish candle on a weekly scale.

The broader markets also saw buying interest, with the Nifty Midcap index rising a percent on Friday and 1.5 percent for the week.

According to the pivot charts, the key support level is placed at 11,054.5, followed by 10,999.3. If the index starts moving upward, the key resistance levels to watch for out are 11,173.2 and 11,236.7.

The Nifty Bank closed at 28,431.90, up by 321.45 points on August 9. The important pivot level, which will act as crucial support for the index, is placed at 28,254.87, followed by 28,077.83. On the upside, key resistance levels are placed at 28,605.87 and 28,779.83.

Buy Mindtree with stop loss at Rs 740 and target of Rs 770

Buy Aurobindo Pharma with stop loss at Rs 590 and target of Rs 618

Buy Manappuram Finance with stop loss at Rs 119 and target of Rs 131

Sell Tata Motors with stop loss at Rs 125 and target of Rs 117

Buy Bharat Forge with a stop loss of Rs 424 and target of Rs 439

Buy Muthoot Finance with a stop loss of Rs 639.5 and target of Rs 666

Buy Bharat Heavy Electricals with a stop loss of Rs 639.5 and target of Rs 666

Buy Indiabulls Housing Finance with a stop loss of Rs 487 and target of Rs 540

MORE WILL UPDATE SOON!!

Stock picks of the day: 11,000 defended on weekly basis, further relief likely

At this juncture, the pragmatic approach would be to take one step at a time and focus more on individual stocks.

 

Amid global uncertainty, our markets concluded the week with a smart recovery on August 9. Fortunately, we managed to defend the 11,000 mark on a weekly closing basis.

Firstly, the index tested the 61.8 percent retracement level of the previous up move. This point coincided with the '89-EMA' on the weekly chart as well as 161 percent (Golden Ratio) of the recent small up move from 11,108.30 to 12,103.05.

Also, the ‘RSI-Smoothened’ oscillator on a daily chart had reached the lowest level since October 15, 2018.

All these key observations were hinting towards the possibility of some relief from the crucial junction of 10,800.

Hence, we avoided shorting and kept focusing on some probable short-covering candidates. The strategy played out well and we are back above 11,100.

But, the real question lies whether the worst is over or not? In our sense, it would be too early to comment on this and although we have paused near a crucial technical cluster of supports, we need to wait for some further confirmation.

As of now, one should construe this rally as a relief move and going ahead, 11,200 – 11,300 are the levels to watch out for.

If we manage to surpass this wall, the next possible resistance is placed in the zone of 11,450 – 11,500. At this juncture, the pragmatic approach would be to take one step at a time and focus more on individual stocks.

On the lower side, the immediate support is seen around 11,062 – 10,975 and with a broader view, as long as we are defending 10,782 – 10,750, there is no reason to worry for.

Here is a list of top two stocks which could give 4-12 percent return in the next three to four weeks:

Motherson Sumi: Buy| LTP: Rs 107.35| Target: Rs 120| Stop Loss: Rs 99| Upside 12 percent

Last 1-1/2 years have been a challenging period for the auto and auto ancillary stocks. This stock has been experiencing relentless sell-off ever since it reversed after clocking its record high of 258.01 in December 2017.

With extended correction at the midst of the week, the stock retested its 2016 lows of 88.07 and had a sharp recovery to form a ‘Bullish Hammer’ on the daily chart on August 8.

On the following day, we witnessed a sharp short recovering rally of nearly 10 percent which confirms its short term reversal.

Considering the price and volume activity, we expect an extension of this relief move in the coming days. Hence, we recommend buying this counter for a target of Rs 120 and the stop loss should be fixed at Rs 99.

HDFC: Buy| LTP: Rs 2,211.65| Target: Rs 2,285| Stop Loss: Rs 2,175| Upside 4 percent

Since Budget day, we have witnessed a massive correction in some of the marquee names that have shown gravity-defying moves over the past year and a half.

These are the ones which propelled the index beyond the 12,000 mark. HDFC clearly has been one of those handfuls of stocks.

The stock prices retested its previous breakout points and have given a stellar recovery in the week gone by. The daily and the hourly chart looks encouraging and considering the overall price development, we will not be surprised to see this stock extending this relief move.

Thus, traders can look to initiate longs for a target of Rs 2,285 and the stop loss should be fixed at Rs 2,175.

MORE WILL UPDATE SOON!!

Check out the week's top 10 movers and shakers

The Sensex gained 463.69 points to end at 37,581.91, while Nifty ended at 11,109.7, up 112.35 points last week.

  

Indian markets ended on a positive note in the volatile week ended August 9 amid June quarter earnings, RBI monetary policy, and fresh concerns over Sino-US trade worries.

Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) reduced repo rates by another 35 basis points to 5.4 percent in the August Policy review while maintaining an accommodative stance. It now stands at the lowest level since April 2010.

The Sensex gained 463.69 points to end at 37,581.91, while Nifty ended at 11,109.7, up 112.35 points last week.

The S&P BSE Midcap index rose 1.26 percent, Smallcap Index added 1.10 percent and S&P BSE Largecap Index was up 0.68 percent last week.

Here is a list of 10 stocks which moved most in the last week:

Tata Steel | Down 11 percent

Tata Steel has reported a steep 64.3 percent year-on-year (YoY) decline in June quarter profit at Rs 693 crore amid muted revenue growth and subdued operating income.

The profit in the corresponding quarter last year was at Rs 1,940.8 crore. Lower other income (down 29 percent YoY) also impacted the bottom line.

Revenue during the quarter grew by 1.27 percent YoY to Rs 35,947.1 crore, dented by lower domestic and Europe growth. It was supported by Tata Steel BSL (erstwhile Bhushan Steel acquired under NCLT) which showed 105.5 percent growth YoY at Rs 4,332.73 crore in Q1.

Tata Steel India business declined nearly 2 percent to Rs 16,091 crore and Tata Steel Europe revenue fell 11.77 percent to Rs 14,495 crore compared to year-ago.

Endurance Technologies | Down 9 percent

The company's consolidated Q1FY20 net profit rose 32.9 percent at Rs 165.6 crore, against Rs 124.6 crore in the year-ago period. Its revenue grew 2.6 percent at Rs 1,909.2 crore against Rs 1,860.4 crore.

The earnings before interest, tax, depreciation and amortization (EBITDA) rallied 25.8 percent at Rs 341.4 crore. Meanwhile, the margin increased 330 bps at 17.9 percent.

The company's board has decided not to pursue the project of manufacturing of tyres for two- and three-wheelers, as per company release.

HCL Technologies | Up 7 percent

Shares of HCL Technologies rose more than 7 percent as brokerages are maintaining the buy rating on the stock despite the company posting a decline in its Q1 net profit on August 7.

The company reported a 13 percent sequential decline in the June quarter (Q1) profit at Rs 2,220 crore, dented by operating income, but maintained full-year revenue growth guidance.

The profit in the previous quarter was Rs 2,568 crore. The YoY profit fall was 7.6 percent.

Revenue was ahead of estimates at Rs 16,425 crore in the quarter ended June 2019, growing 2.7 percent sequentially and 18.7 percent YoY, the company said in its BSE filing.

Revenue in dollar terms increased 3.8 percent quarter-on-quarter (15 percent YoY) to $2,364 million and the same in constant currency grew by 4.2 percent QoQ (up 17 percent YoY).

BNP Paribas has maintained a buy rating on the stock but cut its target to Rs 1,200 from Rs 1,240 per share. Nomura has maintained buy call on the stock with a target at Rs 1,270 per share.

CLSA has also maintained a buy rating on HCL Technologies with a target at Rs 1,380 per share. However, Jefferies has maintained hold rating on the stock and raised the target to Rs 1,120 from Rs 1,090 per share.

SRF | Up 10 percent

The company registered 42 percent jump in its Q1 profit to Rs 189.2 crore against Rs 133.8 crore in the same quarter last year. Revenue of the company increased by 9 percent at Rs 1,828.4 crore versus Rs 1,676.2 crore.

The board of directors of the company has declared an interim dividend at 70 percent i.e. Rs 7 per share on the paid-up equity share capital of the company.

The board also approved the project for setting up of an integrated facility for the development of PTFE at an estimated cost of Rs 424 crore. The proposed capacity addition is 5,000 MTPA by October 31, 2021, with a mix of debt and internal accruals.

Cox & Kings | Down 22 percent

Shares of Cox & Kings touched a 52-week low on payment default of unsecured commercial paper. The company has defaulted on Rs 5 crore payments on unsecured commercial paper due on August 6.

Earlier, the company had defaulted on payment of Rs 100 crore worth unsecured commercial paper due on August 1, 2019, and repayment of Rs 10 crore on commercial papers due on July 29.

Tata Motors | Down 6 percent

Shares of Tata Motors touched a 52-week low after ICRA downgraded the automaker's rating, citing weakening of the financial profile of its British luxury car unit Jaguar Land Rover.

The credit rating agency downgraded Tata Motor's long term loans, long-term fund-based facilities and non-convertible debenture programme to AA- from AA, with the outlook remaining negative.

However, the agency reaffirmed the rating as A1+ on the commercial paper programme and short-term programme.

