CNI Publications; Weekly Plattern Weekly summary Vol -1, No-I, 26 Dec, 2014, 09 pages Editorial Nifty movement was on expected lines. The no rolls created hung market on the last day which resulted in VWAP selling in the last 30 minutes. This was obvious and patent reason for keeping the market flat as no operator and FII would build positions at higher prices. This is why even negative news were spread. Whenever this happens Nifty blasts. I expect Nifty to test 8888 in JAN 2015. It is almost as if one were watching a tennis match. The ball being hit from one end to the other. The bulls and bears are fighting it out in the middle. No one willing to give up even an inch. What the New Year portends could be anybody's guess but I would put my money on the bulls. Reasons for this bullishness have been discussed in the past but would once again enumerate...memory people say is fallible, hence the necessity to repeat. Change of the week 26-Dec-14 Rise /Gain Sensex 27241 130 Nifty 8200 25 FII DII 22-Dec-14 (289.9) 389.1 23-Dec-14 (406.1) 516.3 24-Dec-14 (1578.6) 509.0 26-Dec-14 39.9 417.2 (2234.7) 1831.6 Total We are going from a high inflation high interest scenario into a low inflation and falling rate one. Prices of commodities and oil have fallen which would have very beneficial effects on India's growth and GDP. India's exports constitute roughly 15% of GDP which largely consists of services and unlike other countries commodities form a negligible part of exports(India incidentally is a net importer of commodities). Turnover (` Cr) FII DII Combined 26-Dec-14 25,455.6 12,885.1 38,340.7 26-Dec-14 Advances 738 As USA's tightening cycle begins China, Europe Japan are likely to ease their monetary policy. global liquidity may not be as affected as feared. The govt of India is bent on ushering reforms. latest ordinance on insurance, coal and defence case in point. Declines 708 Ratio 1.04 and The The is a The PM has taken upon himself to monitor stalled projects worth USD 300 bn. The seriousness of his call for India's growth is unquestionable. Cni Research Limited www.cniglobalbiz.com 1 A plethora of reforms in the run up to the budget is expected. This budget is expected to be a watershed budget and is likely to stun the naysayers. With GDP growing corporate profits are likely to go up, substantially. A huge re rating on the cards. India may well emerge, once again, as a have to be in location...and a favored destination. Make the most of this phase as Baar, baar aate nahi aise mauke dil ko lubhaney...dekh mauka Jaye na nikal!!! Riding on a turbo charged 8 cylinder sleigh. Yes he can now afford it what with the price of crude being what it is it. I wonder if he can manage it next year as the price may not be what it is today. As the price falls some wells will have to be shut as they will become uneconomical and as this happens repeatedly supply glut will cease and prices will start to move northwards. The Santa in US would also be happy..a whopping 5% growth in a quarter. Coming fast on India's heels. No wonder other currencies are reeling against this onslaught. The USD is expected to move higher as other countries are still unable to shake off the slumber of very low growth and deflation. Whether this augurs well for Indian equities is a question. Generally with a strong dollar commodities often take a back seat. This is very good for India as unlike others it imports a lot of its requirements. Also the expected growth of the Indian economy and falling interest rates will help in keeping the USD benign. Latin American countries are facing problems,Russia is struggling and China is trying hard to avoid a hard landing. All these will play a major role in determining market movements in the next year. reforms. These may turbo charge an already picking up economy. 5 Top Gainer Stock 26-Dec-14 22-Dec-14 % Gain BF UTILITY 658.7 520.9 26.4 GUJ.GAS 786.8 647.0 21.6 FRL 101.5 86.2 17.8 IND.CEM 83.4 74.4 12.0 INDRA GAS 465.4 422.2 10.2 5 Top Losers Stock 26-Dec-14 22-Dec-14 RASOYA.PRO 1.4 1.8 17.6 PMCFIN 96.6 105.3 8.3 KAILASH AUTO 8.2 8.8 7.5 SCI 58.6 63.3 7.4 AMTEK AUTO 167.5 177.9 5.8 Top 5 Picks By CNI 'A' Group Company CAIRN SBI TATA STEEL RCOM REL Top 5 Picks By CNI 'B' Group Company In the immediate term no wagers on today's expiry..can swing either ways. Rolls are happening indicating strength and wouldn't be surprised if this pause is used as a platform to launch the market into a new orbit. Santa is normally expected to give gifts hope the PM decides to do a Santa and shower gift a in the form of much talked about and required Cni Research Limited % Loss www.cniglobalbiz.com CMI GLOBAL OFFSHORE RASI ELECTRODES BASANT AGROTECH ZENSAR TECH 2 Nifty range could be 8200 to 8300 for expiry as operators changed bets yesterday. But for sure Nifty is heading for 8888 in JAN. Santa gift will be delivered on 26th Jan 2015. GLOBAL OFFSHORE could be smart pick for 2015. It has nothing to do with OIL fall as supply platform has no linking with OIL but is