MOSt Market Outlook

28th July 2020

Morning Update

Indian Indices CMP 1 D (%) YTD (%) Expect market to open on a positive note on account of global cues. Rally in the US market and strong opening Asian mar- Sensex 37,935 -0.5% -8.0% kets will be positive for the . U.S. stocks rose Nifty 11,132 -0.6% -8.5% on Monday as investors bet that the largest technology firms BSE Mid Cap 13,565 -1.0% -9.4% will power ahead in an uncertain economic environment. The BSE Small Cap 12,840 -1.0% -6.3% Dow Jones climbed 0.4% and Nasdaq Composite Index jumped 1.7%. However European equities fell, extending last week’s Global Indices CMP 1 D (%) YTD (%) decline, as new outbreaks of coronavirus infections in the Dow 26,585 0.43% -6.8% region fueled concerns about efforts to contain its spread, Nasdaq 10,536 1.67% 17.4% with airlines and other travel-exposed stocks leading the re- FTSE 6,105 -0.31% -19.1% treat. Both FTSE and CAC Index declined 0.3% each. Asian Nikkei 22,802 0.38% -3.6% stocks open on a strong note ahead of a US Federal Reserve Dax 12,839 0.00% -3.1% meeting where policy makers are expected to reinforce their dovish message. Gold extended gains after hitting an all-time MOSL Estimates FY20 FY21E FY22E high. Taiwan and South Korea Index surged 3% and 2% re- spectively. Both Nikkei and Hong Kong Index gained 0.5% and NIFTY EPS 472 454 637 1% respectively. US Dow Future is up 0.3% and SGX Nifty gained Nifty P/E 23.6 24.5 17.5 0.5% points

Last Close Prev. Close Derivatives Snippet Nifty PCR 1.49 1.74 3 Nifty July future closed at 11122.45 with a discount of 9.35 India VIX 25.02 24.54 points v/s 23.90 points discount in last session. CBOE VIX 24.74 25.84 3 Nifty futures OI decreased by 2.31% to 1.31 Crore while Bank Nifty futures OI increased by 0.49% to 18.14 Lakhs. Nifty 50 Top Gainers Symbol LTP % Chg 3 Nifty Put/Call Ratio (OI) has decreased from 1.74 to 1.49 ASIANPAINT 1,773 3.5 3 India VIX moved up by around 2.10% below 25.05 levels. A HCLTECH 701 3.1 bounce in VIX is giving a pause in market but INFY 947 2.6 overall lower is supporting the bullish scenario and intraday declines are being bought in the market. ULTRACEMCO 3,870 2.3 TCS 2,205 2.2 3 On front, Maximum Put OI is at 11000 followed by 10000 strike, while maximum Call OI is at 11500 followed Nifty 50 Top Losers by 11200 strike. We have seen Call writing in 11200 and Symbol LTP % Chg 11700 strikes, while minor Put writing is seen at 10900 ICICIBANK 359 -6.1 and 10950 strike. Option data suggests an immediate trad- ZEEL 146 -4.0 ing range in between 11000 to 11400 zones. HDFCBANK 1,080 -3.5 Actionable: AXISBANK 432 -3.1 Technical Trading Idea - Buy : Infosys INDUSINDBK 507 -2.9 (CMP : 948 SL : 918 TP : 1,010)

Sectoral Outlook SECTOR OUTLOOK Security in Ban period: IT Positive ADANIENT,BHEL,CANBK,GMRINFRA,IBULHSGFIN OIL & GAS Positive IDEA,INDUSINDBK,RBLBANK,SAIL MOSt Market Outlook

28th July 2020

Market Action

BSE 500: Top 10 Gainers BSE 500: Top 10 Losers Stocks LTP % Change Stocks LTP % Change PERSISTENT 857.3 10.9 ISEC 487.1 -9.3 DEEPAKFERT 143.6 7.5 M&MFIN 128.9 -8.9 LTI 2415.0 6.1 UJJIVAN 229.2 -7.2 GMM 4204.0 5.7 EQUITAS 52.8 -7.1 INOXLEISUR 254.0 5.7 REDINGTON 91.1 -6.3 JINDALSTEL 177.0 5.6 ICICIBANK 358.5 -6.1 SIS 364.1 5.3 GHCL 143.0 -6.0 TCIEXP 722.4 5.3 TRIDENT 6.6 -5.6 KAJARIACER 424.5 5.0 INDIANB 56.8 -5.5 SWSOLAR 236.4 5.0 MAHLOG 293.0 -5.5

