(Daily-Reports) 16 Mar 2021
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AA personperson whowho kkeepseeps patiencepatience isis suresure toto winwin inin shareshare markmarket.et. W S ealth Cr u r eator e thru Systematic Investment s h R a t Suresh Rathi h Wealth Creator thru Systematic Investment Daily Research Reports i Disclosures and Disclaimer : This report must be read with the disclosures in the Disclosure appendix, and with the Disclaimer, which forms part of it. This document does not contain any investment views or opinions. Suresh Rathi Tuesday Wealth Creator thru Systematic Investment Market Forecast 16th March, 2021 Good Morning & Welcome to Tuesday’s trading session at Dalal INDICES Street dated 16th of March 2021. Nifty 14930 -0.67% Bulls are likely to be on the back foot on backdrop of: Bank Nifty 35183 -0.88% 1.Rising bond yields. Nifty Auto Index 10335 -0.47% 2.Rising oil prices Nifty FMCG Index 33059 -0.03% 3.Rising COVID cases Nifty Infra Index 4202 -0.71% Nifty IT Index Also on back-burner would be the double whammy to the Indian economy: 26032 0.56% Nifty Media Index 1691 -1.44% A) Industrial production growth re-entered the negative territory by contracting 1.6% in January. Nifty Midcap Index 6927 -0.54% B) Retail inflation soared to a three-month high of 5.03% in February on Nifty Metal Index 3880 1.04% backdrop of rise in food items Nifty Pharma Index 12025 -1.31% Technically speaking, the line in the sand on Nifty is at 14737 mark. Nifty Reality Index 348 -0.40% If Nifty breaks below the 14737 mark then it will be prudent to sell Nifty Smallcap Index 8416 -0.79% first and then ask question later… Sensex 50395 -0.78% On the upside Nifty will face hurdles at 15157 mark. SGX Nifty 14941 -0.17% The biggest supports on BANK NIFTY is at its yesterday’s low at 34430 mark. Expect waterfall of selling below 34430 mark. Outlook for the Day • Preferred trade on Nifty (14930): Sell between 15050-15100 zone. Nifty's key support at 14737 mark. Targets at 14737/14467 mark and then aggressive targets at 14231 mark with stop at 15457. • Preferred trade on Bank Nifty (35183): Sell between 35751-36001 zone. Targets at 34430/32753 mark and then aggressive targets at Nifty Outlook 29500-29687 zone with stop at 37893. W S Intraday Neutral (14861-15207)ealth Cr • BULLISH STOCKS: TATA POWER, ESCORTS, UPL, INFY, TATA STEEL, u Neutral (14457-15751) SAIL, OBEROI REALITY. Medium Term Long Term Neutral (13501-16001) r • BEARISH STOCKS: RELIANCE INDUSTRIES, INDIGO, APOLLO eator TYRES, ASHOK LEYLAND, MCDOWELL, M&M FINANCIAL, BEL. e thru Systematic Investment • Our chart of the day suggests some pain ahead and is bearish on s stocks like APOLLO TYRES, PAGE INDUSTRIES, LIC HOUSING FINANCE Key Levels to Watch h and PEL with an inter-week perspective. On the buy side, we like INFY, Nifty Support 14737/14467 ESCORTS & TATA POWER with inter-month perspective. R Nifty Resistance 15157/14433 • SHOW ME THE MONEY: Buy TATA POWER (CMP 112): The interweek/intermonth risk is on the upside with aggressive targets at a all-time-high at 160 mark. Immediate targets at 125. Momentum Pivot Level t oscillators signaling strength. Interweek Strategy: Buy at CMP, and on h Nifty 14721 dips between 99-102.50 zone, targeting 125/131 and then aggressive targets at 160 mark with stop below 95. i Wealth Creator thru Systematic Investment Suresh Rathi Wealth Creator thru Systematic Investment Market Forecast Outlook for Tuesday: Nifty likely to consolidate. Technical Strategy Hurting sentiments are the WPI inflation that spiked to a 27-month high in INFOSYS 1374 Feb owing to costlier food, fuel. Wholesale inflation rose to 4.17% in February as against 2.03% in the previous month. Action Buy This spike in CPI & WPI effectively dims hopes for any policy rate reduction in Target 1501 the near term. Support 1231/1179 Now, here are other key things to know before today’s market opens: Resistance 1393/1551 • The 18th March expiry Put-Call Volume Ratio was at 0.85 for the Nifty Holding Period 60-90 Days. and 1.09 for Bank Nifty. • For Nifty, Maximum Call Open Interest (OI) stands at 16000 Strike Price, Incorporated in the year 1981, Infosys is a NYSE listed global IT followed by 16500 Strike Price for 18th March Series. Short buildup was consulting and software services company and now commands a seen at strike prices 15100-15700. market cap of Rs 585,675 Crore. Infosys is a global leader in next-generation digital services and consulting-- plays a lead role in businesses which specializes in the insurance, banking, and • Maximum Put Open Interest (OI) was seen at strike price 14500 tele-communication and manufacturing sectors. INFY’s clientele followed by 14800 strike prices for 18th March series. Short