compulsory for oil as well as gas exploration. The demand for the vessels may go down but for sure not below the demand levels. Current demand is 200 vessels per year whereas supply is less than 60 vessels hence even if 30% demand goes down there is no case of demand falling below 100 in any case. As reported by Zee Business the open offer at Rs 900 to 1000 should come in mid JAN which gives 50% upside from the current levels. As per info the open offer should come at Rs 1420 not 900 to 1000 but respect media views. This is not a review of the latest blockbuster film. But the title is only to catch your eyeballs(sorry about that). Many connotations can be assigned to this title. If taken in Hindi it means after having drunk...in a derogatory sense it means after having imbibed a few under the belt..consumed alcohol. That goes with the weather and the Yuletide spirit. Another meaning could be kitno ka khoon peekay bazar is at this level. Both bulls and bears have lost blood on this climb from sub 5000 levels on the Nifty. Off late though the bears are on the run trying to reorganize and to prevent the market from sucking more blood. Yet another could be an exclamation either when a pessimist says Nifty can go back to 7200 or when a bull says 10000 on the cards. The normal response is Peekay bolta hai ! The reason for my meandering today is...maybe even tomorrow,the expiry day for December series,all bets are off as anything can happen and no one would be the wiser. One can wager a bet and still cannot say with any degree of confidence or offer higher odds in favor or against the outcome. This because the exchanges still follow cash settlement rather than physical settlement of securities. So on D-day the tables can get reversed on the last half hour. Such is life. A few points I want to get to your notice.... The govt is most likely to use the Ordinance route to clear a plethora of important and crucial bills. Many announcements which will put India in a favorable light are expected ,soon. Q4 results could be better than expected and the falling oil and commodity prices,the popularity of the PM with business(pro business image) and the falling inflation and hence lower interest rate expectations will continue to drive fii money into India. Only any drastic or catastrophic move by the govt can lead to an exodus (I don't see that happening). Take advantage of any fall,add to your positions and the best way to forget any unwanted advice is peetey rehna, peekay jeena......Merry Christmas. Results though not expected I do not think this is bad enough to kill the market sentiments. Nifty may be range bound from 8200 to 8500 in the expiry. New range in Jan on fresh inflow. For me 8888 is seems coming soon. Nifty has come all the way from 8000 to 8350 and those who were drawing calls of 7800 7200 where are they now...? Expiry is just 3 days away. Nifty has sharply moved up after a precipitous fall,FIIs have been sellers and rolls into the next series are not as per average. Oil has moved up(thankfully for some)and the global markets have just digested the Fed information that the dreaded interest rate increase is still some time away. All these put together are classic ingredients for volatility to rule the roost. Also make for contents to serve a cocktail of the Molotov type(petrol bombs). Yes the situation is explosive and the yoyo like movements of the market will show how the going can get rough. Cni Research Limited www.cniglobalbiz.com 3 A lot of PMs would have calculated their bonuses and headed for holidays(no such luck for the undersigned..no holidays and also no bonus to add salt to the wounds)leaving the mere mortals to combat the opposing forces(read bulls and bears)and try and make sense of the whole imbroglio. Pointless to waste time on such trivia(brave and bold statement,what)...if the opportunity arises I.e. were the market to fall make best use of this by buying into it remember God helps those who help themselves. This bold act will help you to sing carols to usher in Christmas and then await the New Year by singing "aa chal me tujhe main leke chaloon ek aisey gagan ke taley"... Rolls have just started and if rolls do not catch momentum at higher prices then Nifty may correct a little bit today. Even the exit poll on J and K have confused many in the street. Some says even 30 seats for BJP in noncore state is good one for market whereas few hold that JK will still go in BJP pocket. Exit polls did 210 to 230 max in central election whereas BJP got 310 huge beat to the exit poll. I feel exit poll may go wrong even this time. The projected Congress and N C could be a disaster and will go all the way to BJP to change the tally to 44. Tomorrow market might rally 200 points Nifty if J and K BJP tally cross 44 as many traders are short assuming that may not get even 27. Allocation is huge plus and now we are very close to end of the year hence from Friday we can see heavy buying ( F R ) ahead of FII return. London Reuters carried a story