RETAIL TECHNICAL RESEARCH 10300 -...

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24th Nov 2017 RETAIL TECHNICAL RESEARCH IndiaNivesh Securities Ltd 24th Nov 2017 1 of 10 IndiaNivesh Weekly Pulse 10300 – 10400 to decide the next course of markets! Chart 1 : Nifty - Daily Source: IndiaNivesh Research Market Outlook Although the week remained lacklustre for the domestic markets but the trend was largely in the favour of Bulls. The benchmark indices traded in a narrow range throughout the week but they kept on inching higher. The index Nifty spot gained more than a percent and closed well above the intermediate resistance of 10340. Meanwhile, the index Nifty Bank ended flat. We observed buying interest in individual stocks and as a result the NIFTY SMALLCAP (+2.53%) and NIFTY MIDCAP (+2.53%) outperformed the sectoral indices. Given above is the daily chart of Nifty spot which indicates that the index is stuck between the 10340 – 10405 levels which are the Fibonacci ratios derived from the previous move. Further as per the options data, the OI concentration is at 10300 PE & 10400 CE followed by 10500 CE. Keeping in mind the upcoming derivative expiry and shared rationale we are of the opinion that only a convincing move above or below the range of 10300 – 10400 might dictate the further course of the markets. We expect increase in volatility in the coming weeks and thus advise traders to remain stock specific and trade with proper exit strategy. Close 10390 R1 / R2 10405 / 10500 S1 / S2 10300 / 10200 50 EMA 10170 100 EMA 9992 200 EMA 9649 Ninad Tamhanekar, CMT Technical Analyst - Equity Tel: +91 22 62406417 [email protected] Mehul Kothari Sr. Technical Analyst - Equity Tel: +91 22 62406416 [email protected]

Transcript of RETAIL TECHNICAL RESEARCH 10300 -...

Page 1: RETAIL TECHNICAL RESEARCH 10300 - IndiaNiveshold.indianivesh.in/Downloads/636481545558751437_IndiaNivesh_Wee… · A close above upper Bollinger band indicates that the stock is gearing

24th Nov 2017

RETAIL TECHNICAL RESEARCH

IndiaNivesh Securities Ltd

24th Nov 2017

1 of 10

IndiaNivesh Weekly Pulse 10300 – 10400 to decide the next course of markets!

Chart 1 : Nifty - Daily

Source: IndiaNivesh Research

Market Outlook

Although the week remained lacklustre for the domestic markets but the trend was largely in the favour of Bulls. The benchmark indices traded

in a narrow range throughout the week but they kept on inching higher. The index Nifty spot gained more than a percent and closed well above

the intermediate resistance of 10340. Meanwhile, the index Nifty Bank ended flat. We observed buying interest in individual stocks and as a

result the NIFTY SMALLCAP (+2.53%) and NIFTY MIDCAP (+2.53%) outperformed the sectoral indices.

Given above is the daily chart of Nifty spot which indicates that the index is stuck between the 10340 – 10405 levels which are the Fibonacci

ratios derived from the previous move. Further as per the options data, the OI concentration is at 10300 PE & 10400 CE followed by 10500 CE.

Keeping in mind the upcoming derivative expiry and shared rationale we are of the opinion that only a convincing move above or below the

range of 10300 – 10400 might dictate the further course of the markets. We expect increase in volatility in the coming weeks and thus advise

traders to remain stock specific and trade with proper exit strategy.

Close 10390

R1 / R2 10405 / 10500

S1 / S2 10300 / 10200

50 EMA 10170

100 EMA 9992

200 EMA 9649

Ninad Tamhanekar, CMT

Technical Analyst - Equity

Tel: +91 22 62406417

[email protected]

Mehul Kothari Sr. Technical Analyst - Equity Tel: +91 22 62406416 [email protected]

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IndiaNivesh Weekly Pulse

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24th Nov 2017 2 of 10

Chart 2 : GPPL – Weekly (Prev. Close : 153) Chart 3 : PIDILITE – Daily (Prev. Close : 842)

GPPL is at a threshold of a key falling trend line. A convincing move above 156 can recuperate

momentum in the stock. (Bullish)

PIDILITE might take breather as it is facing stiff resistance from regression trend line. (Neutral)

Chart 4 : DHFL - Daily (Prev. Close : 618) Chart 5: SIEMENS – Daily (Prev. Close : 1192)

A ‘Doji’ candlestick pattern at crucial support trend line signposts probable suspension of the correction. (Neutral)

A close below falling trend line would be a serious menace to the secular bull trend. (Neutral).