covering is from 46 countries and primarily navigates their digital transformation. Digital business now contributes 50% of the was seen at strike prices 15000-15600. revenue and will continue to grow at a strong pace on the expense of core legacy business. INFY’s services includes: e- • For Bank Nifty, Maximum Call Open Interest (OI) stands at 37000 Strike business, program management, supply chain solutions, application development, product co-development, and system Price and Maximum Put Open Interest stands at 34000 Strike Price. implementation and system engineering. The key positive catalysts in favor of the stock price are: Healthy • The Yields were lower on Monday with the rate on the 10-year Treasury large deals pipeline that should further improve company’s note down 3 basis points to around 1.60%, still near its highest levels in evolution prospects considerably in the long term; solid demand environment There is strong demand from cloud, cybersecurity around a year. In theory, higher bond yields make it tougher to justify & data analytics, end-to-end digital capabilities, ability to implement projects at scale across geographies and improved stretched valuations for the most expensive stocks, while expectations positioning and most importantly, stable pricing environment + for a broader economic reopening make cyclical stocks more attractive. strong hiring and talent retention. Large deal contract value reached all-time high of USD 7.13bn during the quarter, largely • Any upside at Dalal Street is likely to be capped as long as the theme contributed from the Daimler wins. Additionally, active clients stood at 1,562 (139 new clients in Q3FY21). Also, higher investment in IT, digital transformation should support revolves around the U.S. 10-year yield which the street suspects to W S company’s performance immensely. spike towards 1.8%. The speedy distribution of vaccines and more ealth Cr The optimism is on backdrop of management’s revised upward u fiscal aid have spurred concerns of rising inflation despite assurances guidance for FY21 revenue and operating margin to 4.5-5.0% CC from the Federal Reserve to maintain an accommodative policy. (earlier; 2-3% YoY on CC) and 24.0%- 24.5% (earlier; 23-24% YoY on CC), respectively, on the back of large deal wins and r strong pipeline. Also note, INFY’s digital portfolio is growingeator at a • Rising rates are seen as the biggest concern for Dalal Street and equity very strong rate of ~30% in FY21 driven by strong demand for e investors across emerging markets. Well, if the bond yield keeps cloud, cybersecurity and data analytics. thru Systematic Investment Technically, brace yourselves for a breakout play on the daily s increasing in the near future then there could be some FII outflow from time frames. The recent sequence of higher high/low is intact on emerging markets like India and could also impact emerging markets all time-frames. An impulse uptrend is seen forming on the h weekly time scale too, with positive SAR series. currencies. Add to that a bullish divergence and a rising stochastic signal (on daily charts) with recent increase in volumes signaling a larger R • So, this week’s FOMC meet is crucial in the wake of rising 10-year bond rebound. The 200 days Exponential Moving Average (EMA) of the yields, though markets largely expects the Fed to maintain the interest stock on the daily chart is currently at 1101 zone. The level of 1101-1111 zone will act as a strong support zone and any a rate at 0.25% and continue with the purchase of treasury securities and corrective declines to these levels offer opportunities to initiate long positions. mortgage-backed debt. The street suspects’ interest rates to remain t Aggressive investors should look to buy at CMP, and on dips low for a longer time and Federal Reserve Chairman Jerome Powell between 1275-1301 zone, targeting psychological 1500 mark. h could say that the economy was far from reaching the central bank's Aggressive targets at 1551-1600 zone. Stop at 1179. Holding period 3-5 Months. i Inflation and employment targets. Wealth Creator thru Systematic Investment Suresh Rathi Wealth Creator thru Systematic Investment Market Forecast Bottom-line: The street will spy with one big eye on the two-day Federal Reserve meeting that will conclude at around 11.30 PM IST of March 17. FII/DII & OPTIONS DATA: • The Put-Call Open Interest Ratio was at 1.29 for Nifty. • Stock banned in F&O segment: BHEL, SUNTV. • FIIs were net buyers last week at Rs. 2,199.74 crores but DIIs were net sellers at Rs. 2635.39 crores. • FIIs and DIIs Friday’s (12th March) provisional data figure shows they sold shares worth Rs. 942.60 crores and 163.87 crores in the Indian Equity Market.