Market overview and events for the week

Market Overview: Market in first half of last week traded sideways but selling pressure intensified on last day of the week as key benchmark indices extended its previous losses to close at lowest level in more than four weeks. Broad based profit booking was seen in most of the sectors while selective buying was seen in Pharma and FMCG stocks.

Meanwhile, the Rajya Sabha yesterday, 12 March 2015, passed the Insurance Laws (Amendment) Bill, 2015, paving the way for increase in the limit for foreign investment in the insurance sector to 49% from 26%. On the macro front, data released by the government on 12 March 2015, showed that the rate of inflation based on the combined consumer price index (CPI) accelerated to 5.37% in February 2015 compared with revised rate of 5.11% increase in January 2015 and industrial production rose 2.6% in January 2015,compared with revised growth of 1.7% recorded in December 2014.

Nifty March Future gave closing at 8674.40 with the weekly loss of 314.35 points.

In near term it is likely to remain volatile and expected to trade with in a broad range of 8850 - 8400 for the time being having resistance at 8850, while with the breach of its immediate support level of 8650, more correction can be expected till 8430 level which is next important support.

 

Upcoming Events:

Data on inflation based on the wholesale price index for February 2015, trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar, crude oil price movement will dictate the near term trend on the bourses.

Developments in the ongoing budget session of Parliament will be closely watched. The budget session commenced on 23 February 2015 and concludes on 8 May 2015.

Among global events, a two-day meeting of the Federal Open Market Committee (FOMC) to review US monetary policy is scheduled on 17-18 March 2015.

 

Stock Recommendations:

1. IOC Futures

Sell Below - 338

SL- 343 TGT-333/330

 

Overall trend of the stock is bullish and is trading sideways from the last few weekly trading session, currently it is managing to trade above its crucial resistance mark of 338 with the breach of this level some correction is expected in the stock, further the stock is sustaining below its 50 and 200 days moving averages, Traders can expect the targets of 333 and 330 in the stock with the stop loss of 343.

 

2. NBCC

Buy above - 1051

SL - 990, TGT – 1112/1150

The over all trend of the stock is bullish and currently forming continuation pattern on the daily charts, which indicates further bull run can be seen in the stock. It is trading below the falling trend line on the charts and sustaining below the resistance mark of 1051, One may initiate the long position in the stock with the crossing of the resistance mark and may expect the targets of 1112 in it , with the stop loss of 990.

 

3. WOCKPHARMA

Buy Above – 1825

SL- 1775 TGT-1875/1900

Primary trend of the stock is bullish and is consolidating with the positive bias at the higher levels , it is also sustaining above its 10 and 50 DMA and is likely to register new highs with the crossing of the resistance mark. Traders can expect the targets of 1875 and 1900 in it above the mentioned level ,with the stop loss of 1775.

 

Market eyes on RBI Policy to be declared tomorrow starts on a flat note 

Market Overview:

Last week After a marginal gain in early part of the week, Nifty Future saw some mild correction but recovered and gave flat expiry and on the last day of the week it extended gains by hitting all time high of 8668 as bulls had complete control over the bears, getting help from factors like Organization of Petroleum Exporting Countries (OPEC) refrained from reducing output which led to sharp decline in global crude oil prices which will help India in containing its fiscal deficit, current account deficit, reduce the government's fuel subsidy burden and fuel price inflation. Broad based buying was seen across the board specifically led by banking, auto and oil sector. The fuel prices has been lowered with Petrol prices cut by 91 paise, diesel by 84 paise on Sunday. This should help the economy and aviation Industry but will hurt the OMC (Oil Marketing Company) stocks sentiments

Nifty December Future hitting fresh highs gave closing at 8638.35 with the weekly gain of 145.95 points.Market may open on positive note on Monday as a result of better then expected GDP numbers at 5.3% for the second quarter.In near term Nifty is likely to continue its uptrend with overall breadth of the market is positive. Support for the Nifty Future will be at 8500,8300 while resistance is at 8750.

