Research Analyst:Dharmesh Shah Nitin Kunte, CMT Dipesh Daghadharmesh.shah@icicisecurities.com nitin.kunte@icicisecurities.com dipesh.dagha@icicisecurities.comPabitro Mukherjee Vinayak Parmarpabitro.mukherjee@icicisecurities.com vinayak.parmar@icicisecurities.com

Technical Outlook 2015

2

Deal Team – At Your ServiceRiding the bull with zeal to zenith…

• Indian equities gave a thunderous applause to the strong verdict in the general elections in May 2014. The markets have rediscovered their animal spirits that is very well reflected in the performance of domestic equities, which are up 31% YTD and 15% post election results, thereby allowing India to top the global equity charts

• As we enter the second year of changed regime, we believe the markets will continue to give a thumbs-up to the pro-reforms government and continue to rise in a similar fashion as displayed over the past six months

• The strong resolution past the seven year bullish Ascending Triangle pattern has major bullish implications and supports upsides towards 35000/10500 (Sensex/Nifty) levels for the current northward move over the coming year

• We do not foresee any major shift in the current directional positive bias. However, any sizable correction towards 25000/7400 (Sensex/Nifty) should be used as an attractive incremental opportunity to buy for the long term

Source: Bloomberg, ICICIdirect.com Research All price charts as on December 18, 2014

• Theme: Cyclicals to be the flavour of 2015

• Our bottom up approach based on technical parameters applied across the entire universe of NSE cash segment suggests cyclicals will be at the forefront of the rally in 2015. The midcap space has a lot of headroom to do the catch-up exercise and will outperform the benchmarks, going forward

• Top sectors: Auto, auto ancillary, capital goods, PSUs and cement

• Our preferred picks: Bhel (BHEL), BEL (BHAELE), Alstom India (ABBALS), Exide (EXIIND), Federal Mogul Goetze (GOEIND), Asahi India Glass(ASAIND), Ramco Cement (MADCEM), GIC Housing (GICHOU) and Nilkamal (NILPLA)

BSE Sensex Monthly Bar Chart

2008

21206

2010

21108

2013

21483

The breakout past the seven year consolidation pattern has signalled a structural shift in the market from sideways to bullish. The convincing breakout past the seven year bullish Ascending Triangle pattern has major implication of upside towards 35000 in the forthcoming years for the Sensex

Seven year consolidation post 2008 peak took the pictorial shape of a bullish Ascending Triangle pattern

3

Deal Team – At Your ServiceMulti-fold rally followed by multi-year consolidation, perfect recipe for bull market

• Historically, the multi-year bull runs are followed by multi-year consolidation as markets enter a reconciliation phase. As the consolidation matures with the passage of time and price correction, the market will pierce new highs above the previous bull cycle peak to signal continuance of the secular uptrend

• In the context of our markets, there is also one historical precedence of a multi-fold rally followed by a multi-year consolidation, which adds credence to the current secular bull market setup. Between 1989 and 1992, the Sensex witnessed an 11-fold rally from 390 to 4546. This was followed by a 11 year consolidation phase as the index gyrated in a range from 1992 to 2003. The breakout from this elongated consolidation paved way for the multi-fold rally from 2003 to 2007

• The Sensex witnessed a seven fold rally between 2003 and 2007 (2900 to 21206) and, thereafter, entered a consolidation phase lasting seven years from 2008 to early 2014. The resolution past the 2008 bull cycle peak, therefore, has the underpinnings of a burgeoning bull market, which can lead to unfolding of multi-fold gains over the coming years

• The characteristics of market internals during the past seven year consolidation and post the breakout past the previous bull-cycle peak defines the changing dynamics of the market. Between 2008 and 2014, the index re-tested the 2008 high on two occasions in 2010 and 2013. However, both these attempts lacked broader market participation. The firm resolution past the 2008 peak in 2014 has the backing of strong participation of broader markets that represents the larger section of market participants, which augurs well for the longevity of the uptrend

Source: Bloomberg, ICICIdirect.com Research

1992

1989

2003

2008

11 Fold rally between 1989-1992

7 year consolidation 2008 to 2014

7 Fold rally between 2003 to 2008

11 year consolidation 1992 to 2003

BSE Sensex Quarterly Bar Chart

4

The breakout from the Ascending Triangle pattern comprising entire seven year consolidation since 2008 till early 2014 has major bullish implications as it signals the end of elongated correction phase and start of a new uptrend. The minimum measuring implication of the price pattern i.e. the width of the triangle’s base (21206 – 7697=13509) added to the breakout point of 21206 projects an upside potential up to 35000 /10500 (Sensex/Nifty) for the current rally over 2015

The entire up move since 2012 has occurred in a rising channel originating from 2009 lows as highlighted in the adjoining yearly chart. Over the past three years, the index has respected the upper and lower bands of this long term channel. The past two year’s lows are resting upon the lower band of this channel while 2014 high is also placed at the upper band of this channel. The upper band of this channel for 2015 is placed at 35000 levels, making this a likely target

Deal Team – At Your ServiceHeadroom for current bull run to extend to 35000/10500

Source: Bloomberg, ICICIdirect.com Research

BSE Sensex Monthly Bar Chart BSE Sensex Yearly Candlestick Chart

Upper band of Rising Channel for 2015 @ 35000

2008 high 21206

2010 high 21108

2013 high 21483

Seven year consolidation since 2008 to 2014 occurred in Ascending Triangle pattern

Minimum measuring implication of the pattern i.e. width of the base of Triangle (13061 points) added to the breakout point of 21206 projects upside potential towards 34500 levels for the current rally

5

Long term investors should note that secular bull markets also go through phases of secondary corrections, which is a healthy phenomenon to work off the excesses developed during rallies. Even during the secular bull run from 2003 to 2008 the index was subject to intermediate corrections ranging from 13% to 30%. However, these counter trend corrections did not alter the overall bullish fabric of the market. We have identified a crucial support zone where demand will outstrip supply to help investors ride the uptrend and also provide a fresh entry opportunity for those who have missed the earlier rally.