Source: IndiaNivesh Research

Trend lines are a visual representation of support and resistance in any timeframe and a simple tool available for trend analysis. The greater the number of touch points increases the importance, break on the either side may lead to major moves or trend reversals. The above charts will help you go through recent trend line breakouts / breakdowns.

Trend lines in Actions

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IndiaNivesh Weekly Pulse

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24th Nov 2017 3 of 10

Chart 6 : QUESS – Weekly (Prev. Close : 924) Chart 7 : MCLEODRUSS – Weekly (Prev. Close : 198)

Recorded highest ever volumes since August 2016 along with price breakout, suggesting continuation of bull trend. (Bullish)

For the first time since March 2011, stock recorded such a volume accompanied with huge candlestick, signposts possible trend change. (Bullish)

Chart 8 : TV-18 – Weekly (Prev. Close : 50.5) Chart 9 : VTL – Weekly (Prev. Close : 1284)

Robust volumes recorded for the first time since March 2007 along with price breakout, indicating that the stock is gearing for fresh up move. (Bullish)

More than 10x Volumes of 10 weeks average, with fall in price, raises concern for the stock. (Neutral)

Source: IndiaNivesh Research

The given stocks witnessed climatic volumes during the week went by.

Volume Shockers

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IndiaNivesh Weekly Pulse

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24th Nov 2017 4 of 10

Chart 10 : PCJEWEL - Daily (Prev. Close : 383) Chart 11 : SRF - Weekly (Prev. Close : 1848)

Upsurge in volatility after consolidation suggest change in trend. (Bullish) One year consolidation might be getting over, as prices closed above upper Bollinger band. (Bullish)

Chart 12 : MANNAPURAM - Daily (Prev. Close : 106) Chart 13 : FUTCONSUMER - Daily (Prev. Close : 63)

A close above upper Bollinger band indicates that the stock is gearing for fresh up move. (Bullish) One year consolidation breakout confirmed as price closed above upper Bollinger band. (Bullish)

Source: IndiaNivesh Research

Bollinger Band contraction represents period of low volatility and may be considered by traders for a potential sign of future increased volatility and possible trading opportunities. Thus, in the

above examples we have shared few stocks which underwent a breakout / breakdown from the Bollinger band that indicating further acceleration in the on-going trend.

Trend lines in Actions

Bollinger Band breakouts / breakdowns

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IndiaNivesh Weekly Pulse

IndiaNivesh Securities Ltd

24th Nov 2017 5 of 10

Source: IndiaNivesh Research

The Averages

An exponential moving average (EMA) is a variant of moving average which is similar to a simple moving average, apart from the weightage as more weight is given to the recent closing prices.

We have added 50, 100 and 200 DEMA to our analysis which represents short-term, medium term and long term trend respectively. As short term traders can use 50 DEMA swing trading decisions, while 100 DEMA can be used by medium term. The long-term investors will focus on 200 DEMA and could consider the same for accumulation & distribution of their investments.

The Daily Exponential Moving Average (DEMA) is suited for trending market however it could possibly witness multiple cross over in sideways trend. When the market is trending and in oscillation mode as well has sustained trending nature, the DEMA will also show a similar oscillation & vice-versa.

However to limit the multiple whipsaws to a certain extent, the stocks mentioned in the table have closed 1% above or below the respective moving averages.

Going ahead, these averages can act as initial filter to on-going trend, or could possibly consider as support & resistance.

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IndiaNivesh Weekly Pulse

IndiaNivesh Securities Ltd

24th Nov 2017 6 of 10

Stocks above 70 & below 30 Relative Strength Index

Source: IndiaNivesh Research

RSI- The above shown chart represents the comparison of price action of benchmark index Nifty vis a vis the overbought/ oversold zone of Nifty 50 stocks considering the value of daily RSI.

The Overbought zone occurs when the RSI value crosses 70 levels while the oversold zone occurs when it plunges below 30 levels.

As per last three years data, we can analyse that, whenever the number of overbought stocks in Nifty 50 goes above 12 the market tend to make an intermediate top, while oversold position

occurs when number of oversold stocks of Nifty 50 goes above 13 the market tend to form intermediate bottom.

As per the above logic, above shown chart suggests that there is no sign of change in the trend.

