MORNING MANTRA- NIFTY OUTLOOK 15TH APRIL, 2015

Nifty (8834.00, +53.65, +0.61%)
While the index is already in the supply zone yet we have to say the trend is still quite strong in that the momentum oscillators are still rising and so long as we see a sharp down day indicating reversal of a trend, it is likely to continue further. Today, the most critical level would be the 8800-mark; if the bulls were to be able to stay above this level then there would not be any weakness whatsoever. On the way up, again we need to monitor 8849 through 8891 supply zone—the significance of this zone lies in the fact that if the bulls were to be able to take it out decisively, we may see a fresh new top above 9119 in the current upswing; however, a failure to post a new top after clearing 8891 may suggest something to contrary.

• Most critical level for the day: 8800


• Strong resistance: 8849 – 8891


• Major resistance: 9060 – 9119


• Strong support: 8775 – 8754


• Major support: 8663 – 8650

Bank Nifty (18798.25, -2.60, -0.01%)

The index closed flat but what is more significant is the fact that it is failing to clear 18880 through 18900 supply zone over the last three consecutive trading sessions. Thus, that zone would act like the line of control—once seized and taken out by the bulls, the index would march ahead and higher while a failure to do so would imply a probable retreat and consolidation again at lower levels. Thus, today’s session for the Bank Nifty means a great deal: either we see the bulls marching forward or else the beat a hasty retreat to regroup their forces here. One thing needs to be noted here is that the bulls—despite their failure to push things beyond the 18900-mark—start with an advantage since they have ample support zones on the way down: first, between 18765 and 18552, and again from 18446 through 18421. Thus, unless the bears are able to push the index below the 18421 level, the bank bulls even if they were to beat a hasty retreat can always recharge their batteries and start firing on all cylinders.

• Most critical levels for the day: 18880 – 18900, its strong resistance zone as well


• Strong support: 18765 – 18552


• Major support; 18446 – 18421


• Major resistance: 19060 - 19195

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DAILY RECOMMENDATIONS

RECOMMENDATIONS

1. BUY ITC

2. BUY GMR INFRA

3. BUY SAIL

4. BUY NMDC

5. BUY RELCAPITAL

MARKET OUTLOOK- 10TH APRIL, 2015

Dear Customer,

 

Markets always tend to be interesting with something or the other happening all the time. Our Morning Mantra is released before the opening bell and it includes the market commentary along with Corporate & Global news for the day.

 

• U.S. stocks closed higher on Thursday, with energy shares leading the advance as crude oil rebounded off a sharp decline, while investors bet that companies would top lowered expectations this earnings season.

Dow Jones	17958.7	+56.2	+0.31%
Dow Futures	17887.0	+58.0	+0.33%
Hangseng	26952.6	+8.2	+0.03%
Nikkie	19920.9	-16.9	-0.08%
SGX Nifty	8806.5	-2.5	-0.03%

 