Coffee Day Enterprises | Down 26 percent

Shares of Coffee Day Enterprises remained under pressure on the sudden death of founder VG Siddhartha on July 29 which raised concerns over the company's corporate governance and financials amid rising debts.

Meanwhile, the Coffee Day Enterprises board, on August 8, appointed Ernst & Young (EY) to inspect its books and also look into the circumstances outlined by its deceased founder VG Siddhartha in his purported suicide note.

Siddhartha's body was found on July 29 in the Nethravati river in South India, two days after he went missing, and a note that seemed to have been written by him said he had "failed as an entrepreneur" and talked about pressure from lenders and an investor. It also alleged harassment at the hands of the income tax department.

The promoter group's pledged shares increased to over 80 percent recently from 75.7 percent till July 29, 2019. Given the circumstances, some of the investors have invoked pledged shares of the Coffee Day group to recover a part of their debt.

The board of Coffee Day Enterprises also decided, on August 8, to sell the group’s 90-acre technology park in Bengaluru to reduce the company's debt burden.

Aurobindo Pharma | Up 9 percent

Shares of Aurobindo Pharma rallied after June quarter earnings beat analyst expectations on all parameters.

The company reported a 39.5 percent YoY growth in June quarter net profit at Rs 635.7 crore driven by strong sales growth from the US, Europe and antiretroviral businesses.

Revenue during the quarter grew by 28.1 percent to Rs 5,444.6 crore compared to year-ago with US formulation business growing 42.3 percent and EU formulations segment rising 16.1 percent YoY.

The antiretroviral drug sales doubled to Rs 318.5 crore over the year-ago period. Aurobindo’s net debt dropped 18.3 percent on QoQ basis to Rs 4,093.9 crore.

Venkys | Up 16 percent

Shares of Venkys rose more than 16 percent in the last week after the company reported a 106 percent jump in its June quarter numbers.

The company has reported Q1FY20 net profit at Rs 61.8 crore against Rs 29.9 crore in the quarter of March 2019.

Revenue of the company rose 9 percent at Rs 905.3 crore against Rs 755.6 crore. Other income of the company stood at Rs 8.27 crore versus Rs 9.68 crore.

Minda Industries | Up 12 percent

Minda Industries rose 12 percent in the week ended August 9 despite company posted fall in its June quarter net profit.

The company's Q1 consolidated net profit was down 26.3 percent at Rs 62.3 crore against Rs 84.6 crore, while revenue was at Rs 1,440 crore against Rs 1,430 crore, YoY.

Earnings before interest, tax, depreciation and amortization (EBITDA) was up at Rs 172.2 crore, while margin was flat at 12 percent.

MORE WILL UPDATE SOON!!

Stocks in the news: RIL, Tata Motors, ONGC, BHEL, BPCL, Sintex Plastics, Varroc Engg, Oil India

Tata Motors | Alembic | Bosch | National Aluminium Company | Unichem Laboratories | ONGC | BHEL | BPCL and Sintex Plastics are among stocks, which are in news today.

   

Here are the stocks that are in news today:

Results on August 13: Glenmark Pharmaceuticals, ONGC, Sun Pharmaceutical, Coal India, Alembic, Bosch, National Aluminium Company, Bharat Forge, Chalet Hotels, Adhunik Industries, UFO Moviez, Solara Active Pharma Sciences, GMM Pfaudler, RITES, Fine Organic Industries, Dishman Carbogen Amcis, Karda Constructions, Setco Automotive, Techno Electric, Mandhana Industries, Shree Pushkar Chemicals, Reliance Home Finance, Mandhana Retail Ventures, Rollatainers, Rama Steel Tubes

Bharat Road Network, Precision Camshafts, Hindustan Aeronautics, MEP Infrastructure Developers, Dixon Technologies, Nagarjuna Fertilizers, Apex Frozen Foods, Dr Lal Path Labs, A2Z Infra Engineering, Snowman Logistics, Rain Industries, Vakrangee, Venus Remedies, Texmo Pipes, Shree Ganesh Forgings, Zenith Birla, Blue Star, BGR Energy Systems, Ansal Properties, Aarti Industries

Vardhman Textiles, Time Technoplast, Shilpa Medicare, Tamil Nadu Newsprint, Patel Integrated Logistics, Jai Corp, Essel Propack, Zodiac Clothing Company, Orissa Minerals Development Company, Mawana Sugars, Bajaj Hindusthan Sugar, Amrutanjan Health, Allied Digital Services, Everest Kanto Cylinder, Gallantt Ispat, Talwalkars Better Value, Bodal Chemicals, Kilitch Drugs,

