MOSt Market Outlook

21st August 2017

Nifty Chart

Nifty Outlook

Index

Nifty Cash

BankNifty

CMP

9837

24074

R1

9880

24300

R2

9928

24500

S1

9775

23750

S2

9710

23500

Market Drivers

US markets closed marginally lower. Asia is mixed to

positive. Indian markets lost ground on Friday with

Infosys being the top loser post Vishal Sikka's

resignation. Fear of transition getting derailed in a

challenging environment led to correction. Board

announced buyback on Saturday on expected lines.

On global front, crude prices inched higher.

Commodities could see gains. Domestic markets have

been volatile and near term volatility looks likely to

continue.

'Nifty index opened negative and corrected towards 9783 mark.

However it witnessed a sharp recovery from lower levels but finally

closed the day on a negative note with the loss of around 65

points. It formed a Hammer candle on the Daily chart and

respected to its 50 DEMA but sustained supply is being witnessed

at higher zones. Now it has to cross and hold above 9880 to witness

an up move towards 9928-9950 zone while on the downside

supports are seen at 9775 then 9710 levels.

Currency (USDINR) Outlook

USDINR

64.20

S1

64.00

S2

63.75

R1

64.35

R2

64.50

Trading Idea - Cash & Future

Scrip

BPCL

Reco

BUY

MBP

503

SL

490

Target

535

The pair is likely to trade in a higher range between intraday

support at 64.00 and immediate resistance at 64.35 with a

positive bias.

Highest Call OI

Instrument

Strike

OI

5903925

1222040

617480

Chg in OI

535350

-224280

184440

Nifty 31 - August

10000

Bank Nifty 31 - August 25000

Bank Nifty 24 - August 24500

Sectoral Outlook

Sector

Power

Oil & Gas

Outlook

Positive

Positive

Corporate Action:

Dividends -

COMPEAU ; FEL; FELDVR; FLFL; GOCLCORP

HGS; JAYSYN; MALLCOM; MINDAIND; SPHEREGSL

SUNILHITEC

Highest Put OI

Instrument

Strike

OI

5892825

972320

342320

Chg in OI

-522375

39480

99440

Nifty 31 - August

9800

Bank Nifty 31 - August 24000

Bank Nifty 24 - August 24000

Security in Ban period:

BEML ; FORTIS; HDIL; IBREALEST; JPASSOCIAT; JSWENERGY;

JUSTDIAL

Today Event

Trading Idea - Derivatives

STRATEGY : TATASTEEL BULL CALL SPREAD

Instrument

B/S

Lot

Reco

TATASTEEL CE 630

TATASTEEL CE 640

Buy

Sell

1

1

12.00

8.00

CMP

12.00

8.00

N.A.

Reward / Target: 12000, Risk / SL: 8000

MOSt Market Outlook

21st August 2017

Trading Calls

BPCL

Buy

MBP :

Target :

INR 503

INR 535

Derivatives Idea

TATA STEEL

BULL CALL SPREAD

Buy 1 Lot 630 CE

Sell 1 Lot 640 CE

Price action in BPCL saw a hammer on Monday and then there

was this straight rally over next three days.

3

Price has moved up from its support at 480 and it is likely that

there will be a rally towards 535. Consider buying this stock at

current levels with a stop below 490 for an upside target to-

wards 535.

3

3

3

3

3

3

3

Positive sector outlook with sustained buying at every small

decline

It has been making higher top – higher bottom on weekly chart

and given a decent weekly close

A hold above 630 could take the stock towards 640-645 zones

Fresh Put writing at 620 strike suggests limited downside

Call unwinding in 620 and 640 strike suggests an up move

Thus low risk Bull Call Spread is recommended

FII & DII Activity (INR in Cr)

FII F&O

17th Aug

-981.05

828.59

16th Aug

-1090.1

1336.91

Institution

INDEX FUTURES

INDEX OPTIONS

STOCK FUTURES

Net B/S

-385.32

-1,442.01

-664.37

OI

Short Built Up

Long Put Unwinding

Short Built Up

Cat.

FII

DII

18th Aug

-2182.12

584.59

MOSt Market Outlook

21st August 2017

Long Built-up

Short Built-up

Long Unwinding

Short Covering

Nifty Option OI

1- Day change in Nifty OI

MOSt Market Outlook

21st August 2017

Research Notes

Morning Meet Notes

Idea Cellular - (CMP 89, TP 110, Recom BUY)

o

Vodafone-Idea merger is likely to conclude by the end of FY18. Approvals at place.

o

Risk of market share dilution reduced, Synergies not fully factored.

o

Expect the combined entity's EBITDA margin to expand to 32% by FY20 & 36% by FY21.

o

VoLTE feature phone launch unlikely to be disruptive

o

Market should bottom in 2-3 quarters

o

We value it at TP of INR110.

Infosys - (CMP 923, TP 1050, Recom Under Review)

o

Resignation of CEO owing to continuous stream of distractions in recent quarters

o

U B Pravin Rao will take over the reins in the interim

o

Dr Sikka appointed as EVC & will hold office until a permanent CEO & MD takes charge, the deadline - March 31, 2018

o

Key man risk plays out, Comforting clients is another challenge

o

We value it at TP of INR1050 (Cut our target multiple to 15x)

MOSt Market Outlook

21st August 2017

MOSt Market Outlook

21st August 2017

Currency Ideas

USDINR

EURINR

3

USDINR continued to trade in a relatively higher range between 64-64.40 last

week.

The pair tested a 3-week high at 64.40 before closing flat for the period near

64.20.

Looking ahead, 63.90-64 area is likely to act as an immediate support and the

current move could extend higher towards stiff resistance at 64.50 level.

Buying on dips is thus advised from a short-term perspective.

3

GBPINR traded in a relatively lower range last week - closing at a 1.5-month

low at 82.78 - down by about 0.75% for the period.

The pair is now on the verge of breaching support near 82.70. Sustained break

of the same could extend the current decline towards June 2017 low near

81.50.

Selling on break of this support is thus advised.

Stiff higher resistance is at 83.80 level.

3

3

3

3

3

3

MOSt Market Outlook

Chandan Taparia

Research Analyst (Derivatives & Technical Analyst)

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