Motilal Oswal Financial Services

MOSt Market Outlook

9th February 2018

Nifty Chart

Nifty Outlook

Index

CMP

NIFTY

10,576

BANK NIFTY 25,920

R1

10630

26250

R2

10720

26500

S1

10480

25500

S2

10350

25000

Trading Idea - Cash & Future

Scrip

HDFC BANK

Reco

SELL

CMP

1880

SL

1907

Target

1825

'Nifty index opened positive and witnessed buying interest

for the most part of the trading session to settle at 10576. It

formed a Bullish Engulfing Pattern on the Daily scale but

finding hurdle near to 10600-10630 zones from last three

trading sessions. Now it has to cross and hold above 10630-

10650 zones to witness a short term reversal and up move

towards 10720 zones which is 50% retracement of the entire

down leg from 11171 to 10276 levels while on the downside

immediate support is seen at 10480 levels.

Corporate Action:

Company

IBVENTURES

PIDILITIND

SRSFIN

CITURGIA

UNICHEMLAB

MOIL

Ex Date

09-Feb-18

15-Feb-18

16-Feb-18

Purpose

Right Issue

Buy Back

Stock Split

Buy Back

Record Date

12-Feb-18

16-Feb-18

20-Feb-18

Currency (USDINR) Outlook

USDINR

S1

S2

R1

R2

64.41

64.05

64.25

64.65

64.85

Bias remain positive as long as 64.25 - 64.05 is held as

support.

Sectoral Outlook

Sector

BANKS

PHARMA

Outlook

NEGATIVE

NEUTRAL

Market Drivers

Equity market yesterday ended in positive

territory. Nifty gained 100 points (1%) to close at

10,576 and Sensex gained 330 points to close at

34,413. Nifty had slipped 460 (4.5%) points and

mid-cap and small cap stocks fell close to 8-20% in

the last six trading sessions. Cement, Pharma,

Auto, Tech, Metal and Banking & NBFC stocks

witnessed fresh buying. 10-Year G-Sec Y ield

declined 4bps at 7.48% and Brent Crude fell to one

month low at $65/bbl which is favourable for the

market. India VIX declined over 8% at 17.77.

Earnings season continues to lead stock specific

action going ahead. However, US bond yield

spiked to a 4 year high at 2.88% on expectation of

hike in interest rate by US Fed which is a major

concern in the global markets. Global markets have

witnessed massive selling. Expect market to open

gap down and remain volatile today.

Highest Call OI

Instrument

Nifty 22 - Feb

Bank Nifty 22 - Feb

Bank Nifty 15- Feb

Strike

11100

28000

27000

OI

5798475

502880

248440

Chg in OI

237375

-240

180080

Security in Ban period:

Highest Put OI

Instrument

Strike

10500

26500

25000

OI

5885550

644160

197560

Chg in OI

953400

-43120

165400

Nifty 22 - Feb

Bank Nifty 22 - Feb

Bank Nifty 15- Feb

FORTIS, GMRINFRA, HDIL, JISLJALEQS

Today Event

Trading Idea - Derivatives

STRATEGY : NIFTY : Bear Put Spread

Instrument

B/S

Lot

10500

PE

Buy

1

10300 PE

Sell

1

UK:

Industrial Production , Manufacturing

Production, Trade Balance

Reco

109

58

CMP

109

58

MOSt Market Outlook

9th February 2018

Trading Calls

HDFC Bank

Sell

CMP : 1,880; Target : 1,825; SL : 1,907

Derivatives Idea

NIFTY

Bear Put Spread

BUY 1 LOT OF 10500 PE

SELL 1 LOT OF 10300 PE

The stock has been making lower highs from last five trading

sessions and corrected sharply in last two weeks. It is finding

hurdle near to its 50 DEMA and failed to surpass immediate

resistance of 1912 zones.

Thus recommending to sell the stock with the stop loss of 1907

for the downside target towards 1825 levels.

NET PREMIUM PAID : 51 POINTS

MAX RISK : 51 POINTS

MAX REWARD : 149 POINTS

It failed to surpass immediate hurdle of 10630 zones

Negative weekly candle with selling in Global indices

Fresh Call writing at higher strike is restricting its bounce back

move

Thus, a bearish, Bear Put Spread is recommended to play the

downside move of the market

FII & DII Activity (INR in Cr)

FII F&O

7th Feb

-1022.5

461.19

6th Feb

-2326.1

1699.74

Institution

INDEX FUTURES

INDEX OPTIONS

STOCK FUTURES

Net B/S

244.35

2021.67

1302.41

OI

Long Built Up

Options Unwinding

Synthetic Long

Cat.

FII

DII

8th Feb

-2297.09

2373.59

MOSt Market Outlook

9th February 2018

Long Built-up

Short Built-up

Long Unwinding

Short Covering

Nifty Option OI

1- Day change in Nifty OI

MOSt Market Outlook

9th February 2018

Morning Meet Notes

Research Notes

PETRONET LNG : BUY, CMP : INR 249, TP : INR 318 (+28% upside)

•

EBITDA grew 40% YoY to INR8.5b mainly led by higher utilization at Dahej terminals and lower opex cost

•

PAT grew 33% YoY to INR5.3b, below our estimate, due to lower other income of INR414m.

•

Management guided for further capacity expansion of Dahej terminal, Construction work of the Kochi-Mangalore pipeline is in full swing

•

With increased capacity at Dahej and Kochi ramp-up, we assume FY19/20 total volumes at 17.2/18.8mmt.

•

We value PLNG on DCF (WACC: 11%, TGR: 3%) to arrive at a fair value of INR318. Reiterate Buy.

BHARAT FORGE : BUY, CMP : INR 761, TP : INR 880 (+16% upside)

•

Revenue rose 47% YoY to INR13.9b, led by tonnage growth of 38% YoY and realizations growth of 6.7% YoY

•

EBITDA margin improved 230bp YoY to 29.9%, led by a better mix and operating leverage. PAT grew 77.4% YoY to INR2.3b

•

Strong order book, coupled with a structural improvement in business quality to drive strong ~39% EPS CAGR in FY17-20E

•

We value the company at 25x Mar’20E consol. EPS and arrive at a TP of ~INR880. Maintain Buy.

DALMIA BHARAT : BUY, CMP : INR 2795, TP : INR 3328 (+19% upside)

•

Cement volumes grew 17% YoY, Pure cement realization increased 5% YoY, Revenue, thus, increased 21% YoY to INR20.9b

•

EBITDA rose 10% YoY to INR4.5b with margin at 21.7%; PAT increased 145% YoY to INR979m

•

Company announced the acquisition of Kalyanpur Cement, Bihar (cement capacity of 1.1mt) and Murli Industries, Maharashtra (capacity of 3mt), subject to

NCLT approval

•

We value Dalmia Cement at 13x FY20 EV/EBITDA and arrive at a TP of INR3,328. Buy.

MOSt Market Outlook

9th February 2018

Currency Ideas

USDINR

GBPINR

Sideways-to-positive move was seen in USDINR (Feb) in the previous session

closing at 64.39.

Immediate support remains at 64.25 whereas short-term support remains at

64.05.

Bias still remains positive and dip buying is advised targeting 64.65 - 64.75

levels in short-term.

Short-term bias remains weak for GBPINR and selling on rise is still advised.

Resistance for intraday could be capped at 90.50 whereas supports are at

89.25 - 89.00.

MOSt Market Outlook

9th February 2018

MOSt Market Outlook

Siddhartha Khemka

Head - Retail Research

Chandan Taparia

Derivatives & Technical Analyst

Gaurang Somaiya

Currency Analyst

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