The RBI could be expected to consider lowering rates with Price of oil dropping, and economy having a subdued performance Gross domestic product expanded 5.3 percent in the July-September quarter from a year earlier, as a manufacturing sector brought the market down. Growth in the previous quarter was at a 2-1/2 year high of 5.7 percent.

Upcoming Events:

·         Shares of automobile will remain in focus ahead of monthly sales numbers.

·         Market movement will depend upon interest rate decision by Reserve Bank of India in its bimonthly monetary policy review and further policy announcement in winter session of parliament.

·         Oil stocks should be watched on likely revision of fuel prices

 

Stock Recommendations:

BUY SUNTV IN NSE CASH ABOVE 330 WITH SL OF 315 TGT 345,355

Overall trend of the stock is weak, it is accumulating at the lower levels and is sutaining below the falling trend line. It is likely to show recovery with the breakout of the trend line at the level of 330. Further the stock is trading with the RSI of 49, in near term buying opportunities can be seen in it. One may take long position in the stock above the level of 330 with the stop loss of 315, where longs can be covered at the levels of 345.

 

BUY SYNDICATE BANK IN NSE CASH ABOVE 133.70 WITH SL OF 123.70 TGT 143.70,150

The stock is forming a reversal pattern on daily charts after showing correction from the higher levels. It is sustaining above its 50 and 200 DMA with the RSI of 60, and is trading below the crucial resistance level of 133.70, it is likely to continue its major bull run above the level of 133.70, where traders can take long position in the stock for the targets of 143.70. Nearest support level of 123.70 can be placed as stop loss for the stock.

 

BUY GRASIM IN NSE CASH ABOVE 3600 WITH SL OF 3520 TGT 3680,3750

The primary trend of the stock is bullish and is trading sideways on daily charts. Presently the stock is trading below the falling trend line and above its 50 and 200 DMA. In near term, it is likely to move upside with the breakout of the trend line at the resistance level of 3600, one can expect the target os 3680 in the stock with the stop loss of 3620.

 

BUY AXIS BANK IN NSE CASH ABOVE 485.90 WITH THE SL 461 OF TGTS 511, 525

The primary trend of the stock is bullish , stock is accumulating at the higher levels and sustaining below the major resistance mark of 485.90. It is trading above 50 and 200 DMA with the RSI of 61.One can can expect further buying the stock if it breaks its major resistance. Traders can get 511 and 525 in near term. Technical stop loss for the stock is at 461.

 

BUY TITAN IN NSE CASH ABOVE 375 WITH THE SL 360 OF TGTS 390, 400

After showing correction from the higher levels stock has formed reversal candle stick pattern on the daily charts. Currently it is trading sideways and sustaining below the falling trend line on the short term charts. Breakout of its tread line resistance mark at 375 may show fresh buying in the stock and lead its bullish rally in upcoming sessions. Traders can get targets of 390 and 400 while stop loss can be placed at 360.

Market looks bullish on charts; expected to make new highs

Market Overview:

Nifty Future begun the week with the gap up opening above its previous life time high of 8200 level as bulls had complete control over the bears and continued its rally upward throughout the week making all time high, getting help from factors like FIIs continuous buying, Brent crude declined to its lowest in four years. Some profit booking was seen in the market at higher levels.

In overseas markets, Asian stocks rose after a drop in American jobless claims bolstered optimism in the world's largest economy before a US government report on employment. S&P 500 and Dow Jones Industrial Average climbing to record levels after European Central Bank president Mario Draghi hinted at monetary stimulus of as much as euro 1 trillion for eurozone economy.

Nifty November Future gave all time high closing at 8381.65 with the marginal weekly gain of 28.95 points.

 

Open Interest Analysis:

Highest open interest was seen in 8500 November call option followed by 8400 call option while 8200 November witnessed highest open interest addition followed 8100 put option. This clearly indicates 8500 and 8400 can act as important resistance mark of Nifty Future while 8200 and 8100 will be crucial support level. Nifty November Future is likely to trade in range of 8500 and 8100.

Technically Nifty Future is still looking bullish on charts and if it sustains above the level of 8200 then it can make new highs in coming trading sessions.

