MOSt Market Outlook

29th August 2017

Nifty Chart

Nifty Outlook

Index

Nifty Cash

BankNifty

CMP

9912

24377

R1

9950

24500

R2

10020

24750

S1

9850

24250

S2

9820

24000

Market Drivers

Indian markets continued the up move helped

by Infosys which was among the top gainers post

Nandan Nilekanis return. Banking, finance, auto

and Pharma saw gains as well. Ending of Doklam

standoff also helped the markets. Revival of rains

and reduction of deficit will help on the

monsoon front. On the flows, FIIs were net

sellers but the quantum has gone down over the

last few days. However North Korea action will

likely play spoil sport in early trades at least as

most markets are reacting negatively to the

missile launch. Changes in index were also

announced. ACC, Tata Power, Tata Motor DVR and

Bank of Baroda move out while Bajaj Finance,

HPCL and United phosphorous are new entrants.

Nifty index opened positive and continued its up move for

fourth consecutive session. It has been making higher lows

from last four trading sessions and now till it holds above

9880 zones, bounce back move could continue. It formed a

Northern Doji candle followed by a gap up opening. Now it

has to cross and hold above immediate hurdle of 9928-9950

zones to witness an up move towards 10020 and 10050 while

a hold below 9880 could drag it towards 9820 then 9775.

Currency (USDINR) Outlook

USDINR

64.11

S1

63.80

S2

63.65

R1

64.25

R2

64.60

Trading Idea - Cash & Future

Scrip

M&MFIN

Reco

Buy

MBP

415

SL

407

Target

438

Sideways-to-negative move will be seen as long as 64.25

is capped as immediate resistance.

Highest Call OI

Instrument

Strike

10000

25000

OI

5869725

1357240

Chg in OI

74025

208160

Nifty 31 - Aug

Bank Nifty 31 - Aug

Sectoral Outlook

Sector

NBFC

AUTO

Outlook

POSITIVE

POSITIVE

Corporate Action:

Dividends -CUPID,

IVC, ONMOBILE

Highest Put OI

Instrument

Strike

9800

24000

OI

6538125

1149800

Chg in OI

406725

-147520

Nifty 31 - Aug

Bank Nifty 31 - Aug

Security in Ban period:

BEML, GMRINFRA, HDIL, IBREALEST, INDIACEM, JPASSOCIAT,

JSWENERGY, JUSTDIAL, RELCAPITAL

Trading Idea - Derivatives

STRATEGY UPDATE : BANK NIFTY BULL CALL SPREAD

Instrument

B/S

Lot

Reco

CMP

BANKNIFTY CE 24300

BANKNIFTY CE 24600

Buy

Sell

1

1

181

64

173.2

49.30

Today Event

NA

MAX RISK : 117 POINTS, Rs. 4680

MAX REWARD : 183 POINTS, Rs. 7320

MOSt Market Outlook

29th August 2017

Trading Calls

M&MFIN

Buy

MBP :

Target :

INR 415

INR 438

Derivatives Idea

BANK NIFTY

BULL CALL SPREAD

Buy 1 Lot 24300 CE

Sell 1 Lot 24600 CE

M&M Finance made a long candle rallying from the support at

407

3

It formed a tweezers bottom pattern which is taking place at

the support of rising trendline at previous swing highs

3

It may see a rally towards 438, thus suggesting to buy at current

levels with a stop below 407

3

3

3

3

3

3

It has managed to hold above 24000 zones even after the sell-

ing pressure in last two week

It has respected to its 50 DEMA and surpassed its falling supply

trend line

Intact Put open interest at 24000 and fresh Put writing at higher

strikes suggests an up move

Call writing at 24500 could restrict its upside towards 24500-

24600

Thus a low risk, Bull Call Spread is recommended

FII & DII Activity (INR in Cr)

FII F&O

24th Aug

-697

1044

23rd Aug

-1158

930

Institution

INDEX FUTURES

INDEX OPTIONS

STOCK FUTURES

Net B/S

-536

2,446

698

OI

Long Unwinding

Call Buying

Short Covering

Cat.

FII

DII

28th Aug

-125

476

MOSt Market Outlook

29th August 2017

Long Built-up

Short Built-up

Long Unwinding

Short Covering

Nifty Option OI

1- Day change in Nifty OI

MOSt Market Outlook

29th August 2017

Research Notes

Morning Meet Notes

Infosys - (CMP913, TP1050, Recom BUY)

o

Infosys appointed Mr. Nandan Nilekani as non-executive non-independent Chairman

o

Accepted the resignation of Mr. R. Seshasayee, Professor Jeffrey Lehman & Professor John Etchemendy

o

Dr. Sikka stepped down as Executive Vice Chairman & as a Director

o

Ravi Venkatesan would continue as an Independent Director

o

We value it at TP of INR1050 - cutting the target multiple to 15x from 17x

Navneet Education - (CMP157, TP215, Recom BUY)

o

Publication business grew 10% YoY in 1QFY18 - expect the segment to grow 15% in FY18

o

Stationery business declined 12% YoY in 1QFY18 - to be reversed - 10% growth in exports in FY18

o

Indiannica content to promote growth - expected to post revenue CAGR of 22% over FY17-20

o

We expect 16% revenue CAGR and 19% PAT CAGR over FY17-20

o

We value it at TP of INR215 (20x FY19E EPS )

India Durables - Restocking picks up in August post a weak July, Inverter ACs at 35% of sales in May-June; Voltas has a low share

o

LG, Samsung and Whirlpool dominate washing machines and Refrigerators

o

Voltas-Beko JV: Has recently hired Godrej Appliances business head

o

Air coolers: Symphony retains lead by a big margin; Bajaj and Orient other bestsellers

o

Voltas: We have a Sell rating on the stock

o

Blue Star: We value it at TP of INR650 (Neutral) (UCP at 27x FY19E EPS, MEP at 15x, Professional Electronics at 20x).

MOSt Market Outlook

29th August 2017

MOSt Market Outlook

Chandan Taparia

Research Analyst (Derivatives & Technical Analyst)

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