Markets Update: January 22, 2019 – Today’s action in the Markets

FPJ Web DeskUpdated: Wednesday, May 29, 2019, 03:11 AM IST
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16:00 Hrs: Latest After the Closing Bell

Nifty (-44, 10917): An uninspiring session was witnessed at Dalal Street in Today’s trade. The benchmark Nifty joined the conga line of falling global equities on backdrop of global growth concerns and as trade worries festered.

Citing that weak data, President Donald Trump tweeted late Monday that China needs to “finally do a Real Deal and stop playing around,” when it comes to trade. Meanwhile, China’s president has convened meeting of officials to discuss growth.

The negative takeaway from today’s trade was that the market breadth was weak. The NSE Mid-Cap index fell 0.26%. The NSE Small-Cap index fell 0.22%. PSU Banks came under pressure after Union Bank of India third-quarter profit missed street’s estimates.

Now technically speaking, and judging by today’s price action at Dalal Street, the benchmark Nifty now needs to close above 11000 mark to fuel further optimism. The must watch support for Nifty from here on is at 10839 mark. Below Nifty 10839, expect waterfall of selling with targets at 10733 and then at 10581 mark.

Now before we sign off for the day, let’s look at major instruments.

4.00 PM GLOBAL UPDATE:

DOW Futures (-137, 24550)
NASDAQ Futures (-52, 6741)
DAX (-13, 11123)
FTSE (-29, 6941)

OIL (-0.73, $53.07)
GOLD (+1, $1283)
DOLLAR INDEX (+0.03, 96.36)
COPPER (-55, 6004)

How Asia fared today:

HANG SENG (-191, 27006)
NIKKEI (-96, 20622)
SHANGHAI (-31, 2579)

Nifty (-39, 10923)
Sensex (-134, 36445)
Bank Nifty (-0.36%, 27482)
SGX NIFTY (-0, 10930)
USD/INR (+0.12, 71.40)

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15:00 Hrs: Where’s the clever money going at 3 PM?

Nifty (-69, 10892): Aggressive long overnight positions not advisable as Dow futures are indicating nearly 200 points drop on backdrop of global growth concerns and as trade worries fester. The market breadth, indicating the overall health of the market is also weak.

Citing that weak data, President Donald Trump tweeted late Monday that China needs to “finally do a Real Deal and stop playing around,” when it comes to trade. Meanwhile, China’s president has convened meeting of officials to discuss growth.

Probable BTST/STBT trades:

Bullish looking BTST stocks: MINDTREE, BAJAJ FINANCE, TITAN.

Negative looking STBT stocks: VEDANTA, JSW STEEL.

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12:30 Hrs: Pursue opportunities in commodities

Gold & Silver seen under pressure.

Gold (-6, 1277). Corrective declines quite likely amidst overbought conditions.
MCX Gold (-0.11%, 32052). Hurdles at 32751. Corrective declines likely towards 31751.

Silver (-0.192, 15.207). Range bound movement quite likely. Hurdles at 16.05 mark.
MCX Silver (-0.15%, 38866) Supports at 38751 and then at 37901. Hurdles 39751.

Crude Oil (-0.34, 53.70). Positive bias. Hurdles at 57.50 mark. Buy on declines.
MCX Crude Oil (-0.83%, 3839). Eyes psychological 4000 mark.

Copper (-0.006, 2.669). Sluggish global growth to act as negative catalyst.
MCX Copper (-0.05%, 422.35). Selling on strength should be the preferred strategy. Hurdles at 436.

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12:00 Hrs Update: Top Stories at Mid Day

(Nifty 10893, Down 68 points):

• Dalal Street is trading sharply lower after the International Monetary Fund trimmed its global outlook for 2019 and 2020. The downgrade came just after China said its economy grew at the slowest pace in 30 years in the last quarter of 2018.

• Interestingly, IMF said India’s economy is poised to pick up this year. IMF’s World Economic Outlook Update, released yesterday by its chief economist Gita Gopinath in Davos, projected that India will grow at 7.5% this year and 7.7% in 2020, an impressive over one percentage point ahead of China’s estimated growth of 6.2% in these two years.

The IMF attributed the pick up to lower oil prices and a slower pace of monetary tightening. IMF said India would remain one of the fastest growing major economies of the world.

• Among sectoral indices, barring PHARMA all the other indices are in red, with maximum pain visible among METAL, AUTO and PSU BANK sector.

• The market breadth, indicating the overall health of the market is negative.

• NSE Advances 14. NSE declines 36.

• The NSE Mid-Cap index is down 1.05% at 4,777. The NSE Small-Cap index is down 0.80% at 6,261.

• In F&O space, SUNPHARMA and KOTAK BANK are in green, up 4.81% & 2.04% respectively, while on flip side JSW STEEL & VEDL are down 3.11% & 3.02% respectively.

• Sun Pharma jumps 4.81% on series of clarifications.

• Shares of Prabhat Dairy hit 20 per cent upside at Rs 112 after the company announced that global dairy major Lactalis will buy 98% of its milk business. However, the share has shed 13% of its gains by now.