Ashoka Buildcon, Manappuram Finance, Prime Focus, Parsvnath Developers, Redington (India), Godrej Industries, Gujarat Narmada Valley Fertilizers, Hotel Leela Venture, Sintex Industries, Saregama India, Electrosteel Castings, Mercator, JB Chemicals, Sakthi Sugars, Madhucon Projects, IPCA Laboratories, Morepen Laboratories, Reliance Infrastructure, Apollo Hospitals,

Opto Circuits, Kernex Microsystems, Kaveri Seed Company, Info Edge, Power Finance Corporation, DB Realty, Amtek Auto, Uflex, West Coast Paper Mills, Indoco Remedies, India Nippon Electricals, Jindal Cotex, Esab India

NHPC Q1: Consolidated profit rises 16.2 percent to Rs 989.3 crore versus Rs 851.7 crore, revenue climbs 12.5 percent to Rs 2,610 crore versus Rs 2,319.4 crore YoY.

BHEL Q1: Loss at Rs 217.7 crore against profit of Rs 40.7 crore, revenue falls 23.7 percent to Rs 4,532.5 crore versus Rs 5,942 crore YoY.

Future Consumer Q1: Loss at Rs 15.1 crore versus loss of Rs 6.1 crore, revenue rises 29.3 percent to Rs 1,048 crore versus Rs 810.9 crore YoY.

BPCL Q1: Profit falls 65.6 percent to Rs 1,075 crore versus Rs 3,124.9 crore, revenue rises 3.1 percent to Rs 76,318 crore versus Rs 73,990 crore QoQ.

SAIL Q1: Net profit down 87.3 percent at Rs 68.8 crore versus Rs 540.4 crore, revenue down 6.8 percent at Rs 14,820 crore versus Rs 15,907.2 crore, YoY

Oil India Q1: Consolidated profit at Rs 847.2 crore against loss of Rs 70.6 crore, revenue rises 9.2 percent to Rs 3,380.9 crore versus Rs 3,097.3 crore QoQ.

Sunteck Realty Q1: Consolidated net profit down 51.4 percent at Rs 33.2 crore versus Rs 68.25 crore, revenue down 17.3 percent at Rs 174.6 crore versus Rs 211.1 crore, YoY

Sadbhav Infra Q1: Consolidated net loss at Rs 70.1 crore versus Rs 65.6 crore, revenue down 0.2 percent at Rs 795.9 crore versus Rs 797.5 crore, YoY

Bombay Burmah Q1: Consolidated net profit up 82.7 percent at Rs 122.12 crore against Rs 66.83 crore, revenue up 5.8 percent at Rs 2,784.8 crore against Rs 2,631.4 crore, YoY

Motherson Sumi Q1: Consolidated net profit down 25.2 percent at Rs 331.5 crore versus Rs 443.1 crore, revenue up 13.7 percent at Rs 16,792.5 crore versus Rs 14,775.5 crore, YoY

VRL Logistics Q1: Net profit was up 13.5 percent at Rs 27.45 crore versus Rs 24.18 crore, revenue was up 2.1 percent at Rs 539.6 r versus Rs 528.5 crore, YoY

Chambal Fertilisers Q1: Consolidated net profit was up 6.1 percent at Rs 164.4 crore versus Rs 155 crore, revenue was up 29.8 percent at Rs 2,871.1 crore versus Rs 2,211.4 crore, YoY

Divis Lab Q1: Consolidated net profit was up 1.8 percent at Rs 272.4 crore versus Rs 267.7 crore, revenue was up 16.8 percent at Rs 1,162.9 crore Rs 995.2 crore, YoY

PNC Infra Q1: Consolidated net profit was up 51.8 percent at Rs 178.5 crore versus Rs 117.6 crore, revenue was up 66.4 percent at Rs 1,524.5 crore versus Rs 916.4 crore, YoY

Goodyear India Q1: Net profit up 5.9 percent at Rs 26.25 crore versus Rs 24.78 crore, revenue down 8.3 percent at Rs 490.3 crore versus Rs 534.6 crore, YoY

NTPC Q1: Consolidated net profit was up 5.6 percent at Rs 2,840.3 crore versus Rs 2,689 crore, revenue was up 8 percent at Rs 25,931.1 crore versus Rs 24,013.2 crore, YoY

Hindustan Copper Q1: Consolidated net profit was down 47.4 percent at Rs 19.2 crore versus Rs 36.5 crore, revenue was down 27.2 percent at Rs 304.1 crore versus Rs 417.9 crore, YoY

Caplin Point Q1: Consolidated net profit up 34.2 percent at Rs 50.23 crore versus Rs 37.42 crore, revenue up 31.5 percent at Rs 192.6 crore versus Rs 146.5 crore, YoY