The long term trendline connecting yearly lows of 2003 and 2009 acted as a cushion during 2013 and 2014 as the respective yearly lows rest upon the same. The value of this trendline for 2015 is at 22300 /7000, which will remain a major base for the index. We believe any corrective decline towards 25000 / 7400 should be used as a long term buying opportunity. Placement of 52 week EMA, the base formed post election results and 38.2% retracement of 2013-14 rally all coinciding around at 25000/7400, reiterates our view point that any declines towards these levels should be bought into.

Deal Team – At Your ServiceConversely, 25000/7400 is strong base; act bravely if it materialises

Source: Bloomberg, ICICIdirect.com Research

BSE Sensex Yearly Candlestick Chart BSE Sensex Weekly Bar Chart

Long term trendline 2015 value @ 22300

52 week EMA ~25000Post Election result base formation ~2500038.2% retracement of 2013-14 rally ~25000

Long term Support @ 25000

6

The broader markets are at the cusp, led by a major turnaround in the BSE midcap index, as it has steered past its 2008 high (10245) while the small cap index has also strengthened above its 2010 high (11366). A look back at the behaviour of the benchmark Sensex after its breakout above 2008 highs provides a strong roadmap for the broader markets, going forward. The Sensex entered a strong bull trend after conquering its 2008 high (21206) in April 2014 and has already rallied 35% above its 2008 peak. We believe the BSE midcap index is all set to follow suit with the benchmarks and enter a strong uptrend as we head into 2015. A similar magnitude of rally replicated on the BSE midcap index (minimum implication) would project upsides towards 14000 over the medium term

Deal Team – At Your ServiceBroader markets: Brace up for relatively strong performance…

Source: Bloomberg, ICICIdirect.com Research (Charts rebased to 100)

BSE Sensex and BSE Mid-cap index comparative Chart

Midcap index

2008 2010 2013

The Sensex got catapulted into a higher orbit after confirming a resolute breakout past its 2008-10 highs during early 2014 and has already rallied 35% above its2008 peak. The Midcap Index is following in the footsteps of the benchmark and has just risen above its 2008 peak signaling a major trend reversal. A similar magnitude of up move in the midcap index is on the cards moving into 2015

BSE Sensex

7

Deal Team – At Your ServiceTop Picks: Going up the “Bottom up way”…

• Moving away from the conventional method of stock selection, we have adopted a more statistical and rationale bottom up approach in our stock selection process

• We have developed a statistical model comprising four major parameters, which are the embedded characteristics of an outperformer. The four major parameters included in the statistical model focus on assessment of price structure, trend gauging parameters, momentum and investorparticipation (trading volume), which form the four key tenets defining a structural uptrend

• In the first step, we ran the model on the entire gamut of NSE cash stocks (1450 stocks) filtering the stocks with criteria ranging from fulfilling at least one and up to all four parameters.

• The number of stocks from the NSE cash universe fulfilling at least one parameter filtered down the list to 410 stocks. Moving up the ladder, we shifted focus to the set of stocks, which fulfilled at least 75% of the criteria i.e. meeting three or all four parameters that further narrowed down the list to 44 stocks. These short-listed 44 stocks represent an established uptrend and carry the characteristics of strong outperformance on the long term time frame (List appended in following pages)

• We restricted ourselves to analysing the bucket of 44 stocks which already fulfilled major technical parameters. The sectoral segregation of these stocks also threw up interesting insights. Sectors with higher representation in the bucket list reflected the inherent strength in that space and presented an alternate perspective of identifying the outperforming sectors

Source: Bloomberg, ICICIdirect.com Research

Top Picks9

Technically Strong stocks meeting 3 or all 4 parameters

(44 stocks)Sectoral segregation

Filtering process: Elimination of non-trending stocks.

Outcome: Stocks fulfilling at least one criteria (410 stocks)

Stock Universe – NSE Cash Segment(1450 Stocks)

8

Deal Team – At Your ServiceTop Picks: Taking a bottom up approach…

Source: Bloomberg, Capitaline, ICICIdirect.com Research

Sector / Scrip Name Return Matrix (%) Momentum3 month 6 month 12 month Remark

Auto Anicllary1 Apollo Tyres 14.2 12.8 163.6 √ √ √2 Asahi India Glas 13.5 56.2 153.0 √ √ √ √3 Banco Products 2.1 61.9 175.9 √ √ √4 Bosch 27.8 60.3 114.8 √ √ √5 Eicher Motors 22.4 93.8 189.3 √ √ √6 Exide Inds. -2.4 17.7 46.6 √ √ √7 Federal-Mogul Go 28.3 57.8 89.4 √ √ √8 Motherson Sumi -0.5 31.1 114.5 √ √ √9 Munjal Showa 0.0 47.7 188.7 √ √ √

10 Shivam Autotech 6.2 81.2 140.0 √ √ √

Capital goods11 AIA Engg. 8.1 32.7 121.7 √ √ √12 Alstom India 11.4 12.6 54.2 √ √ √13 B H E L 14.5 2.6 59.6 √ √ √14 Cummins India 23.6 31.8 102.5 √ √ √15 Esab India -0.2 -6.3 45.4 √ √ √16 Larsen & Toubro -2.2 -10.1 40.2 √ √ √17 SKF India 11.5 25.1 88.1 √ √ √18 Thermax 14.5 3.1 40.6 √ √ √

Cement19 Heidelberg Cem. -0.5 17.4 104.7 √ √ √20 The Ramco Cement -5.6 5.2 77.3 √ √ √21 UltraTech Cem. -2.3 -9.1 40.6 √ √ √