Stock Near 52 Week Hig Stock Near 52 Week Low Symbol LTP 52 wk High 52 Wk High (%) Symbol LTP 52 wk Low 52 Wk Low (%) Mindtree 1,050 1,063 -1.2 Pidilite Industries 1,356 1,186 14.4 Muthoot Finance 1,363 1,377 -1.0 Vardhman Textiles 649 601 8.0 Vaibhav Global 1,312 1,360 -3.5 Cera Sanitaryware 2,273 1,986 14.5 PI Industries 1,769 1,838 -3.8 Coal India 130 119 9.0

FII & DII - Cash Activity (INR in Cr) Provisional FII & DII - F&O Activity (INR in Cr) Institution Net B/S OI Category 27-07-20 24-07-20 23-07-20 FII -453 410 1741 INDEX FUTURES 499.92 Short covering DII -978 -1003 -932 INDEX OPTIONS 206.8 Put buying STOCK FUTURES -147.8 Short built up MOSt Market Outlook

28th July 2020

Fundamental Update

Global Market Summary 3 U.S. Dow closed 115 points up (0.43%) yesterday 3 Dow Fut is trading 80 points positive currently 3 European indices closed down 0.3% yesterday 3 Today the Asian indices are trading up in the range of 0.3% to 1.7% Domestic Positive

Indian Market Summary 3 Nifty closed 62 points down at levels 11132 yesterday 3 FIIs sold shares worth Rs.453cr while DIIs sold shares worth Rs.978cr yesterday 3 India VIX closed at 25.02 levels (up 1.97%) yesterday 3 Currently SGX Nifty is trading 60 points up from previous close. Domestic Cues: Positive

News & Impact 3 Dr. Reddy's: The drugmaker announced that it has received approval of XEGLYZE lotion from the U.S. FDA. The approval triggers the contractual pre-commercialisation milestone of $20 million payable to Hatchtech Impact : Positive

3 Bharti Airtel: Hughes Network Systems, led by the U.K. Government and Bharti Enterprises, will acquire OneWeb out of bankruptcy. Hughes has agreed in principle to invest $50 million in the consortium Impact : Positive 3 Results Today: Nestle, Ultratech Cement, Indusind Bank, Quess Corp, RBL Bank MOSt Market Outlook

28th July 2020

Fundamental Update

Coromandel International (CMP: 790 TP: 908 BUY) 3 Higher fertilizer demand on better kharif season drives overall performance 3 Coromandel International reported robust performance, led by higher manufacturing volumes (+61% YoY), higher crop protection revenue, and operating leverage. 3 PAT more than quadrupled on higher EBITDA, lower tax rate, and lower interest cost. 3 Normal southwest monsoon predictions for the current year have augured well for the consumption of fertil- izers and agrochemicals, thus providing a good start to FY21. 3 We expect revenue/EBITDA/PAT CAGR of 10%/14%/18% over FY20-22E. We value CRIN at 18x FY22E EPS to arrive at TP of INR908. View: Buy

Tech Mahindra (CMP: 664 TP: 750) 3 TechM's resilience in revenue, especially in Enterprise, is encouraging given the current context. Decline in Communications (8.2% QoQ) was on expected lines given the overhang in Network Services. The margin surprise was led by better-than-expected control on SG&A costs. 3 Despite the elongated decision-making cycles, the company hinted at improving deal pipeline. Revenue and margins are expected to improve from hereon. Ramp-up in recently won mega deals was largely on track, a key positive. 3 We upgrade our EPS estimates over FY21-22E by 17% as we revisit our growth and margin trajectory in light of the surprise in 1QFY21 and optimistic commentary. 3 Accordingly, we see some headroom for the P/E multiple of TechM to catch up. We value the stock at ~14x FY22E EPS View: Positive MOSt Market Outlook

28th July 2020

Nifty Outlook Nifty index opened positive but failed to surpass imme- diate swing high of 11240 and drifted towards 11090 zones. It witnessed recovery of 40 points from lower levels but closed the session with the loss of around 60 points. It formed a Bearish Belt Hold candle as it made an opening high and witnessed selling pressure during the session. It has been consolidating in between 11050 to 11240 zones from last five trading sessions in which declines are being bought while follow up is missing. It requires a decisive range breakout for the next leg of rally. Now it has to continue to hold above 11050 to extend its move towards 11240 then 11333 and 11500 zones while on the downside key support exists at 11000 levels.