Balkrishna Industries Q1: Consolidated net profit was down 21.4 percent at Rs 176.8 crore versus Rs 225.1 crore, revenue was down 11 percent at Rs 1,198.9 crore versus Rs 1,347.6 crore, YoY

Finolex Industries Q1: Consolidated net profit was down 34.8 percent at Rs 73.2 crore versus Rs 112.3 crore, revenue was up 14 percent at Rs 943.8 crore versus Rs 827.8 crore, YoY

Godfrey Phillips Q1: Consolidated net profit at Rs 118.6 Crore versus Rs 57.4 crore, revenue was up 39.7 percent at Rs 841.3 crore versus Rs 602.1 crore, YoY

NIIT Q1: Consolidated net profit at Rs 1,090 crore versus Rs 17.9 crore, revenue was down 1.8 percent at Rs 210.3 crore versus Rs 214.2 crore, YoY

APL Apollo Tubes Q1: Consolidated net profit was up 10.2 percent at Rs 51.8 crore versus Rs 47 crore, revenue was up 23.6 percent at Rs 2,071.6 crore versus Rs 1,676.5 crore, YoY

Narayana Hrudayalaya Q1: Profit rises to Rs 20.5 crore versus Rs 0.5 crore, revenue climbs 15.7 percent to Rs 558.3 crore versus Rs 482.6 crore YoY.

Universal Cables Q1: Profit increases 7.1 percent to Rs 18.65 crore versus Rs 17.42 crore, revenue jumps 35.1 percent to Rs 426.4 crore versus Rs 315.7 crore YoY. Prasanta Pandit resigns as CFO.

Allahabad Bank: Lender reduced interest rate (MCLR) by 15 to 20 bps.

IRB Infra - Mhaiskar Infrastructure, a wholly owned subsidiary of the company, has successfully completed concession period of Mumbai Pune Project on August 10, 2019 and subsequently, SPV has handed over the Project to the MSRDC

Sintex Plastics Technology divest entire equity holding in its indirect wholly ownedsubsidiary, Sintex NP SAS

Varroc Engineering to acquire 74% stake in CarIQ, a leading Telematics solution provider

Cox & Kings

Malvern Group, the holding Company of Superbreak and Laterooms had declared insolvency in UK

Malvern Group is 49% owned by Cox & Kings (Investment value as on March 31, 2019 is Rs 9.21 crore)

Alembic Pharmaceuticals receives USFDA approval for Dorzolamide Hydrochloride Ophthalmic Solution USP, 2%

Saudi Aramco and Reliance Industries (RIL) sign a non-binding letter of intent to acquire a 20% stake in O2C division of RIL at an enterprise value of USD 75 billion

Reliance Jio Infocomm, a subsidiary of Reliance Industries and Microsoft Corp in alliance to accelerate digital transformation in India

Grasim Industries board meeting on August 14 to consider raising of funds through issue of non-convertible debentures, in one or more tranches, on private placement basis

DB Realty: Pledge on 2.1 percent promoter stake released on August 6.

Praj Industries has entered into a cooperation agreement with Dedini S/A lndustrias de Base to provide ethanol production technologies to the Brazilian market

Tata Motors: JLR July retail sales rose 5 percent to 37,945 units, Jaguar sales increased 3.6 percent to 11,386 units and Land Rover sales rose 5.6 percent to 26,559 units YoY. China sales saw a recovery in July.

Tata Motors: S&P took company off credit watch, saying Tata Motors' outlook negative on cash outflows, brexit.

Indoco Remedies - Anacipher clears USFDA inspection with zero 483

Torrent Pharma: USFDA classified Indrad facility as official action indicated (OAI)

USFDA completes inspection of Natco’s Mekaguda active pharmaceutical ingredient facilityY

Sonata Software announces partnership with Agastya International Foundation to support creativity and innovative thinking in rural schools

Unichem Laboratories received ANDA approval from USFDA for Chlorthalidone Tablets

IBM and Tata Communications join Hedera governing council

JSW Steel: Crude steel production down 4 percent to 13.17 lakh tonnes against 13.78 lakh tonnes YoY.

Andhra Bank has decreased its marginal cost of funds based lending (MCLR) w.e.f. August 16, 2019

Bank Of India told CNBC-TV18: Bank has cut lending rates by 25 bps and margins will be negatively impacted due to reduction in lending rate.

NDTV: Founders Radhika & Prannoy Roy prevented from leaving the country. CBI is probing allegations of bank fraud, money laundering against Roys & NDTV

Vinati Organics - CARE has upgraded the ratings of Long-term/Short-term Bank Facilities to CARE AA; stable / CARE A1+

Suzlon Energy clarified that the company continues to work on significant debt reduction, as committed. The company has been exploring various funding options like raising fresh equity and the company has been engaging with its lenders in this regard to arrive at mutually acceptable and viable options.

