July 25, 2019 Other Product offerings Derivatives Strategy Underlying Action Power Grid Buy Derivatives View Duration : 1-2 months Click here to see open calls • PRODUCT 1 Positional Quant (Derivatives) Pick Intraday Underlying Action L&T Buy New recommendations in the report Bharti Airtel Buy Action I-Direct Code Target 1 Target 2 Stoploss Time frame Berger Paints Buy Buy PIDIND JULY Fut at | 1228.00-1230.00 PIDIND 1141.0 1159.0 1117.0 Intraday Sell UNIP JULY Fut at | 610.00-611.00 UNIP 601.0 586.0 621.0 Intraday Click here to see open calls For Instant• PRODUCTstock ideas: 2 Retail Equity Research Equity Retail SUBSCRIBE to mobile notification – on ICICIdirect Mobile app… Research Analysts Raj Deepak Singh Amit Gupta Securities ICICI [email protected] [email protected] Nandish Patel Dipesh Dedhia [email protected] [email protected] Intraday Outlook: Buy Bank Nifty in range of 28900-28950 Index Outlook80 Nifty Future: The Nifty is likely to open flat on the back of mixed global cues. Sell Nifty in the range of 11305-11322 Target: 11288-11263, Stop loss: 11339 Bank Nifty Future Volatility remained high in banking stocks while selling spree continued in PSU banks along with Axis Bank. The index ended at the lowest levels since May 17, 2019. We feel selling will continue. The index is likely to slide towards 28500 in coming days. Buy Bank Nifty in the range of 28900-28950, Target: 29050-29150, Stop loss: 28800 View Derivatives F&O Highlights The Nifty started the day below its highest Put base of 11300 and remained under pressure throughout the day. Stock specific selling continued where PSU banks along with other heavyweights continued their downfall. The market breath was negative whereas IVs further contracted by 5% Stock Analysis Long build-up/short covering: Asian Paints, Torrent Pharma, Indigo, Pidilite Industries and HDFC group Short build-up/profit booking: Jubilant Foodworks, UPL, IGL, Muthoot Finance, L&T, UPL Ltd and Biocon FIIs & DII Action FIIs sold | 1394 crore while DIIs bought | 2140 crore in the cash segment. FIIs sold index futures worth |1263 crore while in index options they sold | 1776 crore. In the stock futures segment, they sold | 187 crore Intraday Recommendations Retail Equity Research Equity Retail – i) Pidilite Industries ii) UPL Ltd 22 Buy PIDIND JULY Fut at | 1228.00-1230.00 Sell UNIP JULY Fut at | 610.00-611.00 Note: CMP: 1228 CMP: 611 Call initiation message will be broadcast on iclick-2-gain Target 1: 1141 Target 2: 1159 Target 1: 601 Target 2: 586 Securities ICICI Stop Loss: 1117 Stop Loss: 621 Source: NSE, Seediff, Bloomberg ICICI Direct Research July 25, 2019 ICICI Securities Ltd. | Retail Equity Research Back Daily Nifty Snapshot Highlights of the last session & Pivot Levels Spot Fut Basis Future OI PCR OI PCR Vol ATM IV Nifty futures ended at a Current 11271 11278 7 21914775 0.96 1.03 12.76 premium of 7 point with Previous 11331 11334 3 21335325 1.07 1.05 13.45 a fall in IVs by 5.41% Change (%) -0.53% -0.49% - 2.72% - - -5.41% Pivot levels (July) S3 S2 S1 Piv R1 R2 R3 Nifty future 11029 11158 11218 11287 11347 11416 11545 Bank Nifty future 28337 28701 28839 29065 29203 29429 29793 Monthly Nifty Options OI build-up 40 Call OI Put OI 35 The highest Put base is at 11300 30 strike with almost 22 lakh shares 25 while the highest Call base is at the 20 11400 strike with 37 lakh shares OI in Lacs OI 15 10 5 0 Retail Equity Research Equity Retail Note: The given index recommendation in – 11100 11200 11300 11400 11500 11600 11700 11000 this report is intraday recommendation and Strategy follow up should not be linked with positional view & recommendations given in Derivatives Date Stock View Strategy Reco Target SL P&L Comment Strategy report, which may have a different 24-Jul-19 BERPAI Buy Long Fut 313.5 316.5 310.8 - Not Initiated view Securities ICICI 24-Jul-19 TITIND Sell Short Fut 1096.0 1088.0 1104.0 - Not Initiated Back Source: NSE, Seediff, Bloomberg ICICI Direct Research July 25, 2019 ICICI Securities Ltd. | Retail Equity Research 3 Recommended Stocks : Historical price performance… price Historical : Stocks Recommended July 25,July 2019 Source: NSE, Seediff , Bloomberg Bloomberg , ICICI Direct Research Direct ICICI ICICI Securities Ltd. | Retail Equity Research Equity | Retail SecuritiesLtd. ICICI Pidilite UPL Ltd UPL 1400 Industries 1200 1000 800 600 400 200 0 6-Jul-17 6-Jul-19 6-Jul-18 6-Jan-18 6-Jan-19 6-Sep-18 6-Sep-17 6-Nov-18 6-Nov-17 6-Mar-18 6-Mar-19 6-May-19 6-May-18 800 700 600 500 400 300 200 100 