Bank Nifty Outlook Bank Nifty opened flattish but corrected sharply towards 21800 zones by falling 3.5% during the day. It formed a Bearish Belt hold candle with formation of lower highs from last three trading sessions. RSI indicator has given a sell signal by negative crossover on daily scale. Now it need to cross and hold above 22000 to witness an up move towards 22500 then 22750 zones while on the downside supports are seen at 21500 levels.

Indices - Support/ Resistance

Level CMP R1 R2 S1 S2 NIFTY 11,132 11,250 11,333 11,050 11,000 BANKNIFTY 21,849 22,500 22,750 21,500 21,250 MOSt Market Outlook

28th July 2020

Technical Trading Idea

Infosys BUY Duration : 2-3 Days Reco CMP SL Target Duration Buy 948 918 1,010 2-3 Days

3 Infosys is moving in a strong uptrend and sustaining above its major breakout on weekly and monthly chart. Currently, stock is moving at record highs and gave breakout from a Bullish Pennant pattern, which is a trend continuation pattern. RSI oscillator is placed posi- tively on both daily and weekly scale, indicating strength in the counter. 3 Considering current chart structure, we advise traders to buy the stock for an up move towards 1010 with stop-loss of 918.

Derivatives Trading Idea

NIFTY Short Strangle Strategy - July Series

Instrument Reco Lot Reco Price CMP 3 Index is expected to move in a wider trading range in between 10000 to 11000 zones 11400 CE Sell 1 24 13.85 9200 PE Sell 1 24 1.10 3 Maximum Put OI is at 10000 followed by 9000 which could provide support on declines 3 Maximum Call OI is at 11500 followed by 11000 strike NIFTY : Pay-Off Chart which could restrict its upside momentum 3 Thus, suggesting a Short Strangle strategy to get the benefit of time decay and decline in volatility

Net premium received : 48 points Keep stop loss of net premium of 96 points (Risk of· 48 points) Max reward : 48 points MOSt Market Bytes

28th July 2020

Derivatives Snippet

Nifty Option OI

Nifty Change in OI

Participant wise Derivatives Activity (In Contracts)

Participants Index Long Index Short Call Long Call Short Put Long Put Short FII -967 -8069 3084 3303 6014 3094 DII 0 3000 0 0 0 0 Pro 9364 -1211 27436 117888 34192 5796 Clients -12168 2509 237838 147167 -11091 20225 MOSt Market Outlook

28th July 2020

Derivatives Stock Setup

Long Build Up: (Bullish) OI Price Short Build Up: (Bearish) OI Price Symbol Fut Price % Chg OI (mn) % Chg Symbol Fut Price % Chg OI (mn) % Chg JINDALSTEL 177 4.9% 8.3 17.3% ESCORTS 1,106 -2.1% 1.9 17.0% BAJAJ-AUTO 3,019 1.1% 1.2 11.4% CANBK 97 -4.9% 8.8 12.6% MUTHOOTFIN 1,362 4.3% 3.0 9.4% AMARAJABAT 687 -3.5% 1.2 10.8% MINDTREE 1,052 2.8% 1.3 9.2% RECLTD 101 -5.4% 12.8 9.9% ICICIPRULI 459 3.9% 4.5 9.1% UPL 447 -1.8% 9.2 8.1%