Zuari Agro - After the repair of tube leak of the PG- Reboiler in the CO2 removal section of Ammonia Plant, the plants could not be started, due to non-availability of gas supply, due to non payment of dues to GAIL, which was due to liquidity issues arising mainly out of delay in release of subsidy

MORE WILL UPDATE SOON!!

Our STBT call on Amaraja Battery Hits its Target.........Join Our Team.....

On 10th Aug 2019  We had given a STBT  on Amaraja Battery (Fut-29 Aug ) around 640 for the target of  633--627

Look at the call as Today it made a low of 619 and now trading around 630

Patience wins the trade.......

We Booked Full Profit Today around 624

Profit of Rs 11200 on 1  Lot....... 

We Believe in our Research......

Hope You Minted Profit.

This call was given free on our blog and in Our whatsapp group.

Still Looking for trade or confused!!..............Don't Worry Join Our Team......

KEEP TRADING FOR FREE>Just Click on  link below

https://tradingcalls-indianmarketpulse.blogspot.com/

or

 E-Mail Us at indianmarketpulse@gmail.com

MORE WILL UPDATE SOON!!

Our BTST Trade of BPCL hits its 1st Target.......Approaching its 2nd Target

  

On 10th Aug 2019  We had given a call to Buy BPCL (Fut-29 Aug ) around  for the target of  348--353

Look at the call as Today it made a high of 350.75 and now trading around 349.80

Patience wins the trade.......

We Booked Part  Profit Today around 348

Profit of Rs of 16200 on 1  Lot....... 

We Believe in our Research......

Hope You Minted Profit.

This call was given free on our blog and in Our whatsapp group.

Still Looking for trade or confused!!..............Don't Worry Join Our Team......

KEEP TRADING FOR FREE>Just Click on  link below

https://tradingcalls-indianmarketpulse.blogspot.com/

or

 E-Mail Us at indianmarketpulse@gmail.com

MORE WILL UPDATE SOON!!

Govt pep talk helps market snap 4-week losing streak; 19 stocks rose 10-30% in BSE500

Such sharp rallies are often a result of some pep talk or some relief measure which often fizzles out trapping the bulls who bought on the hopes that a new rally will begin.

The Indian market snapped a four-week losing streak to close with gains of over 1 percent. The Nifty rose 1.02 percent while the S&P BSE Sensex closed with gains of 1.25 percent for the week ended August 9.

The S&P BSE Sensex is now back above 37,000 while the Nifty also managed to reclaim 11,100 levels for the first time since July 31.

The broader market performed in line with benchmark indices as the S&P BSE Midcap index rose 0.92 percent while the S&P BSE Smallcap index closed with gains of 1.62 percent for the week ended August 9.

More than 300 stocks in the S&P BSE 500 index closed in positive while as many as 19 stocks closed with gains of 10-30 percent which included names like Jammu & Kashmir Bank, Venky’s, Apar Industries, Future Consumer, Vinati Organics, Central Bank of India, Jet Airways, and SRF among others.

In the S&P BSE Smallcap index, as many as 71 stocks rose 10-40 percent which included names like Care Ratings, Minda Industries, IFB Industries, LT Foods, Mcleod Russel, Lumax Industries, Rolta India, and Navkar Corporation among others.

The week started on a muted note but then momentum picked up after reports suggested that the government might exempt foreign investors from higher tax surcharge and could roll out measures for auto, realty, and the public utility sectors.

The hope based rally pushed the index back above 11,100 on the Nifty. Considering the fact the slump for the past four weeks, a technical bounce back was on the cards, suggest experts. Hence, investors should not put too much weight on the past two days of upward movement.

After witnessing ultra-pessimism, equities made a smart recovery pinning hopes on the government to grant relief in the form of a reduction in FPI surcharge tax which may or may not happen.

Such sharp rallies are often a result of some pep talk or some relief measure which often fizzles out trapping the bulls who bought on the hopes that a new rally will begin.

Modi further added that for the fact that Mr Market was so deeply oversold, a rally was in any case expected. So long as gold depicts strength it would be safe to conclude that people still have a lower allocation in equities, as gold and equities have an inverse correlation to each other and whenever there is less faith in equities, the Street turns towards gold as a safe haven.

Markets will react to India’s industrial output data which grew two percent in June, a three-month low, according to the Index of Industrial Production (IIP) data released by the government on August 9.

Industrial output, or factory output, is the closest approximation for measuring economic activity in the country's business landscape.

On the macro front, D-Street would also track inflation data as well as any concrete measure which come out from the government side for real estate, auto, and banking sector. On the global front, any developments on the trade war front will keep investors on the edge.