• Asian stocks pared their second weekly advance as Japanese shares fluctuated around a 15-year high and investors considered the outlook for Hong Kong equities amid this week’s surge. Australia’s dollar gained with oil.
• Market is expected to open on flattish note but may see some profit booking during the day.
• Warburg Pincus sells 27% stake in Metropolis back to Shah family. Financial details of the deal were not yet disclosed.
• The telecom regulator slashed ceiling rates by 23% on calls and 75% on texts while roaming from May 1.
• IndiGo & Jet Airways have revised ticket cancellation penalties on passengers Raising prices in some cases by 50%-100%
• Fitch Affirms India At BBB-, Outlook Stable Raises FY16 Real GDP Growth To 8% & 8.3% For FY17
• Sarla Performance Bulk deal - Dinero Wealth Advisors Private Limited buy 58549 shares at Rs 410. Own Leasing Private Limited buy 70000 at Rs.410. Tata Trustee Company limited sell 150000 Rs.410.18
• 3 banks refuse to fund Adani Project of Adani Enterprises
• Biocon says insulin Glargine gets nod from Mexican Health Authority
• Sun Pharma Advanced Research Co (SPARC) will replace ING Vysya Bank in the S&P BSE 200 index from April 16.Balkrishna Industries will replace ING Vysya Bank in the BSE S&P 500 index.
• Apollo PE to sell 3% stake in Dish TV via block deal, price range is Rs 81-85/sh. Moneycontrol
• VRL Logistics – IPO Note: VRL logistic IPO looks good. They are in sub truck load B2B logistic. Not like Gati which is in express cargo B2C logistic. Company fundamentals are strong with consistent high operating cash flow and ROE of over 20%. In good time company revenue has grown at 25% in FY11 and FY12 it slowed down in FY14 and FY15 to around 14%. In FY16 we have considered 15% growth. We expect company to do Rs.14.3 EPS in FY16 and on diluted Equity share is offered at 14.4 times which looks very attractive. If the share trade at 18 PE than share price can be Rs.258. Considering the valuation of other logistic companies like snowman Gati etc it may even get higher multiple.Subscribe
• Information Technology – Sector Preview – Institution Desk: With the global information technology (IT) services industry growing in low single-digits in recent times and Indian IT services industry in low teens, there is a shift in market share currently in favour of India heritage players. Large West-based players (except for Accenture and to some extent CapGemini) have steadily lost share even in renewal contracts. Until a few years ago, in a contract renewal situation, the win rate (anecdotally) of an incumbent was possibly as high as 80%-90%. However, things seem to have changed quite dramatically over the past few years as some India heritage players, or even players like Accenture have started taking the share away from the West-based incumbents. The win rate of the disruptors has apparently gone up to as much as 30%-40% in case of contract renewals. We believe the competitive landscape has expanded significantly over the past five-seven years, with some weak West-based players getting marginalised while some strong India-based players have stepped up to the plate. With the convergence of capabilities, strategies and delivery models, we believe the larger set of vendors ensures a significantly better bargaining power for the customers, especially in a contract renewal situation.  We believe India-based players, who have become the disruptors in the contract renewal space, will be the incumbents of tomorrow and therefore need to continuously provide productivity improvement for their customers. This means sustained investments in solutions, automation, etc and a cap on pricing. Structurally speaking, not a happy situation for margins.

 

• Results Announced

Bajaj Corp	Result ahead of expectation. Sales came at 235.4cr vs exp 229cr EBITDA came at 74.1cr vs exp 68.5cr PAT came at 54.4 cr vs exp 53cr Share is trading at 29.5 PE FY16 earning
CMC	Result is ok Company is merging with TCS

 

• Result to be Announced (PAT Rs cr)

Companies	Mar’14	Dec’14	Mar’15 Exp
11th April
Indag Rubber Ltd	6.34	7.43	na

 

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MORNING MANTRA NIFTY OUTLOOK- 10TH APRIL, 2015

Nifty (8778.30, +63.90, +0.73%)
The Nifty posts the fifth successive higher close in the wake of a very wildly gyrating trading session! Bulls continue in their domination, and today they are ably assisted by the bank stocks. After three trading sessions, the bank bulls were strongly back in action when poor fellows like us—analysts—were lamenting about the lack of participation from them. The Nifty closed at the strong resistance zone’s upper quartile. It needs to take out the 8800-mark decisively to move further up while everybody now seems to be gung ho about reaching the 9000-mark or posting a new high we need to digest things one at a time: let us first see conclusively that the Nifty takes out the 8800-mark; once that is done then we would like it to get past 8849 – 8892, the next strong supply zone. However, once the latter zone is taken out then there would be high probability of the index attempting to post a new all-time high.

There had been large scale short covering in 8000 through 8600-strike April Nifty calls in that the call option writers have bought back quite a sizable chunk of their erstwhile short sold positions here. The only exception had been the 8700-strike call where they added nearly 2 lakh units in Open Interest (OI). Interestingly, they also added over 7 lakh units in OI for the strikes 8900 through 9000. Thus, selling at higher levels in the Nifty call option market continues to happen. The Nifty put option writers did not, however, show much enthusiasm today to create fresh positions compared to the quantities they were adding in the past few days…Interesting development; in all likelihood, the last and final battle between the bulls and the bears is going to be fought in today’s session—a trading day that could really turn out to be the most significant day for this upswing.