• The rupee has weakened by 09 paise at 71.37 per dollar v/s its previous close of 71.28 against the US dollar.

Q3 results to trickle in: Asian Paints, TVS Motor Company, RS Software (India), Rane (Madras), Syngene International, Agro Tech Foods, Shree Cement, ICICI Prudential Life Insurance Company, Reliance Nippon Life Asset Management, Aurionpro Solutions, Kirloskar Industries, Alembic Pharmaceuticals, HDFC Standard Life Insurance Company, Oberoi Realty, Vinyl Chemicals (India), Cupid, Havells India, Bharat Gears, Banaras Beads, Visa Steel, Genus Power Infrastructures.

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10:00 Hrs Update: Nifty’s Crucial Levels

Nifty’s (-52, 10909).

Nifty trades with negative bias catching up with pessimism at global stock markets. Market breadth is seen deteriorating considerably.

Nifty hurdles will be at psychological 11,000 mark. Supports at 10891.

What Technical Tells Us On Nifty:

Nifty’s KEY SUPPORTS: 10891/10875.
Nifty’s KEY HURDLE: 11001/11111.

Nifty’s INTRADAY RANGE: 10,875-10969.
Nifty’s OUTLOOK FOR THE DAY: Caution warranted.

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09:30 Hrs Update: Make Informed Decisions

(Nifty: 10921, Down 41 points):

Amidst negative global cues, the benchmark Nifty starts gap-down. You could blame the negativity to weak China GDP numbers. Stocks are again seen trading lackluster and with negative bias.

Nifty’s hurdles are now at 10971 and then at 11001 zone. The biggest intraday support for Nifty in near term is at 10871.

Amongst stocks on positive side are: SUNPHARMA (+3.50%, 412.20) KOTAKBANK (+1.94%, 1292.20) WIPRO (+1.07%, 341.4)

On the negative side are YESBANK (-1.33%, 189.40) HINDALCO (-1.30%, 204.95) INDUSINDBK (-1.18%, 1489.80).

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09:00 Hrs Update: What Caught our Eye at 9 AM?

Selling intensifies!!

DOW FUTURES (-155, 24532)
NASDAQ FUTURES (-50, 6743)
SGX NIFTY (-22, 10941)
NIKKEI (-13, 20707)
HANG SENG (-192, 27004)
SHANGHAI (-17, 2594).

STOCKS TO WATCH:

Bullish stocks: BAJAJ FINANCE, IGL, NIIT TECH, COLPAL, TITAN, DIVIS LAB.

Bearish stocks: RELIANCE CAPITAL, CG POWER, REC, PFC, INDIGO, SIEMENS, BOB, BOI, OBC, IRB, UBI, MARUTI, DR REDDYS LAB, NMDC, SAIL.

SHOW ME THE MONEY: SELL NMDC (CMP: 90.70). NMDC ended on a negative note in yesterday’s trade, down 0.50%. Key intraday hurdles seen at 92.50. Interweek Strategy: Sell between 91-92.50 zone, targeting 88.50 and then at 82.50-83 zone. Stop 95.45.

Q3 RESULTS TO TRICKLE IN:

22-Jan: Asian Paints, TVS Motor Company, RS Software (India), Rane (Madras), Syngene International, Agro Tech Foods, Shree Cement, ICICI Prudential Life Insurance Company, Reliance Nippon Life Asset Management, Aurionpro Solutions, Kirloskar Industries, Alembic Pharmaceuticals, HDFC Standard Life Insurance Company, Oberoi Realty, Vinyl Chemicals (India), Cupid, Havells India, Bharat Gears, Banaras Beads, Visa Steel, Genus Power Infrastructures.

Bulls Vs. Bears: Time to Pick a Side!!

A muted session quite likely.

Preferred trade on Nifty (10961): Buy only on any sharp intraday declines between 10891-10901 zone, targeting 11001 and final aggressive targets at 11111 mark with stop at 10771.

Preferred trade on Bank Nifty (27534): Key intraday support at 27100. Confirmation of strength only above 27751. Buy above 27751, targeting 28001-28251 zone with stop at 27100.

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08:00 Hrs Update: Calculus Derivatives Corner

Market Summary:
• Nifty January Futures ended Monday’s session at a premium of +02 against +29.

• The Put- Call Open Interest Ratio was at 1.39 for Nifty whereas it was 1.25 for Bank Nifty.

• The Put-Call Volume Ratio was at 0.96 for the Nifty and 1.02 for Bank Nifty.

• For Nifty, Maximum Call Open Interest (OI) stands at 11000 Strike Price, followed by 11200 Strike Price for January Series. Short covering was seen at strike prices 10600-11000 for January Series.

• Maximum Put Open Interest (OI) was seen at strike price 10700 followed by 10500 strike price for January series. Short buildup was seen at strike prices 10800-11000 for January Series.

• For Bank Nifty, Maximum Call Open Interest (OI) stands at 26500 Strike Price and Maximum Put Open Interest stands at 26500 Strike Price.