For the next week, the stocks of Auto, Real Estate, Pharma and FMCG sector could move upward. The market is waiting for the government to provide some relief for FPI surcharge and stimulus for auto sectors.

On the international front, there would be CPI & Core CPI data on August 13, Core Retail Sales, Philly Fed Manufacturing Index, and Retail Sales data on August 15.

Technical View:

Nifty reclaimed 11,100 levels for the week ended August 9 which is a positive sign but it faced selling pressure around its 200-days moving average (DMA).

On technical indicators, the MACD has now converged upward on the daily chart and also, the RSI has recovered from the oversold zone on the same chart which is now placed at 42.34 levels.

Nifty managed to hold above 11,100 levels and formed a small-bodied candle on the daily scale while bullish candle on a weekly scale which suggests that buying is visible at lower levels.

Now, till it holds above 11,000 zones it could extend its gains towards 11,180 then 11,250 zones while on the downside supports are seen at 10,950 then 10,880 levels,

MORE WILL UPDATE SOON!!

Wall Street ends down amid more trade woes, high volatility

The Dow Jones Industrial Average fell 90.75 points, or 0.34%, to 26,287.44, the S&P 500 lost 19.44 points, or 0.66%, to 2,918.65 and the Nasdaq Composite dropped 80.02 points, or 1%, to 7,959.14.

US stocks fell on Friday following renewed jitters over the US-China trade war, capping a week of trading that saw big swings and high volume.

President Donald Trump said the United States and China were pursuing trade talks but he was not ready to make a deal, fanning fears over the impact of the trade war on the global economy.

Trump also said the United States would continue to refrain from doing business with Chinese telecoms equipment giant Huawei Technologies.

The week was marked by wild swings, but indexes finished nearly flat on the week. This week’s volume on U.S. exchanges was also the biggest weekly total of the year, exceeding 41 billion shares.

On Friday, all three indexes were down more than 1% in early trading and rebounded later in the session, with the Dow briefly turning positive at one point. This left a 315-point swing between the blue-chip index’s high and low of the day.

The frequent comments on trade are “leaving investors whipsawed,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

“As volatility has picked up, you’ve gotten more interest on the part of traders, and that in turn has led to even higher volume,” he said. “When you get moves like this and reversals, it brings a lot of high-frequency traders in and short-term traders.”

Shares of chipmakers and other tariff-sensitive technology companies fell, with the Philadelphia SE Semiconductor index .SOX down 1.8%.

The Dow Jones Industrial Average fell 90.75 points, or 0.34%, to 26,287.44, the S&P 500 lost 19.44 points, or 0.66%, to 2,918.65 and the Nasdaq Composite dropped 80.02 points, or 1%, to 7,959.14.

Shares of Amgen jumped 5.9% after news that a US judge said patents relating to the Amgen’s blockbuster rheumatoid arthritis drug Enbrel were valid, denying a challenge by Novartis AG.

Uber Technologies Inc shed 6.8% after the ride-hailing company reported a record $5.2 billion quarterly loss and revenue that fell short of Wall Street targets.

Nektar Therapeutics shares also plunged, a day after the drug developer flagged manufacturing issues with its experimental cancer drug bempeg.

Declining issues outnumbered advancing ones on the NYSE by a 1.99-to-1 ratio; on Nasdaq, a 2.07-to-1 ratio favored decliners.

The S&P 500 posted 46 new 52-week highs and nine new lows; the Nasdaq Composite recorded 56 new highs and 129 new lows.

MORE WILL UPDATE SOON!!

‘Ignore the noise’; the market cycle will bottom before the economic cycle

Although, there are various negatives around, we expect the market to make a bottom far before the shape of the economy improves because that is the nature of market cycles.

July was a tough month for the Indian stock market. The Nifty shed about 6 percent during the month, making it the worst July in 17 years for the benchmark index.

The pain was worse in broader markets as BSE Midcap and Smallcap indices fell 8.52 percent and 11.16 percent, respectively, during the month. The carnage in July also extended to the global markets as Dow Jones moved in the red despite a rate cut and dovish outlook from the US Federal Reserve.

Pessimism is hitting peak levels in the market and the economic situation is also benign. However, history has always taught us one thing that the market cycle will bottom before the economic cycle.

Despite global and domestic headwinds, we expect the market to make a bottom far before the shape of the economy improves because that is the nature of market cycles.

Markets are always ahead of the curve and as investors, we need to follow the signs the market is giving.  All is not lost and this is the time investors must cut out the noise and maintain their poise.

The trilemma of flows, negative corporate commentary and policy issues impacting markets. It’s a three-pronged problem, the FPI sell-off is what has hit markets first.