• Most critical levels for the day: 8789 - 8800 (upside) & 8724 - 8681 (downside)


• Strong resistance: 8782 - 8810


• Strong support: 8724 - 8681


• Major support: 8632 - 8613


• Major resistance: 8849 - 8892

Bank Nifty (18416.60, -52.70, -0.29%)

After a pause on the first three days of the week, the Bank bulls are back in action with full gusto. Banks had been the weakest among all the sectors in the recent past if you leave aside the metals. Today, they started showing strength almost right from the word go. The bank index has managed to take out the resistance around 18781 quite ably backed by a lot of volume activity and fresh long position build-up as seen through good quantity April series put writing and major covering in the calls already sold earlier. Today, from a technical point of view, this index looks better placed compared to the Nifty, which did not show as much long addition as the Bank Nifty in proportion to their recent activity; of course, it is but quite natural.

If the Bank Nifty were to get past the 19000-mark and stay above 19050 through 19150 range then we could see this index doing its almost routine job of pushing the Nifty higher and higher. However, any failure to get past the 19000-mark after showing so much of a recovery in the last session would mean weakness may resurface at any point in time. It is imperative for the Bank Nifty to stay above the 18785-mark, where its 50-dEMA is located. For the Bank Nifty to remain bullish, this is the bare minimum requirement now.

• Most critical levels for the day: 18785


• Strong support: 18664 - 18550


• Strong resistance: 18990 - 19150


• Major support: 18449 - 18341


• Major resistance: 19313 - 19595

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DAILY RECOMMENDATIONS

1. BUY RECLTD IN CASH

2. BUY CROMPTON GREAVS IN FUT TARGET 188

3. BUY ITS IN FUT

4. BUY APOLLO LYRES IN FUT TARGET 212

MARKET OUTLOOK 8TH APRIL, 2015

Dear Customer,

 

Markets always tend to be interesting with something or the other happening all the time. Our Morning Mantra is released before the opening bell and it includes the market commentary along with Corporate & Global news for the day.

 

• U.S. stocks ended slightly lower on Tuesday, reversing course late in the session as strength in the dollar offset optimism about deal news.

Dow Jones	17875.4	-5.4	-0.03%
Dow Futures	17785.0	-20.0	-0.11%
Hangseng	25764.0	+488.4	+1.93%
Nikkie	19723.4	+82.9	+0.42%
SGX Nifty	8745.0	+18.0	+0.21%

 