BFSI22 Bank of Baroda 9.3 18.7 53.5 √ √ √23 HDFC Bank 8.9 10.3 35.6 √ √ √24 Indian Bank 18.9 9.1 78.8 √ √ √25 Punjab Natl.Bank 11.3 13.2 89.5 √ √ √26 Union Bank (I) 0.2 -7.2 78.9 √ √ √27 GIC Housing Fin 9.4 17.1 86.6 √ √ √ √

Investor participation

Statistical data mining hands out numero uno position toauto ancilliary pack as it presents the most broad basedperformance. While some of the stocks from the spacehave enjoyed multi-fold returns already, few others are onthe cusp of breaking into a higher trajectory and stand tallon the grounds of an improving price structure,sustainabile trend and growing investor appetite

The bullish trend across the cement space is expected tospill over further in 2015. Ramco Cement is our preferredpick based on low beta

While stocks like L&T, AIA Engineering and SKF sailthrough a structural bull phase, technically, we believestocks like Bhel and Alstom India are in the early stagesof the bull trend and, therefore, prefer them to ride theongoing rally in the capital goods space

The bucket of BFSI stocks, which fullfils at least three out of four criteria of statistical model throws up interestinginsights. While private banks have remained keyperformers in 2014, PSU banking stocks look equallyexciting. We, however, chosen GIC Housing over othersas it fulfils all four criteria

Price Structure

Trend Analyser

9

Deal Team – At Your ServiceTop Picks: Taking a bottom up approach…

Source: Bloomberg, Capitaline, ICICIdirect.com Research

Consumer discretionery / staple28 Hitachi Home 63.9 254.5 432.8 √ √ √29 IFB Inds. 79.0 327.5 557.8 √ √ √30 Nilkamal Ltd 24.7 46.5 198.0 √ √ √ √31 Pidilite Inds. 20.6 58.1 64.2 √ √ √32 Britannia Inds. 22.4 84.6 98.7 √ √ √33 CCL Products 41.3 148.8 313.6 √ √ √34 Arvind Ltd -17.4 16.7 104.0 √ √ √35 T.V. Today Netw. -6.9 46.3 71.4 √ √ √

IT36 Info Edg.(India) -1.9 15.5 87.6 √ √ √37 Sonata Software 4.2 81.1 287.1 √ √ √

Pharma38 Cipla 0.6 50.7 65.3 √ √ √39 Indoco Remedies 1.2 81.8 153.9 √ √ √

PSU40 Bharat Electron 27.0 44.9 161.9 √ √ √41 Container Corpn. 0.7 9.5 76.0 √ √ √42 H P C L 17.5 35.7 157.8 √ √ √

Others43 Indian Hotels 17.9 11.5 97.5 √ √ √44 Tata Chemicals 6.1 27.6 55.6 √ √ √

The sector enjoys a fair slice of the ongoing bull market,which reflects in an improving price structure of manystocks. While many stocks on the list look technicallypositive, here we stick to the stock which qualifies on allparameters

Apart from PSU banking space, many other stocks haveenjoyed renewed investor participation. We prefer theleader from defence sector and Container Corporation toplay in this space

1010

Deal Team – At Your ServiceBhel: Long term trendline breakout triggers resumption of uptrend…

• The share price of Bhel reversed its prolonged downtrend of nearly four years by resolving past the most dominant falling trend line in place since October 2010 in the first quarter of 2014

• Structurally, the ‘V’ shaped recovery led to the faster retracement of the last major falling segment as the 17 months decline from April 2012 high of | 274 to August 2013 low of | 100 was completely retraced in just nine months. The faster retracement of a major down leg signalled a change of guard from a long term horizon

• The corrective decline unfolding since May 2014 high of | 291 saw the stock retrace its preceding major up move from| 100 to | 291 by 50% at October 2014 low of | 195. The presence of the medium-term rising trendline around | 195 levels attracted fresh demand for the stock and led to a higher bottom formation on larger degree charts highlighting strength in the underlying trend

• The stock is well poised to embark upon its next major up move after confirming a higher bottom at | 195. We expect the stock to head towards | 325 levels over the medium term horizon, thus providing a favourable reward/risk set-up to ride the up move in 2015. The 50% retracement of the entire 2010 to 2013 decline is placed at | 325 levels, which also coincides with the yearly high of 2012

• The long term monthly MACD oscillator is in a rising trajectory and has just ventured into the positive territory above its trigger line, thus supporting the overall positive trend in price

*Call has been initiated in i-Click to Gain on December 17, 2014 at 14:10 hrs

CMP: | 258.00 Buying range: | 232-247 Target: | 320.00 Stop loss: | 195.00

Monthly Bar ChartThe stock has embarked upon a steady uptrend after breakout past the long term downward sloping trendline in March 2014

538

274

100

50% @ 200

The ‘V’ shaped recovery led to the faster retracement of the last major falling segment signalling revival of bullish momentum

2012 high @ 325

MACD has ventured into positive territory trigger line on monthly chart signaling strong momentum

Source: Bloomberg, Capitaline, ICICIdirect.com Research Market Capitalisation | 60652 crore Equity capital | 490 croreFace value 2 52 weeks H/L 291.5 /145.55200/50 days EMA 226 / 250 52 weeks EMA 156.00

1111

Deal Team – At Your ServiceBharat Electronics (BHAELE): Breakout past multi-year highs…

• The regime change in the general elections accompanied by a strong mandate infused a fresh lese of life into PSU defence equipment provider BEL. The stock staged a ‘V’ shaped recovery to vault past its 2007 and 2010 highs of | 2250 in November 2014. The entire rally in 2014 displays characteristics of an impulsive behaviour as the stock completely overhauled its preceding decline of 46 months (April 2010 to February 2014) in a record five months. Such a faster retracement has larger implication on the long term price structure and heralds a strong uptrend for the stock, going forward

