Market Outlook
Total Page:16
File Type:pdf, Size:1020Kb
December 16, 2020 Other Product offerings Derivatives Strategy Underlying Action Derivatives View Biocon Buy Daily view Weekly view Duration : 1-2 months • PRODUCT 1 Stock recommendations in report Quant (Derivatives) Pick Action Scrip Target 1 Target 2 Stoploss Time frame Underlying Action Buy MINLIM DEC Fut at | 1471.00-1472.00 Mindtree 1482.8 1499.6 1460.3 Intraday Torrent Pharma Buy Sell BALIND DEC Fut at | 1635.00-1636.00 Balkrishna Ind 1624.3 1607.4 1646.8 Intraday HCL Tech Buy Buy COALIN DEC Fut at | 134.00-136.00 Coal India 149.5 127.0 Weekly Duration : 1-3 months For Instant• PRODUCTstock ideas: 2 Retail Equity Research Equity Retail SUBSCRIBE to mobile notification – on ICICIdirect Mobile app… Research Analysts Raj Deepak Singh Nandish Patel Securities ICICI [email protected] [email protected] Dipesh Dedhia [email protected] Intraday Outlook: Buy Bank Nifty in the range of 30300-30350 Index Outlook Nifty Future The Nifty is expected to trade between 13400 and 13700 amid high volatility. Sell Nifty 13700 Call (December 17 expiry) in the range of | 48-52 Target: | 35-25 Stop loss : | 65 Bank Nifty Future In the past one week, the index consolidated with 30500 acting as a midpoint amid high volatility. Except HDFC Bank, most other leading private banks ended in the red. On the weekly options front, it has significant OI at 30000, 30500 Put Derivatives View Derivatives and major Call OI at 30900, 31000. Thus, it may trade in the range of 30000-31000. Buy Bank Nifty in the range of 30300- 30350, Target: 30500-30700, Stop loss: 30200 F&O Highlights The Nifty ended almost flat on Tuesday led by gains in the Bajaj and HDFC group. However, the decline in other heavyweights capped the gains. On the options front, additions were seen in 13600 Call and 13500 Put strike. We feel a consolidation move will continue before crossing the 13600 hurdle. Stock Analysis Long build-up/short covering: Zee Entertainment, Bajaj Finance, Mindtree, Havells, JSW Steel and Voltas Short build-up/profit booking: Balkrishna Industries, Bata India, MGL, IGL, Axis Bank, BPCL and Aurobindo Pharma FIIs & DII Action FIIs bought | 2484 crore while DIIs sold | 2667 crore in the cash segment. FIIs sold index futures worth | 95 crore while in index options they bought | 1416 crore. In the stock futures segment, they sold | 177 crore. Frid ay Intraday Recommendations Retail Equity Research Equity Retail i) Mindtree ii) Balkrishna Industries – 22 ```` Note: Buy MINLIM DEC Fut at | 1471.00-1472.00 Sell BALIND DEC Fut at | 1635.00-1636.00 Note: Call initiation message CMP: 1471 CMP: 1634 will be broadcast on iclick-2- gain, if it is not initiated in Target 1: 1482.8 Target 2: 1499.6 Target 1: 1624.3 Target 2: 1607.4 opening session, then we Securities ICICI Stop Loss: 1460.3 Stop Loss: 1646.8 might initiate with revise levels on iclick-2-gain. Source: NSE, Seediff, Bloomberg ICICI Direct Research December 16, 2020 ICICI Securities Ltd. | Retail Equity Research Daily Nifty Snapshot Highlights of the last session & Pivot Levels Nifty futures ended at Spot Fut Basis Future OI PCR OI PCR Vol ATM IV a premium of 17 Current 13568 13585 17 13412250 1.77 1.41 19.34 points while IV fell by Previous 13558 13572 14 13448175 1.82 1.24 19.40 0.3% Change (%) 0.07% 0.10% - -0.27% - - -0.31% S3 S2 S1 Piv R1 R2 R3 Nifty future 13361 13398 13492 13547 13641 13696 13734 Bank Nifty future 30060 30169 30431 30605 30867 31041 31150 Weekly Nifty Options OI build-up Call OI Put OI 35 The major Put base is at 30 13500 strike with almost 32 25 lakh shares while the major OI in LacsOI 20 Call base is at the 13600 strike with almost 32 lakh 15 shares 10 5 0 Research Equity Retail Note: Index calls may be changed, if view – 13300 13400 13700 13500 13600 13200 differs during market hours and positional Strategy follow up recommendations given in Derivatives Strategy should notx be linked to intraday Date Stock View Strategy Reco Target SL P&L Comment index calls. 