Nifty 50 – Overbought / Oversold

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IndiaNivesh Weekly Pulse

IndiaNivesh Securities Ltd

24th Nov 2017 7 of 10

Chart 14: DLF – Monthly Chart

Source: IndiaNivesh Research

Stock Outlook

The above mentioned chart shows the consolidation resembling rounding bottom formation.

The stock recorded breakout from falling trend line along with close above upper end of Bollinger band.

The ongoing bullish price action is supported with positive placement of momentum oscillators.

Thus, we recommend buying the stock in the range 228 - 222 with a stop loss of 194 for target of 270 / 300.

BUY Prev. Close – 228

Target 300

Stop Loss 194

52 Weeks High

229.8

52 Weeks Low

101

50 EMA 198.50

100 EMA 191

200 EMA 180

Stock of the Week

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IndiaNivesh Weekly Pulse

IndiaNivesh Securities Ltd

24th Nov 2017 8 of 10

Weekly - Open Interest Shockers

Source: IndiaNivesh Research

Nifty Option Snapshot

Source: IndiaNivesh Research

The highest open interest is seen at 10300 strikes PE of 6.2 mn shares, while on the CALL side, the highest open interest is seen at 10500 strikes CE to the tune of 5.95mn shares. On a w-o-w basis,

significant short addition has emerged at 10200 - 10400 strikes PE to the tune of 40 lakh shares along with short covering in 10200 - 10300 strikes CE to the tune of 26 Lakh shares respectively.

The above mentioned data indicates that the Nifty is likely confine in a range of 10300 - 10500. And a move above 15.55 in VIX would bring fresh momentum in the market.

Weekly Derivatives Analysis

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IndiaNivesh Weekly Pulse

IndiaNivesh Securities Ltd

24th Nov 2017 9 of 10

Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. This document is published in accordance with Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The information contained in this document has been obtained from sources that are considered as reliable though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. INSL has not independently verified all the information contained within this document. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances and statements given or made available herein or for any omission or for any liability arising from the use of this document. Information mentioned is the current information as of the date appearing on this document only. INSL directors/ employees and its clients may have holdings in the stocks mentioned in the document. This report is based on technical and derivative analysis on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter.

Weekly Pulse MIS

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IndiaNivesh Weekly Pulse

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24th Nov 2017 10 of 10

Disclosure of Interest Statement

1 Details of business activity of IndiaNivesh Securities Limited (INSL) INSL is a Stock Broker registered with BSE, NSE and MCX - SX in all the major segments viz. Cash, F & O and CDS segments. INSL is also a Depository Participant and registered with both Depository viz. CDSL and NSDL. Further, INSL is a Registered Portfolio Manager and is registered with SEBI.

2 Details of Disciplinary History of INSL No disciplinary action is / was running / initiated against INSL

3 Details of Associates of INSL Please refer to the important 'Stock Holding Disclosure' report on the IndiaNivesh website (investment Research Section -http://www.indianivesh.in/Research/Holding_Disclosure.aspx?id=10 link). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. INSL and its affiliates may have investment positions in the stocks recommended in this report.

4 Research analyst or INSL or its relatives'/associates' financial interest in the subject company and nature of such financial interest

No (except to the extent of shares held by Research analyst or INSL or its relatives'/associates')

5 Research analyst or INSL or its relatives'/associates' actual/beneficial ownership of 1% or more in securities of the subject company, at the end of the month immediately preceding the date of publication of the document.

Please refer to the important 'Stock Holding Disclosure' report on the IndiaNivesh website (investment Research Section - http://www.indianivesh.in/Research/Holding_Disclosure.aspx?id=10 link). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. INSL and its affiliates may have investment positions in the stocks recommended in this report.

6 Research analyst or INSL or its relatives'/associates' any other material conflict of interest at the time of publication of the document

No

7 Has research analyst or INSL or its associates received any compensation from the subject company in the past 12 months

No

8 Has research analyst or INSL or its associates managed or co-managed public offering of securities for the subject company in the past 12 months

No

9 Has research analyst or INSL or its associates received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months

No

10 Has research analyst or INSL or its associates received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months

No

11 Has research analyst or INSL or its associates received any compensation or other benefits from the subject company or third party in connection with the document.

No

12 Has research analyst served as an officer, director or employee of the subject company No

13 Has research analyst or INSL engaged in market making activity for the subject company No

14 Other disclosures No

INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time.

IndiaNivesh Securities Limited

Research Analyst SEBI Registration No. INH000000511

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