• The behaviour of volumes is testament to the changing dynamics of the long term price trend in the stock. The entire rally since the start of 2014 has garnered record high participation as monthly volumes since February 2014 (28.5 lakh shares) have been almost three times the 24 month average volume of 10 lakh shares

• We expect the stock to ride the new found momentum into 2015 as well and remain on course towards target of | 3650. The measuring implication of the multi-year range breakout, i.e. the magnitude of 2010-14 decline (| 2251 to | 893) projected from the breakout point of | 2251 opens upsides towards | 3650 levels on a larger time frame. This also coincides with the 138.2% extension of the February-July rally (| 893 to | 2318) measured from the August 2014 low of | 1701 projecting upside towards the | 3650 region

*Call has been initiated in i-Click to Gain on December 18, 2014 at 09:36 hrs

CMP: | 2786.00 Buying range: | 2700-2770 Target: | 3650.00 Stop loss: | 2235.00

Monthly Bar Chart

Breakout past multiyear highs backed by strong volume participation signals long term shift of trend in favour of the bulls. Measuring implication of the breakout opens upside towards |3650 for the coming year

2251

1701

138.2% extension @ 3650

Sharp surge in volumes since the start of 2014 signals strong investor appetite for the stock

893

Source: Bloomberg, Capitaline, ICICIdirect.com Research Market Capitalisation | 21220 crore Equity capital | 80 croreFace value 10 52 weeks H/L 3140.75/893200/50 days EMA 1883 /2388 52 weeks EMA 1821.00

1212

Deal Team – At Your ServiceAlstom India (ABBALS): Thrusting out of contracting range…

• The share price of Alstom India is at the cusp of a major turnaround as it is emerging out of a long term contracting price range to signal a shift of larger trend in favour of bulls. The entire price action since mid-2006 till date has occurred in a contracting range as marked by two converging trend lines in the adjoining long term price chart

• The stock witnessed a major base formation at the lower band of this contracting range for over two years from January 2012 to April 2014 before finally lifting off to challenge the overhead trendline in November 2014. The two year consolidation at the support trendline drawn off the 2006 and 2008 lows signalled steady accumulation by stronger hands at an important price juncture. The resolution past the overhead falling trend line confirms the shift of larger degree trend in favour of bulls and augurs well for the stock, going forward

• The entire up move since April 2014 has garnered increased participation as monthly volumes have consistently shot up over 2x the 12 month average of 12 lakh shares. Volume expansion in the direction of prices is a healthy sign indicating larger participation in the uptrend

• Going forward, the stock is set to enter a sustainable uptrend and retrace its 2010-13 decline (| 899 to | 275) by at least 80%, thereby providing upsides towards | 770 over a medium-term horizon

• The monthly RSI has emerged above its four year consolidation band and is in a rising trajectory above the bullish reading of 60 signalling continuation of positive momentum over a medium-term horizon

*Call has been initiated in i-Click to Gain on December 18, 2014 at 09:38 hrs

CMP: | 577.00 Buying range: | 550-570 Target: | 770.00 Stop loss: | 455.00

Monthly Bar Chart

276

182

210

Price breakout past the long term overhead trendline originating since 2007 signals major reversal of trend in favour of bulls

RSI in up trend validates positive trend in price

Source: Bloomberg, Capitaline, ICICIdirect.com Research Market Capitalisation | 3812 crore Equity capital | 67 croreFace value 10 52 weeks H/L 644.5/301.5200/50 days EMA 330 /411 52 weeks EMA 317.00

Base formation at long term support trendline for over 2 years indicated accumulation by stronger hands

1313

Deal Team – At Your ServiceExide (EXIIND): Entering a new bull phase…

• The auto ancillary space was the toast of the Street in 2014. Investors who lapped up auto ancillary stocks were rewarded handsomely as many stocks produced multi-fold gains and are still going strong. Exide Industries is one of the late movers from the auto ancillary space as the stock began picking up steam towards the second half of 2014. The share price resolved to fresh life-time highs during September 2014, thereby signalling the end of four years of consolidation and the start of a new bull trend

• Structurally, the entire horizontal price action since November 2010 in the price band of | 175-105 panned out precisely above the 50% retracement of its 2009-10 upsurge (| 34-175) highlighting accumulation at lower levels. While the rally during 2009-10 panned out over 18 months, the 48 month corrective phase from late 2010 to mid 2014 could retrace the preceding rally by only 50% price wise. Elongated time correction and limited price correction form the key feature of a positive price structure from a long term perspective

• Post the recent resolve above its 2010 peak (| 179) we expect the stock to enter a sustainable uptrend in the coming year and head towards | 245 being the measuring implication of the four trading range (| 175-105=70 points) projected above 2010 highs of | 175

• The trading volumes during the price breakout above life-time highs and in follow up over past few weeks have remained above their 24-month average (3.5 crore shares) suggesting growing appetite to own the stock

*Call has been initiated in i-Click to Gain on December 18, 2014 at 10:54 hrs

CMP: | 166.00 Buying range: | 156-166 Target: | 235.00 Stop loss: | 135.00

Monthly Bar Chart

The stock has signaled a breakout past the four year consolidation band backed by strong volumes which opens upsides towards |245 levels over the coming years

34

175

Base of consolidation at 50% @ 100

Strong volume accompanying the breakout rally suggests larger participation in the direction of trend

Source: Bloomberg, Capital Line, ICICIdirect.com Research Market Capitalisation | 14174 crore Equity capital | 85 croreFace value 1 52 weeks H/L 183.4/99200/50 days EMA 149 /165 52 weeks EMA 147.00

