Today's Action in the Market (June 18, 2019)

12.00 PM UPDATE:

(Nifty 11695, Up 23 points):

Today's Action in the Market (June 18, 2019)

The benchmark indices are trading in green, lifted by gains in Infosys and bank stocks.

• The 11600 level still looks like a major support, a breach of which shall take the Nifty towards the 11483-11500 level.Traders should trade with proper strategy in such scenario.

• Most Asian stocks rose as investors await the Federal Reserve's policy-setting meeting due to start Tuesday.

• U.S. stocks closed higher on the back of strong gains in social media and entertainment shares such as Facebook Inc. and Netflix Inc.

• The Indian rupee is trading higher at 69.87 per dollar versus previous close 69.90.

• The US Federal Reserve begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year.

• Barring FMCG rest all the indices are in green, with most gain visible in Media stocks.

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

• NSE Advances: 33. NSE declines: 17.

• The NSE Mid-Cap index is Up 0.58% at 4,819. The NSE Small-Cap index is Up 0.43% at 6,225.

• INDIA VIX index representing volatility is Down 14.55: (-0.64 %)

• On the Positive side: ZEEL at 348.25 (+2.75%), INDUSINDBK at 1438.35 (+2.76%) and ICICI BANK at 423.10 (+2.15%), are in green,

• On the flip side: IBULHSGFIN at 628.45 (-4.01%), HINDALCO At 190.30 (-1.70%) & INFRATEL at 267.90 (-1.56%).

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9 AM UPDATE:

DOW FUTURES (+11, 26143)

NASDAQ FUTURES (+10, 7547)

SGX NIFTY (+18, 11716)

NIKKEI (-56, 21068)

HANG SENG (+248, 27475)

SHANGHAI (+7, 2895)

The key themes of the day

• The Southwest Monsoon is expected to advance further up north as Cyclone Vayu loses intensity—paving the way for the wind system to move towards the Arabian Sea, India Meteorological Department said in its weather forecast on Sunday. By now, monsoon should have reached the central India, including parts of Madhya Pradesh, Rajasthan, eastern Uttar Pradesh and Gujarat, but it is yet to reach Maharashtra.

•FIIs sold shares worth Rs. 331.27 crores in Monday's trade.

STOCKS TO WATCH:

•BULLISH STOCKS: APOLLO HOSPITALS, NAVIN FLOURO, FEDERAL BANK, NAUKRI, RITES, BAJAJ HOLDINGS, AMRUTANJAN, GUJRAT FLUROCARBON, DR LAL PATH LABS.

•BEARISH STOCKS: AMARA RAJA BATTERY, AMBUJA CEMENTS, BALKRISHNA INDUSTRIES, BHEL, DR REDDYS LAB, EICHER MOTORS, HINDUSTAN UNILEVER, PVR, RELIANCE CAPITAL, RELIANCE INFRA, TATA MOTORS, MARUTI, PNB, SUN PHARMA.

All about stocks (F&O Trades):

•EICHER MOTORS (CMP 19728): Sell at CMP. Targets 19520/18205. Stop 20365.

•PEL (CMP 2002): Sell between 2021-2045 zone. Targets 1905/1793. Stop 2141.

•UNION BANK(CMP 72.45): Sell between 73-75 zone. Targets 69/61. Stop 78.05.

All about stocks (Cash Trades):

•NAVIN FLOURO (CMP 745): Buy between 717-731 zone. Targets 781/805/881. Stop 655.

•GRSE (GARDEN REACH SHIPBUILDERS) (CMP 118): Buy at CMP. Targets 131/151. Stop 97.

•DR LAL PATH LABS (CMP 1093): Buy at CMP. Targets 1111/1281. Stop 993.

SHOW ME THE MONEY:

•Option Trade: BUY NIFTY 20th JUNE PE Strike Price 11700 at CMP 22.85. Profit: Unlimited. Maximum Loss: Rs. 1,713.75. Stop: Exit Put option if Nifty moves above 11951. (Nifty June Futures CMP 11838.05).

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

Sell on strength

•Preferred trade on Nifty (11823): Sell on strength between 11851-11875 zone. Targets 11769/1721/11683 zone. Stop 11939.

•Preferred trade on Bank Nifty (30613): Sell on strength between 30751-30851 zone. Targets 30453/30051/29707. Stop 31411

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8 AM UPDATE:

Market Summary:

• Nifty June Futures ended Monday's session at a premium of +25 vs premium of +15.

• The 20th June expiry Put- Call Open Interest Ratio was at 0.39 for Nifty whereas it was 0.46 for Bank Nifty.

• The 20th June expiry Put-Call Volume Ratio was at 0.81 for the Nifty and 0.91 for Bank Nifty.