 

Upcoming Events:

·         The government will unveil industrial production data for September 2014 on Wednesday, 12 November 2014. Growth of industrial output remained subdued at 0.4% in August 2014.

·         CPI based inflation for the October 2014 will be released on 12th November 2014. CPI eased to 6.46% in September 2014, from 7.783% in August 2014.

·         Government will unveil WPI (Wholesale price index) inflation for October 2014 on Friday, 14 November 2014. WPI eased to 2.38% in September 2014, from 3.74% in August 2014.

·         The Reserve Bank of India (RBI) is scheduled to undertake its fifth bi-monthly monetary policy review on 2 December 2014. Investors are expecting a rate cut as inflation is set to ease further on recent sharp cut in fuel prices.

·         Winter session of parliament will start on 24th November 2014. Decision on pending bills and further policy announcement may affect the movement of market.

·         Second quarter GDP numbers is scheduled on 28th November.

 

STOCK RECOMMENDATIONS:

CCL BUY

SL 129 TGT 145-150

The stock is bullish on charts and is trading below the resistance mark of 137 with the positive bias from the last few trading session and is sustaining with the RSI of 54. It is trading above its 50 and 200 DMA. Traders can initiate the long position in the stock above the resistance level of 137 for the targets of 145 and 150. Stop loss should be placed at 129.

 

ONGC BUY

SL 399 TGT 425-435

The stock is trading sideways in long term, Presently it is sustaining above its major support level and given breakout of its immediate resistance mark on last day of weekly trading session. It is likely to experience fresh buying with the crossing of its next resistance level of 412. One can expect the target of 425-435 in near future, with the strict stop loss of 399.

 

JP ASSOCIATE BUY

SL 32 TGT 35.10-37

Over all trend of the stock is weak. Recently its has started showing recovery after giving breakout of its major resistance. It may continue its recovery rally if crosses its resistance mark of 33.60 in upcoming sessions. Traders can expect targets of 35.10 and 37 in near term. Technical stop loss for the stock is at 32.

Strong Dollar Weakens Bullion Demand

MCX Gold future breach the low of 1.4 year low last week and posted its third straight weekly drop as Dollar Index showed straight rally and close to near four year high against a basket of major currencies and on track to witness third weekly gain due to strengthening US economy on steady pace ahead of Federal Reserve could raise rates soon. Government of India reduced the import tariff value on Gold and Silver. Reduction in tariff value played a important role in precious metal fall with global weaker trend. Tariff value on Gold has been brought down to $ 391 per 10 grams from $401 per 10 grams and Silver to $ 551 per kg from $575 per kg prompted by weak global price trends. Indian bullish equity market trading on its life time high also reduced the safe heaven appeal.

COMEX Gold plunged to the lowest level in more than four and half year as a gauge of dollar headed for the biggest weekly advance in more than a year which curbed the demand of precious metal. Prices of Gold is near to set second consecutive annual decline for the first time since 2000 as the US Federal Reserve may raise interest rates by next year while Europe and Japan's Central Banks are in pace to ease monetary policy to boost their economic growth. Individuals filing for initial jobless benefit last week reduced by 7000 to 278K from previous week's of 285K and ADP Non-Farm Employment Change unbeaten to 230K from 214K , acted as catalyst for bullish movement of Gold & Silver in later part of the last week. Holding in SPDR Gold Trust, the world's largest gold-backed exchange fell 0.41 percent to 732.83 tonnes on Thursday shrinking for a third day.

Silver tracked the trend of gold and also witnessed bearish movement last week. Silver prices are witnessing bearish movement from previous consecutive four week and traded below 4 year low. Bearish movement in Silver supported by cut in tariff value by government of India on 02 November 2014. MCX Silver December future witnessed more than 4% drop last week. COMEX Silver sustained below $16 and took support from psychological level of $15. 

Last week , both MCX Gold & MCX Silver started the week on steady note but continued their bearish trend for the entire week. Gold fell below its important support level of 25650 till 25164. Silver also fell below psychological level of 35000 till 33491 which is near to its 4 year lower price. Both Gold & Silver are still looking weak and international sentiments are also weak for bullion as US dollar is getting strengthen.