1414

Deal Team – At Your ServiceFederal-Mogul Goetze (GOEIND): Long term Rounding breakout…

• The revival of investor sentiment during the last year has seen the midcap index register a breakout past its 2008 peak after a seven year gap. This multi-year breakout has seen many stocks from the midcap and small capuniverse rise from long periods of hibernation. The share price of Federal Mogul Goetze, an auto parts and equipment maker, is at the cusp of moving out of a seven year consolidation pattern and provides a good entry opportunity to ride the long term shift of price momentum

• The entire price action since January 2007 till date represents a seven year long Rounding pattern as highlighted in the adjoining monthly chart. The strong surge in price momentum since May 2014 saw the stock post a faster retracement of its last down leg as it recouped a 26 month decline from February 2012 to April 2014 in just seven months signalling strong bullish momentum. The stock tested the neckline of the major rounding pattern placed around | 350 in November 2014. The cool-off in broader markets over past few weeks has seen the stock consolidate just below the neckline

• We believe the stock is set to breakout past the seven year rounding pattern and embark upon its next major up-leg in the coming years and, therefore, presents a strong case for long term investment. We expect the current rally off 2014 low of | 174 to move towards 138.2% extension of the 2009-12 rally (| 27 to | 335) placed around | 550 levels

• Long term monthly MACD oscillator is seen rebounding after taking support at its trigger line & is seen diverging from its nine period average suggesting continuance of strong upward momentum in the coming year

*Call has been initiated in i-Click to Gain on December 17, 2014 at 14:35 hrs

CMP: | 377.00 Buying range: | 358-377 Target: | 520.00 Stop loss: | 295.00

Monthly Bar Chart

The stock is at the cusp of a major breakout from the 7 year Rounding consolidation pattern and is likely head towards |550 levels in the coming year

2006 |452

27

Long term monthly MACD generated a buy signal above its trigger line validating the positive price trend

Source: Bloomberg, Capitaline, ICICIdirect.com Research

Neckline @ 450

Market Capitalisation | 2114 crore Equity capital | 56 croreFace value 10 52 weeks H/L 449.4/174200/50 days EMA 282 /361 52 weeks EMA 274.00

335

174

138.2% @ 550

1515

Deal Team – At Your ServiceAsahi India (ASAIND): Structural Bull in place….

• The strong upsurge in 2014 has signalled a long term reversal of fortunes for the price structure of Asahi India Glass. The combination of faster retracement of last major down leg (2010-13), yearly volumes scaling past seven-year average (2 crore shares) and resultant breakout from seven year long bullish consolidation pattern signals end of an elongated seven year corrective phase and beginning of structural bull market

• After the multi-fold rally between 2002 and 2007 (| 9 to | 142), the stock entered a corrective phase and oscillated between the broad range of | 120 and | 30 levels over the last seven years from 2008 till recently. The stock retraced its 2002-07 rally by 80% at | 35 levels and formed a Bullish double bottom precisely at the crucial retracement support. The yearly lows of 2008 and 2013 are placed precisely near the 80% retracement of the major bull run

• The current rally during 2014 has seen the stock completely overhaul its preceding decline, which consumed 11 quarters between 2010 and 2013 in just four quarters, which highlighting resumption of strong positive momentum. In the process, the stock registered a breakout past the neckline of the Bullish double bottom formation to signal the end of seven years of a corrective trend and start of a fresh long term uptrend. We expect the share price to continue its long term up trend in coming years and head towards | 170 being measuring implication of the consolidation range (| 100-30=70 points) as projected above 2011 peak of | 100

• The strong momentum is also visible from quarterly RSI, which has emerged above the reading of 60 for the first time since 2008 underlining strong momentum from a medium-term perspective

*Call has been initiated in i-Click to Gain on December 17, 2014 at 14:18 hrs

CMP: | 115.00 Buying range: | 106-115 Target: | 168.00 Stop loss: | 80.00

Quarterly Bar Chart

100

Long term RSI also registers a breakout from bullish Double Bottom pattern

Breakout from 7 year consolidation

80% @ 35

Yearly volumes greater than 7 year average highlight strong participation in the direction of primary trend

Source: Bloomberg, , Capitaline, ICICIdirect.com Research Market Capitalisation | 2799 crore Equity capital | 24 croreFace value 1 52 weeks H/L 135.7/40.15200/50 days EMA 92 / 117 52 weeks EMA 88.00

Stock formed a bullish Double bottom at 80% retracement of 2002-2007 rally and registered a strong breakout in November 2014 to signal resumption of long term uptrend

1616

Deal Team – At Your ServiceRamco Cement (MADCEM): Long term Cup & Handle breakout…

• The midcap cement space has garnered a lot of investor interest throughout 2014. While stocks like JK Cement and JK Lakshmi, to name a few, have already mopped up strong gains in 2014, we foresee a similar opportunity emerging in Ramco Cement for the upcoming year

• A look at the long term price chart reveals that the entire price movement since 2007 till mid-2014 took the pictorial shape of a well defined Cup & Handle pattern as highlighted in the adjoining chart. A Cup & Handle is a bullish reversal pattern having positive implication on the price front upon resolution above the neckline of the pattern

• The stock scaled past the neckline formed by joining the yearly highs of 2007 (| 253) and 2013 (| 273) in June 2014 to signal a long term trend reversal and start of a fresh bull trend. The breakout rally saw the stock rally to a new life high of | 380 in November 2014. The recent look back in prices to re-test the major breakout area provides a good investment opportunity to ride the expected uptrend in the coming year

• The minimum measuring implication of the price pattern i.e. the distance between the neckline and the base of handle (| 280 – 135 = 145 points) added to the neckline projects upside towards | 425 levels for the current up move

• Behaviour of volumes over a longer horizon charts also corroborates the underlying strength in the trend. The price declines have been accompanied by receding volumes while rallies have been backed by stronger volumes highlighting larger participation in the direction of primary trend