Short Covering: (Bullish) OI Price Long Unwinding: (Bearish) OI Price Symbol Fut Price % Chg OI (mn) % Chg Symbol Fut Price % Chg OI (mn) % Chg GLENMARK 426 0.2% 4.6 -8.0% RBLBANK 180 -1.3% 14.6 -15.6% HINDALCO 158 1.3% 30.6 -4.3% CUMMINSIND 393 -0.3% 1.0 -14.1% TECHM 664 1.6% 8.8 -3.3% HDFCBANK 1,081 -3.1% 24.0 -10.4% SUNTV 382 1.0% 5.1 -2.7% BHEL 36 -1.7% 40.5 -7.8% HCLTECH 701 2.9% 14.8 -2.6% IBULHSGFIN 213 -0.8% 9.6 -7.7%

Technical Stock Setup

Oversold Stocks Overbought Stocks Stock Name LTP Stochastic Stock Name LTP Stochastic Hitachi Air Conditioning India 2,083 29.9 Larsen & Toubro Infotech 2,427 77.2 Take Solutions 39 26.9 CDSL 351 76.7 Kajaria Ceramics 425 76.0

Bullish Bearish Candlestick Pattern Stock Name Pattern CMP Stock Name Pattern CMP Westlife Development Dragon Fly 326 AU Small Fin. Bank Bearish Harami Cross 774 Hindustan Zinc Bullish Harami Cross 207 Lux Industries Bearish Engulfing 1,130 Asian Paints Bullish 1,778 Graphite India Bearish Marubozu 169 MOSt Market Outlook

28th July 2020

Derivatives Activity

Most Active Calls Symbol Expiry Date Strike Price LTP (Contract) Open Interest NIFTY 30-Jul-20 11,200 55.5 6,76,448 40,96,725 NIFTY 30-Jul-20 11,300 27.25 4,55,639 29,09,100 BANKNIFTY 30-Jul-20 22,500 120 6,05,972 10,71,125 BANKNIFTY 30-Jul-20 23,000 51.1 5,38,964 12,19,575 NIFTY 30-Jul-20 11,100 102 3,44,517 19,67,325 NIFTY 30-Jul-20 11,400 13.2 2,83,430 25,99,575 BANKNIFTY 30-Jul-20 23,500 23.85 3,40,811 8,82,050 NIFTY 30-Jul-20 11,500 6.7 2,31,731 45,14,475 NIFTY 30-Jul-20 11,150 76.4 2,10,515 8,09,625 BANKNIFTY 30-Jul-20 22,000 271.5 3,07,068 6,47,200

Most Active Puts Symbol Expiry Date Strike Price LTP Volume (Contract) Open Interest NIFTY 30-Jul-20 11,000 49 5,40,150 42,11,325 NIFTY 30-Jul-20 11,100 87 5,02,029 24,48,300 BANKNIFTY 30-Jul-20 22,000 430.05 7,04,102 5,71,675 BANKNIFTY 30-Jul-20 21,500 206.5 6,11,747 7,25,425 NIFTY 30-Jul-20 10,900 27.25 2,83,875 19,16,700 NIFTY 30-Jul-20 11,200 140.1 2,52,675 12,41,700 BANKNIFTY 30-Jul-20 21,000 82.55 3,84,916 6,03,600 NIFTY 30-Jul-20 10,800 15.1 2,19,095 25,03,350 NIFTY 30-Jul-20 11,150 112 1,54,409 4,10,775 BANKNIFTY 30-Jul-20 21,800 333 2,30,402 1,42,725

Arbitrage Opportunity Symbol Spot Price Fut Price Basis Basis(%) Action IDEA 8.05 8.15 0.10 1.24% Buy Cash & Sell Fut RBLBANK 178.8 180 1.20 0.67% Buy Cash & Sell Fut SUNTV 379.25 381.55 2.30 0.61% Buy Cash & Sell Fut IBULHSGFIN 212.3 213.45 1.15 0.54% Buy Cash & Sell Fut SAIL 34 34.15 0.15 0.44% Buy Cash & Sell Fut BHEL 36.2 36.35 0.15 0.41% Buy Cash & Sell Fut Note: Reverse Arbitrage (Buy Fut & Sell Cash) shall be done only if trader already have stock in their DMAT. Siddhartha Khemka Chandan Taparia Jay Purohit Head - Retail Research Derivatives & Technical Analyst Technical & Derivatives Analyst