India and China are world's largest Gold Consumer and they represent more than 50 percent of the global demand. Last year China overtook India as a largest Gold consumer globally. According to World Gold Council, Gold demand from China shrank 52 percent to 192.5 metric tons in the second quarter from a year earlier because of a clampdown on corruption. Top consumer of yellow metals typically tend to buy bars, coins and a lot of jewellery, whenever prices fall in global market and provide floor to the down market but  that hasn't happened this time. This year's weak buying from China could add more pressure on gold prices in future. Demand from India fell from also fell by 34 percent in the first six months of the year as government put restriction on gold imports to protect the rupee. After ending Quantitative Easing program by Federal Reserve, FII's investment in Indian equity market reached to its highest level ever, which also play a very important role in bearish sentiments for precious metals.

For this week, major U.S. data Unemployment Claim, Core Retail Sales, Retail sales and Prelim UoM Consumer Sentiment coupled with physical demand in Asian region will further provide direction to the bullion.

Market upside expected to continue will take cues from government policies

Nifty Future begun the week with the gap up opening after diwali festivals as bulls went out on a rampage and continued its rally upward throughout the week breaking its previous high getting help from several factors like lower oil prices, deregulation of diesel and gas pricing, outcome of the Federal Reserve adding to the positive sentiment, Posting better than expected second quarter earnings of heavy weights like Maruti, Tech Mahindra, Ranbaxy, Yes bank and FIIs buying also added zing to the market. All round broad based buying was seen in the market led by the banking sector. More records were shattered on expiry day with total turnover crossing the Rs 10.40 lakh crore mark for the first time ever.

The US Federal Reserves historic USD 4.5 trillion dollars asset purchase programme or quantitative easing (QE) has reached the end of the road.

Movement of index in near term will depend on upcoming measures taken by the government and results of important companies of second quarter earnings. Good auto sales number of companies driven by festive demands are expected to come in start of the next month.

Nifty November Future gave all time high closing at 8355 with the net weekly gain of more than 300 points.

Last week nifty opened gap up above the psychological level of 8000 and managed to sustain above the important support level of 7960 and continued its rally upward getting help of short coverings in the market due to expiry of contracts. In near term if it sustain above its immediate support level of 8200 it is expected index to continue its bull run and will see more new highs in the days to come.

Another major development has been the government approval for FDI and easier norms will have a positive impact on reality stocks. After the news was out stocks responded in a very positive manner and infra stocks reached higher levels stocks like Unitech , HDIL IBREALEST, Oberoi Realty etc were up by more than 4% moreover it was good news for DLF which was going through huge selling pressure from past 1 month stock rose 5% after the announcement.

This is a revolutionary step in the infra sector, as relaxation in FDI norms will boost up the growth in infra, Mining and other related sectors paving path for development. Such move definitely shows the keen interest of the central government in the real estate sector. These enhancements in the real estate can provide an impetus for the growth across various sectors, generating tremendous employment and thereby boost the entire economic outlook for the country. The major impact of this move will be reflected on smaller developers who had to rely on domestic financial institutes for financial aid now such builders can get required capital from external sources and this will reduce the dependency on banks or other domestic institutions

Stocks which can be in focus:-

HDIL – Stock is currently trading around 84 & post announcement stock had given a good jump, Traders can expect further bullishness in it and can expect target of 93 in near term. DBREALTY –Currently stock is hovering around 66, on intraday chart stock is forming a good consolidation. Traders can expect stock to rally till 73 in near term.

Upcoming Events which can impact the market

  • The ongoing second-quarter earnings season and key macroeconomic data in India will set the tone on the domestic bourses in the week ahead.
  • Trading will be truncated next week as the stock market remains shut on Tuesday, 4 November 2014, on account of Muharram and on Thursday, 6 November 2014, on account of Gurunanak Jayanti.
  • Trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will also dictate near-term trend on the bourses in the forthcoming week. Fall in crude oil prices augur well for India as the country imports 80% of its oil requirement.