* Call has been initiated in i-Click to Gain on December 17, 2014 at 12:52 hrs

CMP: | 301.00 Buying range: | 285-303 Target: | 420.00 Stop loss: 238.00

Monthly Bar Chart

253

135

Price breakout past seven year long Cup & Handle pattern has signaled a long term trend reversal for the stock. Minimum measuring implication of the price pattern will see the stock remain on course towards target of | 425 levels in the coming year

Volume expansion in the direction of price indicates strength in the underlying trend

Source: Bloomberg, , Capitaline, ICICIdirect.com Research

Neckline @ 280

Market Capitalisation | 7259 crore Equity capital | 24 croreFace value 1 52 weeks H/L 380 /156.20200/50 days EMA 286 / 326 52 weeks EMA 277.00

1717

Deal Team – At Your ServiceGIC Housing (GICHOU): Resolve past three year consolidation….

• The stock has emerged out of a three year consolidation in 2014 to mark an end of the secondary correction and resumption of the long term up trend. The resolve past three years consolidation has set the tone for continuation of price momentum into the coming year, thus offering a decent investment opportunity

• The long term price chart of GIC Housing represents a well established uptrend as the stock moves northwards in a rising peaks and troughs manner while respecting its long term trendline originating way back since 2001. The corrective decline during 2011 got arrested at the 61.8% retracement of the 2009-10 rally (| 23-136) placed around | 60, which was in close proximity to the long term trend line

• While the 2009-10 rally was swift and took only seven quarters to pan out, the subsequent correction consumed double time (14 quarters) before resolving past the 2010 peak. Such price/time behaviour is the hallmark of a structural uptrend and augurs well for the stock, going forward

• The current bullish momentum is expected to pan out over next several quarters offering a decent opportunity to ride the expected uptrend. We expect the stock to travel towards | 255 being the 161.8% extension of the 2012-13 up leg (60-147) as projected from 2013 lows of | 77

• The strong momentum as exhibited by price is also corroborated by the long term monthly MACD indicator, which has moved into the positive territory above its trigger line signalling continuance of the uptrend

* Call has been initiated in Click to Gain on 15th December 2014 at 14:11 hrs

CMP: | 180.00 Buying range: | 173-181 Target: | 250.00 Stop loss: | 144.00

Quarterly Bar Chart

136

77

Quarterly MACD is seen diverging from its 9 period average suggesting strong momentum

Breakout from three year long consolidation opens upside towards | 250 levels in the coming year

61.8% @ 60

23

147

Volumes at the time of breakout from three year consolidation has been above its 10 quarter average indicating larger participation in trend

Source: Bloomberg, , Capitaline, ICICIdirect.com Research Market Capitalisation | 970 crore Equity capital | 54 croreFace value 10 52 weeks H/L 199.4 /92.85200/50 days EMA 154 / 177 52 weeks EMA 149.00

1818

Deal Team – At Your ServiceNilkamal (NILPLA): Dawn of a new uptrend….

• The share price of Nilkamal resolved above its 2007 and 2010 peaks (~| 405) during December 2014 to signal a major turnaround on larger degree price charts. The overcoming of a multi-year supply barrier above | 405 by the share price signals a structural shift in favour of bulls and has larger positive implications for the stock, going forward

• The first major indication of bulls regaining control of the larger trend is reflected in the velocity of the current up move from late 2013 till date. The stock completely overhauled its preceding 12 quarter decline (2010-13) in just five quarters suggesting a faster pace of retracement and reaffirmed a bullish price structure

• The swing lows of 2013 got anchored at the key long term trend line running through 2001 and 2009 lows maintaining rising peak and trough formation on longer time interval charts. The breakout into new life-time highs during the current month provides the Dow Theory confirmation of a long term bull trend

• The positive price structure is further augmented by the behaviour of volumes, which surged more than twice the 12 quarter average (23 lakh shares) during the recent breakout highlighting strong participation and augurs well for the longevity of the current bull trend

• Magnitude of the current rally during 2013-14 has already achieved parity with the 2009-10 bull run. Going forward, we expect the rally to extend towards 138.2% extension of 2009-10 rally (| 37-405) as projected from March 2014 lows of | 134 providing a target of | 660

Call has been initiated on i-Click to Gain on December 18, 2014 at 12:25 hrs

CMP: | 473.00 Buying range: | 455-474 Target: | 660.00 Stop loss: | 375.00

Quarterly Bar Chart

2007 385

37

Volumes surged more than twice the 12 quarter average during price breakout signaling strength in the breakout

Source: Bloomberg, Capitaline, ICICIdirect.com Research Market Capitalisation | 662 crore Equity capital | 15 croreFace value 10 52 weeks H/L 505.8/134200/50 days EMA 314 /389 52 weeks EMA 301.00

95

2010 405

Price breakout into new life highs above multi-year peaks flags off new uptrend

Long term tend line

19

Deal Team – At Your ServiceBank Nifty: Commander to zenith…

• The Bank Nifty emerged out of its four year consolidation by steering past the yearly highs of 2010 and 2013 towards mid-2014. The strong resolution past the four year consolidation band above 13300 has flagged off a strong bull run, which will continue to propel the sectoral heavyweight Bank Nifty in the forthcoming year as well

• We expect the Bank Nifty to continue its northward journey in 2015 and travel towards 24000 levels. The current rally off 2013 low of 8349 to recent all time high of 18929 has already surpassed the magnitude of 2009-2010 rally which measured around 10000 points. The faster pace and larger magnitude of current move as compared to the preceding rally clearly signals an extending market which has significant steam left to continue its rally in similar fashion. The next logical price objective in an extending markets is derived by plotting the Fibonacci price extension. The 161.8% Fibonacci price extension of 2009-2010 rally (3290 to 13320) measured from 2013 low of 8349 projects the next destination for current rally towards 24000 levels over the coming year