• Asian stocks climbed toward a nine-month high, led by Hong Kong shares, and the dollar weakened before the Bank of Japan decides policy and the Federal Reserve releases minutes of its March meeting. Crude oil fell ahead of U.S. inventory data.
• Hong Kong is up by 2 % as it was close on last three trading days however China was open. It’s more of a catch up by index
• Market is expected to open on positive note and likely to remain range bound during the day.
• CCEA allowed the FDI limit to 49% from 35.07% in Glenmark
• Dr Reddy has filed three 505(b)(2) NDAs with USFDA. Though there is no immediate financial benefit, it is positive for long term growth of the company.
• CCEA has given the nod for qualified institutional buyers to infuse fresh equity of up to 7% in Aurobindo. The existing FII shareholding is at 27.32%.
• SBI, HDFC Bank and Lakshmi Vilas Bank have Cut Lending Rate By 15 bps whereas ICICI has cut rates by 25 bps.Marginal positive for NBFC and Housing finance co which borrow from banks
• The Union government on Tuesday cleared amendments to the Real Estate (Regulation and Development) Bill, 2013, paving the way for legislation on regulators for the sector. Developers, both in residential and commercial sectors, will be required to register their projects with the regulatory authorities to be set up and will have to mandatorily disclose all information regarding the promoters, project, layout plan, schedule of development works, land status and status of statutory approvals.
• Supreme Court Rejects Kingfisher's Plea Challenging Rs 372 Cr TDS Demand
• Supreme Infrastructure has bagged a Rs 207-crore contract from National Highways Authority of India for widening a road in Punjab.
• RBI Monetary Policy – Institution Desk: The Reserve Bank of India (RBI) kept key rates unchanged after its monetary policy review today. Going forward, the RBI has conditioned monetary policy action on four bases: a) Transmission of recent policy rate cuts by commercial banks, b) Evolution of inflation pressure, c) Fiscal measures to ensure better supply, and d) Normalisation of the US monetary policy. The central bank expects retail inflation to ease to ~4.0% by August 2015, before moving up to 5.8% by the end of FY16. Further, real GDP growth is projected at 7.8% in FY16, up from 7.5% in FY15. Amalgamating the RBI’s stance with our assessment, we maintain the central bank will pause in 1HFY16 before considering further rate cuts. In case, the monsoon turns out to be normal, the government delivers on its FY16 capital spending target and the US Federal Reserve postpones its rate hike to next year, the repo rate may be cut by another 50bps to 7% by the end of FY16. If these conditions are not met, the case for rate cut weakens.
• REC – OFS Note: REC Offer for Sale Note: Rural Electrification Corporation (REC), incorporated in 1969, is a leading public institution primarily involved in the financing of T&D and generation projects across India. Promoters of the company (Government of India) holds 65.64% stake implying 34.36% public holding. REC proposes to sell an aggregate of 4.94 cr shares representing 5% of the total share capital of the company.  The offer for sale opens today at a floor price of Rs 315 and the issue size is of Rs.1556 cr. As much as 20% of the offer size would be reserved for retail investors, who can bid for shares worth Rs.2 lakh. They would be offered shares at 5% discount to issue price. At the floor price of Rs 315 the share is offered at at P/E of 5.7x and 5.05x its FY15E and FY16E EPS and 1.28x and 1.08x its FY15E and FY16E BVPS

 

• Result Announced

GM Breweries

Result is ok

MORNING MANTRA NIFTY OUT LOOK 8TH APRIL, 2015

Nifty (8660.30, +0.40, +0.005%)
Late short covering rally coupled with fresh long positions build-up saw the index climbing 100 points from the day’s low and closing almost flat. Bulls had been back on the center stage. Open interest statistics for yesterday’s session show that call option writers covered their positions while the put writers added positions as if there were no tomorrow! The index has managed to stay above the 8630-mark for the second day in succession. Conflicting signals emerge from the trading pattern: the wild gyrations during the day showed that erstwhile short term uptrend that began from the 8270-mark lost directionality yet the addition of long positions show that bullish interest still prevails. One thing, however, remains to be seen with much less short positions outstanding coupled with huge long additions through put writing indicate that yesterday’s upward momentum must be maintained else we may see the trading pattern unfolding in reverse direction.

• Most critical level for the day: 8631 – 8621, its immediate support level


• Strong support: 8593 – 8580


• Strong resistance: 8693 – 8710


• Major support: 8549 – 8495


• Major resistance: 8752 – 8798

Bank Nifty (18469.30, -136.15, -0.73%)

RBI disappoints the bank bulls! No repo rate cut, no CRR cut, and not even any SLR cut! Huge rally in late session to prop up the index bypassed this sector and the Bank Nifty closed much lower by three-quarters of a percentage point. It looks weak; unless we see a significant recovery taking the index beyond the 18800-mark, this index would continue to show weakness. On the other hand, if the index were to fall below 18246 through 18188 strong support area it could see major weakness setting in. The most critical level for the day for the Bank Nifty lies between 18450 and 18490—if it were to trade below this range on sustained basis it would pave the way for greater weakness. Strength will surface only above the supply zone between 18700 and 18800 zone.

• Most critical levels for the day: 18450 – 18490


• Strong support: 18246 – 18188


• Strong resistance: 18700 – 18800


• Major support: 17960 – 17720


• Major resistance: 19140 - 19375