Global
rally consolidates with US bank earnings key in deciding way forward
for equities. US Dollar rallies from 10 month low as bond yields
stabilise while oil prices remain weak.
Asian
indices opened in the red as US Dollar rally saw profit booking in the
Japanese markets which resumed trading after a holiday on Monday.
All eyes will be on Central bankers this week as expectations of
earlier than expected rate hikes could hurt sentiment going forward.
Rise in German 'bunds' is the main cause of alarm as the markets price
in change in stance from the ECB on Thursday.
Nifty
closed over 9900 as Reliance, Hind Unilever, Wipro, ICICI Bank and
Metal stocks charged the Nifty forward with foreign flows mitigating the
local selling. With PCR (put call ratio) at 1.5 plus levels the markets
continue to be overbought but nearness to 10000 is seeing no let up in
sentiment which drives the indices higher. For today expect
consolidation as mid-caps join the rally with earnings form key
heavyweights dominating the proceedings.
Technical view: Nifty
finds strong support around 9850 while 10000 will be the key resistance
on the upside. Bank Nifty also finds strong support around 23750 while
24100 will act as initial resistance on
the upside.
Trading Ideas (Time period: 1-3 days)
Hindalco (Buy Above 210 with Stop Loss at 205 for Target of 220): After consolidating for over few weeks the stock has finally broken out from an inverse Head and Shoulder
pattern on the daily chart. Our weekly chart analysis also suggests that Hindalco is on the verge of breaking out from a rising channel pattern . We expect the current momentum will extend towards its potential target of Rs 220 in short term.
Derivative strategies (Time period: Till expiry)
Buy Ambuja July Future @265-267, Stop Loss 259.5 and Target 270.5-271.5.
Derivative Snippets
In
the last trading session, Nifty and Bank Nifty index closed above
9900/24000 level for the first time ever. Nifty ATM/ITM call option
strikers continued to see unwinding of open interest as the short gamma
traders ran for cover. Nifty 9900PE added fresh short positions to the
tune of ~10 lakh shares as the index marched towards the record 10000
mark. Bank Nifty 24000CE continued to add fresh long position as the
underlying moved higher.
FIIs were net buyers in cash market segment to the tune of Rs 329 Cr.
Call Success and Update
Reliance Industries Limited - Call Success & Update
Reco Price: Rs 1420, Target: Rs 1540, Revised Target: Rs 1720
We had recommended a buy on Reliance Industries Limited in
an Idea 2 Act note released on September 20, 2016 for a target price of
Rs 1280 and extended our target price to Rs 1540 in a call update
released on April 07, 2017. The stock has touched a high of Rs 1559.6 in
yesterday’s trading session yielding returns of 8.4% from previous
update and 40.4% from our
original recommendation. We continue to remain bullish and advise
investors to hold for an extended price target of Rs 1720 in the coming
3-6 months translating into 11.6% upside.
Corporate Snippets:
Gujarat High Court dismissed a plea by Essar Steel against the Reserve Bank of India. (ET)
ONGC
need not pay a premium for government stake in Hindustan Petroleum
(HPCL) since the latter is widely traded and fairy valued by the market
and the transaction would involve no change in state control over the
two companies, a senior executive at ONGC said. (TOI)
Jubilant FoodWorks said its President and CFO Sachin
Sharma has resigned. (ET)
Cipla sees sales growth picking up in Oct-Mar on post-GST recovery.
Automobile major Mahindra and
Mahindra is readying two new models by the next fiscal-end as
it looks to consolidate its position in the Indian passenger vehicle
segment. (ET)
TVS Motors
will pump in Rs 500 crore into operations this year, launch a
high-powered motorcycle and a scooter as well as develop a new
generation engine.
JSW Energy
has said the deal with regard to buying JSPL's 1,000 MW power plant in
Chhattisgarh is on track and is likely to close by June next year.
Bharat Petroleum
Corp has made its first
purchase of US oil, buying high sulphur crudes Mars and Poseidon in a
tender, its head of refineries R. Ramachandran has said. (HBL)
Siemens to install state-of-the-art IGBT technology for Indian Railways.
Economy Front Page:
The world's biggest oil refinery -cum-petrochemical complex planned in Ratnagiri
district of Maharashtra will cost Rs 2.7 lakh crore and take 60 months to build, Oil Minister Dharmendra Pradhan said. (ET)
The
Delhi state consumer commission has directed a real estate firm to pay
Rs3 lakh as compensation to a homebuyer for delay in handing over the
possession of a flat.
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