• From a structural point of view, the long term price chart of the Bank Nifty exhibits a strong underlying trend. Post the 2008 market wide deluge, the Bank Nifty was one of the first heavyweight index to surpass its 2008 peak (10806) in 2010 itself

• After a three fold rally during 2009-10 the index went into hibernation mode and consolidated between the broad range of 13300 and 7800 over the next four years between 2010 and mid-2014. Price wise, the index retraced its 2009-10 rally by just 50% while time wise correction extended to 200% of the preceding rally. Elongated time correction with limited price decline highlights the inherent strength in the trend. The index formed a double bottom precisely near the 50% retracement of 2009-10 rally (8000) and registered a strong breakout in 2014 to signal the end of the four year basing pattern and continuance of the larger uptrend

• The major support base for the index is placed around 15000 being the confluence of the 38.2% retracement of the 2013-14 rally and intermediate base formed during six month consolidation during June-October 2014

Source: Bloomberg, ICICIdirect.com Research

2008 10806

2009 3290

2010 13320

3 Fold rally between 2009-2010

Double Bottom near 50% retracement of

2009-2010 rally

CNX Bank Nifty Monthly Bar Chart

2013 13348

161.8% Fibonacci extension @ 24000

Support zone 38.2% @ 14900

The current rally from 2013 low of 8349 to recent all time high of 18929 is already larger than the 2009-2010 rally signaling extending market. We expect the Bank Nifty to continue its northward journey in 2015 and head towards 24000 levels

8349

20

BSE Auto Index (18389)

The sector has been one of the frontrunners post the 2008 era and continues to trend higher as seen from adjacent long term charts.

The space reflects footprints of a structural bull run as prices continue to trough above 13-quarter EMA (long term price average) suggesting consistent demand for auto stocks

The Auto Index accelerated full throttle after registering a strong breakout past its three years consolidation in early 2014. The sector has been in a well structured uptrend, thereafter, and is cruising northward in a rising channel

Deal Team – At Your ServiceSectoral Indices: Glance through technical charts

Source: Bloomberg, ICICIdirect.com Research

BSE Auto Quarterly Bar Chart

BSE Capital Goods Quarterly Bar ChartBSE Capital Goods Index (15192)

The sector witnessed renewed investor participation as the investor bias shifted from defensives to cyclical during 2014 upsurge. In the process, prices broke past the down trending trend line connecting 2008 and 2010 peaks suggesting resumption of fresh up trend and end of seven year consolidation phase

The bullish arguments in capital goods are also backed by our statistical approach to stock selection wherein a wide range of stocks from the sector have emerged

13-quarter EMA

Breakout from multi year consolidation

21

BSE PSU Index (8018)

The PSU space emerged as the dark horse during 2014 gaining 35% YTD, as the regime change with a strong mandate during general elections in May 2014 generated a lot of investor interest across the PSU space. The PSU index is at the cusp of moving out of a long term consolidation band.

The revival of bullish sentiment is already reflected on the charts as the index completely overhauled its preceding nine quarter fall (2011 to 2013) in just three quarters. The strong rally since the start of 2014 saw the index approach an important overhead trendline. The sideways consolidation just below the major trendline over the last few months is seen as a base building process before the impending breakout. We expect the index to eventually breakout above the overhead trendline and continue its up move as we head into 2015.

Deal Team – At Your ServiceSectoral Indices: Glance through technical charts

Source: Bloomberg, ICICIdirect.com Research

BSE PSU Quarterly Bar Chart

BSE Healthcare Quarterly Bar ChartBSE Healthcare Index (14385)

The long term price chart of BSE Healthcare index reflects a secular uptrend. The entire up move since 2009 till date has occurred in a well defined rising channel which highlights the inherent strength in the trend as the healthcare space attracts consistent buying support at elevated levels

After amassing over 45% gains in 2014, the index is expected to consolidate the gains while maintaining a positive bias in the coming year. The overall price structure remains positive and the healthcare index is expected to lend support to the benchmarks during intermediate corrective phases in the market

The Healthcare index continues to inch northwards in a well structured rising channel on long term horizon. Index is expected to lend support to benchmarks during intermediate corrective phases

22

BSE IT Index (10357)

The sector underperformed benchmarks during 2014, as it underwent consolidation during the first six months after the stupendous rally during 2013. The longer time interval chart, however, continues to reveal the bullish price structure. While a medium-term consolidation may not be ruled out, declines remain a buying opportunity.

While cyclicals remain the flavour, we expect the IT index to remain in a rising trajectory and remain market performer during 2015

Deal Team – At Your ServiceSectoral Indices: Glance through technical charts

Source: Bloomberg, ICICIdirect.com Research

BSE IT Quarterly Bar Chart

BSE Oil & Gas Quarterly Bar ChartBSE Oil & Gas Index (9842)

The burst of bullish momentum during the first half of the year lifted the index to challenge its 2010 peak. However, the index remain a laggard as frontline stocks like ONGC and Reliance surrendered most of the gains.

Structurally, the index has shown early signs of resumption of bull market. However, it may spend a few more quarters in consolidation before the next up leg. Therefore, a buying on decline strategy is preferred

Oil marketing companies and lubricant oil stocks remain preferred bets from a technical perspective

23

BSE Metal Index (10430)

The sector remains within a larger consolidation post 2008 and continues to lag benchmarks by a wide margin.

The larger consolidation since 2008 is seen taking a pictorial shape of a contracting triangle. We expect the current consolidation to mature over the next three to four quarters before the next leg of the bull trend pans out.