0 6-Jul-18 6-Jul-19 6-Jul-17 6-Jan-18 6-Jan-19 6-Sep-17 6-Sep-18 6-Nov-18 6-Nov-17 6-Mar-19 6-Mar-18 6-May-18 6-May-19 4 ICICI Securities – Retail Equity Research Weekly Recommendation Weekly future recommendation Short Marico (MARLIM) July future in range of | 367-368. Target: |342; Stop Loss: | 381 Rationale Broader markets have declined sharply last week while sell-off was observed across sectors. The outperforming space like FMCG has also come under pressure amid fresh short additions. Stocks like Marico, which have been quite resilient recently witnessed Derivatives View fresh short additions to the tune of almost 15% last week itself indicating expectation of further downsides. The stock was finding it tough to move above | 375 levels despite many attempts in the last couple of weeks. We believe these levels were utilised for creating short positions. We expect it to move towards | 340 levels in the coming sessions. Price performance 450 400 350 300 250 200 150 100 50 0 Retail Equity Research Equity Retail – 29-Jul-17 31-Jul-18 29-Oct-17 31-Oct-18 30-Apr-18 30-Apr-19 28-Feb-18 28-Feb-19 29-Jan-18 31-Jan-19 29-Jun-17 30-Jun-18 30-Jun-19 29-Sep-17 30-Sep-18 29-Dec-17 31-Dec-18 29-Nov-17 30-Nov-18 29-Aug-17 31-Aug-18 31-Mar-19 31-Mar-18 31-May-19 31-May-18 Recommendation follow up Underlying View Strategy Reco Target Stoploss Profit/Loss Comment Securities ICICI Apollo Hospitals Bullish Long Futures 1373 1460 1305 12500 Profits Booked Source: Bloomberg, ICICI Direct Research 5 July 25, 2019 ICICI Securities Ltd. | Retail Equity Research Nifty moving towards 11300 in expiry week… • The Nifty succumbed to FII selling pressure and declined from the highest Call base of 11700, which remains a short-term hurdle for the market on intermediate pullbacks. The index is heading towards 11300 Put strike, which gained open interest since the Budget day • Nifty futures open interest has reduced, which indicates towards liquidation of long positions. FIIs closed cash positions to the tune of | 1400 crore just before the FM’s announcement on FPI taxation • Volatility has reverted from lower levels but is still quite low near 12%. Heavy selling in Call strikes has led to these lower volatility levels and restricted the Nifty recovery above 11700 • Nifty future premium has reduced in the last couple of weeks. Last week, it declined from 10 to -6 and has ended par to negative during the week. This translates into current profit booking trend in the market. It may still take some time for the index to start getting the momentum back Nifty options OI build-up 40 Call OI Put OI 35 30 25 Retail Equity Research Equity Retail 20 – OI in Lacsin OI 15 10 5 0 11100 11200 11300 11400 11500 11600 11700 11800 11900 12000 ICICI Securities Securities ICICI Source: Bloomberg, ICICI Direct Research July 25, 2019 ICICI Securities Ltd. | Retail Equity Research 6 Bank Nifty: 30200 hurdle on upsides… . For the major part of the week, the Bank Nifty continued its consolidation and remained above 30500 levels. However, on the weekly expiry day, it closed below these levels which acted as a turning point. Cash based selling by FII’s pushed Bank Nifty well below its sizeable Put base of 30000 . Despite bond yields falling to two and half year lows, there was no major buying trigger in banking stocks. Call writing blocks were seen in most private banks, which kept the index move in check and finally gave up all its gains . As the index slipped below 30000 levels, Call writing OI blocks were seen in 30200 strikes which would continue to act as a hurdle going forward. On the lower side, Bank Nifty may decline towards 29400 which be the target, going forward . On the back of selling in banking stocks, the current price ratio of Bank Nifty/Nifty has moved lower to 2.60 levels. We feel the ongoing trend will continue and selling is likely to accelerate once Bank Nifty manages to close below 29500 levels Bank Nifty options OI build-up 900 Put OI Call OI 800 700 600 Research Equity Retail – 500 400 300 200 OI OI Thousands in 100 ICICI Securities Securities ICICI 0 29600 29700 29800 29900 30000 30100 30200 30300 30400 30500 30600 30700 30800 30900 Source: Bloomberg, ICICI Direct Research July 25, 2019 ICICI Securities Ltd. | Retail Equity Research 7 Global markets remain on edge as trade friction, growth concerns linger… • The S&P index is likely to snap two-week consecutive gains as resurfacing US-China trade concerns as well as US-Iran geo-political worries are weighing on risk sentiment.