• As per Monday’s Provisional Data available on the NSE, FII’s sold shares worth Rs. 299.79 crores in the Indian Equity Market. DIIs on the other hand, bought shares worth Rs. 520.80 crores in the Indian Equity market.

• Long Buildup: RELIANCE, LUPIN, RBL BANK, BIOCON, NIITTECH.

• Short Buildup: IDEA, SOUTH BANK, YES BANK, JAIN IRRIGATION, BANKINDIA.

• Short Covering: SUN PHARMA, MOTHERSON, GAIL, ESCORTS, TVS MOTOR.

• Long Unwinding: ITC, WIPRO, ADANI ENT.

• Stocks banned in F&O segment for today: ADANI POWER, JET AIRWAYS.

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07:00 Hrs Update: Know What Matters at Dalal Street

Global cues are muted this Tuesday morning as the dark cloud cover stalling optimism is China’s slowest economic growth since 1990. The 6.6% growth rate for 2018 reported is the slowest annual pace that China has recorded since 1990.

7 AM GLOBAL UPDATE:

DOW (-87, 24600)
NASDAQ (-27, 6766)
SGX NIFTY (+1, 10963)
NIKKEI (-11, 20709)
HANG SENG (-18, 27178)
BOVESPA (-87, 96009)

OIL (-0.07, $53.73)
GOLD (-3, $1279)

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

Global: Neutral.
FII: Negative.
DII: Positive.
F&O: Positive.
‪Sentiment: Cautious.

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,962.

Nifty’s SUPPORT:
Intraday: 10,897/10,871.
Medium Term: 10,601/10,333.
Long Term: 9,951.

Nifty’s RESISTANCE:
Intraday: 11,001/11111.
Medium Term: 11,111/11,751.
Long Term: 12,001.

Nifty’s RANGE:
Intraday: 10,921-11001.
Medium Term: 10,501-11,111.
Long Term: 9,951-11,701.

Nifty’s OUTLOOK
Intraday: Positive.
Medium Term: Neutral.
Long Term: Positive.

Our call of the day Our call of the day suggests Dalal Street’s moves in near term are likely to be more complex. We say so because there is relatively narrow breadth at Dalal Street in terms of leadership. The generals are leading the charge, but none of soldiers are seen following — implication of this could be that we may witness a hasty retreat.

Agreed that the technicals are aggressively bullish for benchmark Nifty, but market breadth is negative. In such scenario, we believe most of the momentum stocks that have caught a winter chill will start to perform only above Nifty 11,111 mark.

But for the day, the psychological 11000 mark will act as biggest resistance.

Our chart of the day suggests establishing buy positions in TITAN with interweek perspective. On negative side, aggressive traders could look to sell PNB, NMDC & LIC HOUSING FINANCE.

Q3 EARNINGS TO TRICKLE IN THIS WEEK:

• 22-Jan: Asian Paints, TVS Motor Company, RS Software (India), Rane (Madras), Syngene International, Agro Tech Foods, Shree Cement, ICICI Prudential Life Insurance Company, Reliance Nippon Life Asset Management, Aurionpro Solutions, Kirloskar Industries, Alembic Pharmaceuticals, HDFC Standard Life Insurance Company, Oberoi Realty, Vinyl Chemicals (India), Cupid, Havells India, Bharat Gears, Banaras Beads, Visa Steel, Genus Power Infrastructures.

• 23-Jan: Raymonds, Navin Fllouro, Sintex Plastics, BASF, CANFIN HOMES, PIDILITE, UJJIVAN, JM FINANCIAL, UNITED SPIRITS, ITC, RCOM, REL POWER, Interglobe Aviation,
• 24-Jan: COLPAL, BIOCON, Ultratech Cement, Yes Bank, NIIT, NELCO, Sterlite Technologies, Pfizer, VST Industries, Edelwise Financial Services, PVR, PNB Housing Finance, Quess, Wondrela Holidays.
• 25-Jan: Indian Bank, Maruti, LT, Gruh Finance, Maruti, IOB, GSFC, DHFL, NILKAMAL, M&M Financial,

IMPORTANT THEMES OF THE DAY:

Also denting optimism is the month-old partial U.S government shutdown. At the time of writing, the U.S stock futures were also seen trading with small losses on backdrop of the International Monetary Fund report which cut its outlook for global expansion citing trade issues.

Meanwhile, cementing an already downbeat mood are PSU Banks which came under pressure after Union Bank of India’s third-quarter profit missed street’s estimates. The other negative catalysts in the backdrop are:

1. Foreign investors pulling out more than Rs 4,300 crore from the Indian equity markets in January 2019 so far.
2. Sharp rebound in oil prices.
3. Weak performance by Indian Rupee compared to other currencies in Asia.
4. Expectations of expensive bailout for farmers before general elections.

Disclaimer: LotusFunds subscribers/clients may have positions in the stocks recommended in this note. Please note that the actual subscribers may receive additional information in real time not available to the viewers of this note.

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