Deal Team – At Your ServiceSectoral Indices: Glance through technical charts

Source: Bloomberg, ICICIdirect.com Research

BSE Metal Quarterly Bar Chart

24

Deal Team – At Your ServiceUS Dollar Index (89.2) : Greenback wakes up from seven year slumber

• The year 2014 draws to an end after witnessing huge currency moves triggered by the forward guidance of the US Federal Reserve about interest rates. As a result, major global currencies like euro and Yen hard landed while the US Dollar Index rose from a multi-year slumber

• Sharp advance off May lows (79.90) steered the US Dollar Index past 2012-13 highs of 84.75 to fresh five year highs triggering a bull trend. The sharp rally is primarily contributed by weakness in euro and Yen, which contributes around 83% of weightage in the US dollar index. In the process, the index resolved past a multiyear consolidation

• While in the medium-term, the index appears to have stretched to overbought territory, the price structure points towards a further rally going into 2015. The 50% retracement of the 2002-08 decline (120-71) and value of the declining trend line drawn off 1985 and 2002 peaks projects upside target of 96 for the US dollar index over the next year

• The monthly MACD indicator, which has emerged above its signal line provides insight about the strong underlying momentum in the US dollar

Source: Bloomberg, ICICIdirect.com Research

US Dollar Monthly Bar Chart

79.90

71

84.75

50% retracement of 2002-2008 decline @ 96

March 200989.62

25

Deal Team – At Your ServiceGold Spot ($1197): Bear cycle extended

• The positive economic data out of the US and prospects of higher US interest rates from next year pushed the dollar to a four-year high against the euro, keeping the precious metal’s complex close to multi-year lows as investors showed better risk appetite and stayed away from the traditional safe-haven commodity

• Among the precious metal complex, the sharp decline in prices of gold since mid-2014 led yellow metal prices to fresh four year lows. The violation of yearly lows of 2013 ($1180) signals a shift of trend from sideways to negative and opens up further lower avenues for prices towards $1000 levels over a medium-term horizon

• After the sharp decline during 2013, bullion prices remained in consolidation mode throughout 2014 and oscillated in the broad range of $1180-1390. The floor of this consolidation rested upon the yearly low of 2013 at $1180. Despite several attempts during the first half of 2014, gold prices failed to rise above $1400 suggesting consistent overhead pressure

• We believe the breach of the 2013 low signals resumption of the preceding downtrend. Following the breakdown, we expect gold prices to remain in a downward trajectory and head towards $1000 over a medium-term horizon

• Monthly declining MACD has settled in a negative zone and continues to trend lower suggesting underlying negative momentum in prices from a medium-term perspective

Source: Bloomberg, ICICIdirect.com Research

Gold Yearly Bar Chart

13-month EMA

Gold Monthly Bar Chart

Gold prices breached 2013 low to signal resumption of the preceding downtrend. We expect bullion to correct toward $1000 in the coming year

Breach of long term rising trendline during 2013 signaled a major trend reversal. Bullion prices reacted lower after testing the breakdown area in 2014 signaling continuation of downtrend

26

Deal Team – At Your ServiceBrent Crude ($59.6): Consolidation to pan out after 2014 debacle

• Global commodity prices have been on a slippery path since June 2014. The safe haven demand for the US dollar amid an uncertain globaleconomic environment propelled the Dollar Index to a five-year high. As a result, dollar denominated commodities have remained in the line of fire. Factors like US independence in the energy sector and slowing growth in China and Europe added to the supply glut in crude oil prices

• After trading in a miniscule range of | 100-120 for 14 quarters, crude prices broke loose as they breached the lower band of the four year trading range. Resultant panic selling led prices to lowest levels since 2009 triggering major bear cycle for black gold since the 2008 crisis

• After the stupendous fall in the past couple of months prices are expected to stabilise near the $52-55 zone, which is a combination of key rising long term trend line (blue) and 80% retracement of the 2009-10 rally (36-128)

• However, given a weak long term price structure for Brent crude, upsides remain capped to $75 being the 38.2% retracement of the 2014 decline

Source: Bloomberg, ICICIdirect.com Research

Brent Crude Quarterly Bar Chart147

36

128

Breach of four year lows triggered panic sell off in Crude prices

80% retracement and long term trendline at $ 54

27

Deal Team – At Your ServiceStrategy 2014 Stock Performance

Source: ICICIdirect.com Research

Rec. Date Stock Recommended Rec Price Target Stoploss Exit Price % Profit/Loss Comment

Jan-14 JB Chemical 120.00 170.00 97.00 170.00 42.0 Target Achieved

Jan-14 Kesoram Ind 68.00 95.00 51.00 95.00 40.0 Target Achieved

Jan-14 CMC 1510.00 1940.00 1290.00 1940.00 28.0 Target Achieved

Jan-14 Ipca Lab 700.00 890.00 595.00 890.00 27.0 Target Achieved

Jan-14 Bosch 9600.00 12350.00 8000.00 12350.00 28.0 Target Achieved

Jan-14 Cummins India 458.00 575.00 380.00 575.00 26.0 Target Achieved

Jan-14 Colgate 1282.00 1585.00 1140.00 1585.00 24.0 Target Achieved

Jan-14 Tata Motors 368.00 440.00 315.00 431.00 19.0 Target Achieved

Jan-14 TCS 2090.00 2500.00 1860.00 2340.00 12.0 Book profit at 2340

Jan-14 Tata Global 145.00 225.00 115.00 148.00 2.00 Closed at cost

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,ICICI Securities Limited,1st Floor, Akruti Trade Centre,Road No 7, MIDCAndheri (East)Mumbai – 400 093research@icicidirect.com

DisclaimerANALYST CERTIFICATION

We /I, Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee, Vinayak Parmar Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures:ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com.ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances .This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason.

DisclaimerICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months.ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report.It is confirmed that Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee, Vinayak Parmar Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report.