MOSt Market Outlook– Detailed Report

MOSt Market Outlook

22nd August 2017

Nifty Chart

Nifty Outlook

Index

CMP

Nifty Cash

9754

9820

9880

9710

9600

BankNifty

23936

24250 24500 23750 23500

Nifty index failed to hold above its crucial hurdle of 9880 and

corrected sharply after breaking its immediate support of 9775

mark. During the day it fell down towards 9740 and finally closed

the session with the loss of around 83 points. It formed a bearish

candle on the daily chart and closed below to its 50 DEMA which

has a negative implication if follow up selling continues. It is just

few points away from the major support trend line by connecting

the lows of 9088, 9448, 9685 and 9720. If this trend line is broken

decisively then short term trend may continue its pace of selling

pressure towards 9600 zones while on the upside resistances are

shifting lower to 9820 and 9850 marks.

Currency (USDINR) Outlook

USDINR

64.20

149

Market Drivers

Indian markets moved lower moving closer to the

lows of the month driven primarily by likes of Infosys.

Infy was once again a big loser. Banking also lost some

ground. The last legs of results have not been

encouraging. Flows have continued to be negative

from FIIs. Geopolitical issues, earnings

disappointment, high valuations and stock specific

issues have affected markets. Infy in the US market

managed to hold ground which should help the stock

find some support. Essar Oil deal will be supportive

for banks. Overall post the sharp decline, we could

see some consolidation but trading sentiment is likely

to remain tentative.

Trading Idea - Cash & Future

Scrip

Bank Baroda

64.00

63.80

64.40

64.55

Reco

Sell

MSP

145

Target

136

Sideways consolidation in the range of 64 - 64.40 will be seen in

short-term.

Highest Call OI

Instrument

Nifty 31 - Aug

Bank Nifty 31 - Aug

Bank Nifty 24 - Aug

Strike

10000

25000

24500

5896800

1178720

871000

Chg in OI

-7125

-43320

253520

Corporate Action:

Dividends

-MANINFRA, ENIL, GINISILK, MANAPPURAM, OBIL,

PFIZER, PFIZER, SAFARIND, SHARDA, TRIVENI

KANCOTEA - Bonus issue 2:1

Sectoral Outlook

Sector

PUS BANKS

AUTO

Outlook

NEGATIVE

Highest Put OI

Instrument

Strike

9800

24000

23000

5327100

1099960

442240

Chg in OI

-565725

127640

89040

Nifty 31 - Aug

Bank Nifty 31 - Aug

Bank Nifty 24 - Aug

Security in Ban period:

BEML, FORTIS, HDIL, IBREALEST, JPASSOCIAT, JSWENERGY,

JUSTDIAL

Trading Idea - Derivatives

STRATEGY UPDATE : TATASTEEL BULL CALL SPREAD

Instrument

B/S

Lot

Reco

CMP

TATASTEEL CE 630

TATASTEEL CE 640

Buy

Sell

12.00

8.00

8.35

5.00

Today Event

Board Meetings - care Ratings, GATI, NIIT Ltd

AGM - Eclerx, Hindustan Copper, L&T, MCX, Reliance Defense,

Tata Motor, Tata Motor DVR

EGM - L&T, Results - CARE Ratings and GATI

Reward / Target: 12000, Risk / SL: 8000

MOSt Market Outlook

22nd August 2017

Trading Calls

Bank Baroda

Sell

MSP :

Target :

INR 145

INR 136

Derivatives Idea

TATA STEEL

BULL CALL SPREAD

Buy 1 Lot 630 CE

Sell 1 Lot 640 CE

Price is in a very sharp decline and the small pull back rally

seen in last couple of days allows us to sell short this stock

It broken the support of 149 and now holding below this major

support zone

It may see a decline towards 136, thus suggesting to sell on a

bounce back move with a stop above 149 for a downside target

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

18th Aug

-2182.12

584.59

17th Aug

-981.05

828.59

Institution

INDEX FUTURES

INDEX OPTIONS

STOCK FUTURES

Net B/S

486

194

348

Long Built Up

Call Long

Long Built Up

Cat.

FII

DII

21st Aug

-1983

475

MOSt Market Outlook

22nd August 2017

Long Built-up

Short Built-up

Long Unwinding

Short Covering

Nifty Option OI

1- Day change in Nifty OI

MOSt Market Outlook

22nd August 2017

Research Notes

Morning Meet Notes

Infosys - (CMP 874, TP1030, Recom BUY)

The fall in valuations (14% in two sessions) may be stemmed amid the buyback

Return of business stability may be prolonged

New CEO search, Peace between the current Board & Mr. Narayana Murthy

Factors may limit upside in INFO despite attractive valuations - Key man risk plays out, Comforting clients is another challenge

We value it at TP of INR1,030 (15x forward earnings) implies a 17% upside

MindTree Consulting - (CMP 462, TP 450, Recom Neutral)

Getting ready for the next phase…

Differentiated proposition in Digital

Revenue growth outlook downgraded in 1QFY18

Near-term profitability challenges

Our price target of INR450 discounts forward earnings by 13x

Gateway Distriparks - (CMP 237, TP272, Recom BUY)

Reported EBITDA (Rail + CFS) of INR450m (-19% YoY, -14% QoQ)

PAT of INR180m (-20% YoY, -19% QoQ)

Rail reported EBITDA of INR252m (-24% QoQ), Rail realization stood at INR32,810/TEU (-12% QoQ), EBITDA/TEU dec 20% YoY

Container volumes stood at 51,000TEU (-12% QoQ)

Consol. CFS EBITDA +3% QoQ, Consol. volume stood +5% QoQ, Realizations at -1% YoY, EBITDA/TEU at -2% QoQ

We value it at TP of INR272 (CFS business at 11x FY20E earnings, Rail segment at 12x FY20E EV/EBITDA)

NTPC - (CMP 173, TP 204, Recom BUY)

Kudgi (3 x 800MW = 2,400MW): On track for full CoD in FY18

Solapur (2 x 660MW): Expect unit-1 CoD by September 2017

Expect regulated equity to grow at ~20% CAGR and consolidated PAT to grow at 12% CAGR over FY17-20

Earnings growth to accelerate; valuations attractive

MOSt Market Outlook

22nd August 2017

MOSt Market Outlook

22nd August 2017

Currency Ideas

USDINR

EURINR

USDINR trade in a sideways range in the previous session closing at 64.20.

Immediate support remains at 64.00 whereas resistance is pegged at 64.40.

The consolidative range move is likely to continue for the session and price

break on either side of 64.00 - 64.40 will signify further trend direction.

EURINR traded sideways with positive bias in the previous session closing at

75.52.

Critical support for pair remains at 75.00 whereas resistances are at 76.20

levels.

Bias looks positive for the pair and dip towards 75.40 will be good buying

opportunity for short-term targeting 76.20.

MOSt Market Outlook

Chandan Taparia

Research Analyst (Derivatives & Technical Analyst)

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MOSt Market Outlook

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