Foreign portfolio investors (FPIs) have sold stocks worth $2.5 billion. The taxation surcharge is what is being pointed out by most plaudits, but on closer examination, we realize that from pure taxation point of view, the additional surcharge should amount to something in the range of Rs 400 crore, which is a pretty insignificant amount for FPIs who have hundreds of billions of dollars under management.

In reality, it is a sentiment issue, and the sentiments have been worsened by the weak commentary given by most companies post the Q1FY19 results.

Most sectors have missed earnings estimates, baring few cement companies and select banks. Auto and consumption stocks continue to take a hit.

The market is estimating 24 percent EPS growth for the Nifty, about 70 percent of which is expected to be contributed by banks. However, the poor numbers reported by select banks, such as Yes Bank, RBL and DCB bank, has spooked the market.

Furthermore, baring cement production growth, most high-frequency indicators like auto numbers, PV sales, IIP growth, are also not encouraging.

A possible way out of this mess is if the government intervenes and cuts rates further, those rate cuts should also result in a meaningful transmission.

We already saw some small shreds of evidence of this when the State Bank of India cut FD rates. Moreover, the liquidity surplus in the banking system is nearly Rs 2 lakh crore which should also help accelerate the transmission.

The 10-Year yield is around 6-6.5 percent, while corporates are borrowing at 4 percent higher. Going forward, the corporate bond spreads have to come down.

The RBI has definitely induced liquidity into the system but it is stuck in the interbank levels, when it transitions to the corporate levels we will see some relief.

Secondly, there are talks that the government will consider giving some relief to the SEBI listed FPIs from the super-rich levy. If that goes through the sentiments will change.

The Nifty50 is finally reflecting the current economic reality.

The Nifty was still trading near all-time highs in spite of the broad-based sell-off and slowdown seen in the economy, but now some market leaders such as HDFC twins, Bajaj twins, Reliance Industries, Larsen & Toubro, and other HRITHIK stocks have also started falling.

This has created a dual impact where mid and smallcaps were anyway in a downtrend and now the large Nifty stocks have started showing weakness dragging down the headline Nifty.

Sentimentally there is no respite as all indices are in the red. The Nifty50 is so polarized that if we construct a #Nifty 40 index i.e. stripped of the top 10 cos and kept the balance 40, the Index would actually be at 9,000 levels.

The Nifty is currently trading at 11,000. Since January 2018, the top 10 market cap companies have rallied 21.4 percent whereas the remaining 40 are down 14.6 percent.

Now, the fear in the market is that the Top 10 will also join the remaining 40, so convergence will be on the downside.

Before the slump, the market was looking overvalued despite a weak economic situation. Now, the market valuation is starting to look in line with the economy.

If the fall gets arrested, the valuations would reach a level where it aligns with the economic reality and that may enable some investors to take contrarian bet on the market.

The market cycle will bottom before the economic cycle!

The collective wisdom of Mr Market is stronger than all us investors. Eventually, the market will start discounting the future and look beyond the noises of the present.

We have been falling for the past 18 months because negative news has been running amok, but markets have a mind of their own and seldom move in tandem with the economy.

Bottoming out of valuations will be the key, after a point the market will stop looking at the next couple of quarters and will start taking the next few years into account.

In hindsight, if we step back and widen our lens, we will find that there are many well run and growing businesses in our market that are available at single-digit valuations. Mr Market will take cognizance of this and when it happens the market will bottom out and turn.

Excesses on either side are unsustainable, markets have definitely outrun themselves and just like how the excessive bull run of 2017 was not sustainable on the upside, this particular sell-off will not be sustainable on the downside for long and market will have to mean revert.

How low do we go from here!

The Nifty is reaching long term Moving Average support. If one uses a 100-period moving average to track the long term trend of the Nifty, then it is clear that the market is heading down into support.

On the attached chart we can see that the 100 EMA has provided support so many times in the past that it is difficult to ignore its influence on the trends. Barring two occasions (2008 and 2011), the index never really lost this support on a sustained basis. There were marginal penetrations in 2013 and 2016 but those were reversed very swiftly.

Investment implications

The problems are partly sentimental and partly due to policy issues. However, we expect that the market will bottom out in the next 2 months, even though the economy continues to slow down.

There are many fantastic companies out there that have given meaningful corrections and are only part of temporary slowdown.

At Plus Delta Portfolios, we are using this opportunity to identify winners in this pullback. We will be buying the market once the dust settles.

We are constantly analyzing the trends and where we see earnings growth coming in the Q1FY20 results coupled with some traces of momentum in the stock we will be ready to enter.

This is an excellent opportunity for investors to build a portfolio form a 3-5 year perspective as the margin of safety is very high since we are nearing the bottom.

MORE WILL UPDATE SOON!!