• For Nifty, Maximum Call Open Interest (OI) stands at 11900 Strike Price, followed by 12000 Strike Price for 20th June Series. Short buildup was seen at strikes price 11600-11900.

• Maximum Put Open Interest (OI) was seen at strike price 11700 followed by 11600 strike price for 20th June series. Long buildup was seen at strike prices 11400-11700.

• For Bank Nifty, Maximum Call Open Interest (OI) stands at 31000 Strike Price and Maximum Put Open Interest stands at 30000 Strike Price.

• As per Monday’s Provisional Data available on the NSE, FII’s sold shares worth Rs. 331.27 crores in the Indian Equity Market. DIIs on the other hand, bought shares worth Rs. 1257.86 crores in the Indian Equity market.

• Long Buildup: DIVIS LABS, HEXAWARE.

• Short Buildup: SRTRANSFIN, JSWSTEEL, DLF, L&TFH, HDFC BANK.

• Short Covering: CEAT, TATACOMM.

• Long Unwinding: ICICI BANK, TATASTEEL, REC, UJJIVAN.

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7 AM GLOBAL UPDATE:

Well, something to cheer about this Tuesday morning is that yesterday's swift and steep drop is seen flipping to small gains. This optimism is on backdrop of slight positive global cues.

DOW (+23, 26113)

NASDAQ (+48, 7845)

SGX NIFTY (+19, 11717)

NIKKEI (-5, 21119)

HANG SENG (+32, 27259)

BOVESPA (-416, 97623)

OIL (-0.12, $51.80)

GOLD (+1, $1344)

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

Global: Neutral.

FII: Negative.

DII: Positive.

F&O: Neutral.

‪Sentiment: Neutral.

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 11,672.

Nifty’s SUPPORT:

Intraday: 11627/11605.

Medium Term: 11,487/11351.

Long Term: 10,901.

Nifty’s RESISTANCE:

Intraday: 11789/11929.

Medium Term: 12107.

Long Term: 12,501.

Nifty’s RANGE:

Intraday: 11,627-11,767.

Medium Term: 11,487-12,201.

Long Term: 10,901-13,001.

Nifty’s OUTLOOK

Intraday: Neutral.

Medium Term: Neutral.

Long Term: Positive.

Our call of the day suggests benchmark Nifty will be unable to defend any strong intraday comeback. Selling on strength should be the preferred strategy for the day.

Our chart of the day short positions in stocks like EICHER MOTORS, UPL, PEL and DR REDYS LAB with inter-week perspective.

IMPORTANT THEMES FOR THE DAY:

The big question: Will Nifty stage a remarkable rebound in today's trade?

Honestly speaking, a slight rebound quite likely amidst bargain hunting, but our call of the day suggests that bulls at Dalal Street will be unable to defend any strong intraday comeback on benchmark Nifty.

Digging deeper, the two key make-or-break catalysts are:

1. Federal Reserves' interest rate decision to trickle in on June 18-19.

2. And then, much media attention is likely to focus on U.S. President Donald Trump and Chinese President Xi Jinping and their efforts to end a trade war in this month’s G20 summit in Osaka on June 28 and 29

Well, well well...Well, if the market does not gets what it wants— then simply watch out — it will be bear, bears and bears everywhere!

Meanwhile, weighing on sentiments in today's trade will be negative catalysts like:

• Fitch Cuts India Growth Forecast To 6.6% For 2019-20 from 6.8 per cent projected earlier,

• India announcing retaliatory tariffs on American goods

• FIIs selling shares worth Rs. 331.27 crores in yesterday's trade.

• There is relatively narrow breadth at Dalal Street in terms of leadership.

• Fears of default by large debtors seen gripping the markets as rumors about imminent default by some large NBFCs and real estate players are spreading fast. Events at Jet Airways and yes Bank are simply adding fuel to panic.

• Rainfall Deficiency Hits 43%, Monsoon To Pick Up in Next 2-3 Days.

• Political tensions in the Middle East

So amidst this negative catalysts, there's a negative mood in the markets right now. The technical landscape is also seen deteriorating. Nifty's intraday support now seen at 1605 while hurdles are at 11929 mark. Selling on strength should be the preferred strategy.

Our sense is that only a dovish tone from the Federal Reserve or progress of U.S-China trade negotiations could jump start the market's sentiment.

Meanwhile, On domestic front, on investors' radar will be

• the progress of monsoon.

• The street will also spy with one big eye on the minutes of the Reserve Bank of India Monetary Policy Committee (MPC's) meeting which will be published on 20 June 2019.

• The Union Budget to be presented by Finance Minister Sitharaman on 5 July.

Outlook for Tuesday: Range-bound session likely.

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