15-Dec-20 COLPAL Buy Long Fut 1631.5 1644.4 1618.6 - Not initiated Securities ICICI 15-Dec-20 MAHMHA Sell Short Fut 713.5 707.1 719.9 - Not initiated Back Source: NSE, Seediff, Bloomberg ICICI Direct Research December 16, 2020 ICICI Securities Ltd. | Retail Equity Research 3 Recommended Stocks : Historical price performance… Mindtree 1800 1600 1400 1200 1000 800 600 400 200 0 17-Jun-19 17-Jun-20 17-Oct-19 17-Oct-20 17-Apr-19 17-Apr-20 17-Feb-19 17-Feb-20 17-Dec-18 17-Dec-19 17-Aug-20 17-Aug-19 Balkrishna Ind 1800 1600 1400 1200 1000 Research Equity Retail – 800 600 400 200 0 ICICI Securities Securities ICICI 17-Oct-19 17-Oct-20 17-Apr-19 17-Apr-20 17-Feb-20 17-Feb-19 17-Jun-19 17-Jun-20 17-Dec-18 17-Dec-19 17-Aug-19 17-Aug-20 Source: NSE, Seediff, Bloomberg ICICI Direct Research December 16, 2020 ICICI Securities Ltd. | Retail Equity Research 4 Weekly Recommendation Weekly future recommendation: Long Coal India (COAIND) December future in the range of | 134-136; Target: | 149.5; Stop Loss: | 127 Rationale In the current leg of the Nifty towards 13500, buying was seen across PSU stocks. Coal India, in particular, has managed to move and sustain above its previous hurdle of | 130, which is a positive sign. The highest Call base for the stock is at the 140 strike above which positions have moved till the 150 strike, which should be the target for the stock. Closure in OI was seen as the stock moved above | 130 levels. We feel the short covering target for the stock is at | 150. DerivativesView Weekly Price performance 250 200 150 100 50 0 Retail Equity Research Equity Retail – 3-Jul-19 3-Jul-20 3-Oct-18 3-Oct-20 3-Oct-19 3-Apr-20 3-Apr-19 3-Feb-19 3-Feb-20 3-Jan-19 3-Jan-20 3-Jun-19 3-Jun-20 3-Sep-20 3-Sep-19 3-Dec-18 3-Dec-19 3-Dec-20 3-Nov-18 3-Nov-19 3-Nov-20 3-Aug-19 3-Aug-20 3-Mar-19 3-Mar-20 3-May-19 3-May-20 Recom m endation follow up Underlying V iew S trategy Reco Target S toploss Profit/L oss Com m ent ICICI Securities Securities ICICI United Breweries Bullish Buy F uture 1081 1154 1042 - Not Initiated Source: Bloomberg, ICICI Direct Research 5 December 16, 2020 ICICI Securities Ltd. | Retail Equity Research Nifty likely to consolidate with support at 13300… FII flows continued in December as well. After almost | 65000 crore inflows in November, the first 10 sessions of December witnessed inflows of almost | 30000 crore providing a further leg to the market move. During the week, the Nifty gained almost 2% while broader markets also saw continued momentum where both midcap and small cap indices gained almost 1.5% each From the options space, immediate option positions are visible at the ATM 13500 Put strike, which is the highest Put base for the coming weekly settlement. Continued writing among Put strikes has pushed PCR levels significantly high, which has increased the risk of some intermediate profit booking in the market. On the higher side, the highest Call base for the week is placed at the 13600 strike followed by 14000 strike. Hence, a further up move should be expected if the Nifty remains above 13500 India VIX rose marginally last week due to some profit taking on Friday. However, it remained below 20 levels. Till we do not see any major uptick in the volatility index, the current positive bias should continue Sectorally, the banking index holds the key for a further Nifty move. It has shown signs of consolidation. A round of profit booking can be expected in the banking space. However, stocks from the FMCG and technology space are likely to provide some cushion to the index in case of profit booking Nifty options OI build-up 35 Call OI Put OI 30 Retail Equity Research Equity Retail 25 – 20 OI in Lacsin OI 15 10 5 ICICI Securities Securities ICICI 0 13100 13200 13300 13400 13500 13600 13700 13800 13900 14000 14100 Source: Bloomberg, ICICI Direct Research December 16, 2020 ICICI Securities Ltd. | Retail Equity Research 6 Bank Nifty: 1000 points upsides may be seen above 31000… The Bank Nifty consolidated above 30500 for a major part of the week. Among private banks, HDFC Bank continued to witness profit booking whereas supportive action was seen from other private banks and PSU banks, led by SBI Most private banks witnessed support from its sizeable Put base and reverted higher due to which Call writers moved to far OTM strike, which is a positive sign As compared to the Nifty, Bank Nifty futures premium remained near 50 points whereas the OI continued to decline. As the index sustained above 30500, additions were seen in 31000 strike. However, more upsides could be seen above this level. Major Put OI writing activity was seen in 30000 strike Put followed by 29500, which remains the strong support zone The price ratio of Bank Nifty/Nifty remained flat last week as no major outperformance was seen in any of the indices. However, we continue to feel that more upsides are left in banking stocks.