suggesting RUSSIA will be out of BRICS and if that happens India weightage in MSCI will be doubled. Our calculations suggest it could be 20 to 28 bn usd fresh inflow for INDIA. Cni Research Limited www.cniglobalbiz.com 4 Next Week’s Events GLOBAL STORY Monday, 29-Dec-2014 4-Week Bill Announcement 3-Month Bill Auction Tuesday,30-Dec-2014 Consumer Confidence S&P Case-Shiller HPI The unexpected happens in the stock market. This is simply for us not for the market makers. For market makers only the expected happens because they are blessed with money power and system favour. They are in a position to assess every day based on the call and put positions which help them to call for closing no. In fact CNI team try to read the F O data according to which the game are set and proved right in the last leg of expiry. Yet to be 100% precise is impossible. At 8000 we felt that Nifty will bounce to 8450 but it halted at 8380. Operators changed their base from 8500 to 8400. On the second last day again the base was changed to 8300 which was a clear signal of testing lower base of 8200. It broke. Wednesday,31-Dec-2014 Jobless Claim Pending Home Sales Thursday,01-Jan-2014 All Market Closed Friday, 02-Jan-2014 PMI Manufacturing Index Construction Spending This created a feel among traders that now Nifty is heading for 7700 all the way and they squared off everything. On the first day again after opening gap up market gave up and traded in negative zone most of the time which help traders built huge shorts. Market makers were though laughing on the trades kept on building long positions. This was again obvious and patent as no market maker will give premium to build positions. Had that be the intention then we could never see last 30 minutes sell off through VWAP in the expiry. Having explained what happened it will be prudent to know what is in store. The loss of J K keeps R S still away from BJP control leaving them no choice to fall back on ORDINACNES for getting bills passed. For market the impact is huge. Reforms process speeding up is good sign for GDP recovery. It will be a welcome sign for FII. Apart from reforms there could be EXIT of RUSSIA from brics. This will raise INDIA MSCI weightage to a great extent. Cni Research Limited www.cniglobalbiz.com 5 In any case after the fall of Brazil and China as favoured destination India allocation will be definitely high. Before OBAMA comes to INDIA a plate of bilateral treaties will be ready to sign which will take forward INDO US relationship which matters most for FII investors. The flow therefore has to rise. On earning front we expect 200 bips rate cutting once first rate will be cut. Why the delay...? We believe that the delay in rate cut is a calculated and well thought move by RBI. At present the flow of USD is matched by RE selling by RBI. The $ which were bought by RBI were sold the Banks and at the same time bought in the forward market hence RE was not allowed to rise. Before RBI cuts rate they will have to reverse their forward positions and then sell $ aggressively which clears the way of RE rally. We believe RE can settle at 55 levels by next Dec 2015. What we know probably all FII know and hence they are using the current RE positions to bring in more USD in INDIA through investment and that should happen in JAN and FEB. This is the precise reason all big stalwarts in INDIA are talking about the big rally in JAN and FEB which will take Nifty past 9000. Traders do not understand this and hence seeing the technical support and resistances try to create positions. They are short now and we have no second thought in our mind that market may just blast. Thus the rate cut will start from FEB and will continue till 2016 and we expect 200 bips rate cutting which will take GDP past 7 and 7.5% AND trust us all those who are tired at the moment will try to ride the TIGER then. Please do not forget riding tiger is not an easy job because you always have a threat that if you come down TIGER may target you. Somewhere we read RUETERS report that OIL is heading for 20 USD. We challenge such reports and believe that these are baseless. The opinion in this report was vested and these guys were short in OIL at 98 USD. Now they are showing you 20 USD target and they are covering their short positions at 60 USD. In our opinion USD will settle at 70 to 80. These very experts were long in OIL at 110 and were expecting 170 which never happened. Hence there is point is relying on such baseless reports. In any case we always suggest do not trade in a commodity where you can't understand the basis of speculation. You never come to know the statistics of global oil production, global supply and the derivative data of oil in the international market. When we have all the data in front of us with regard to Indian derivatives of stock market yet we go wrong then were is a question of going right in case of commodities which is not in control of any one. If an allocation has to rise then only large cap will rally hence you need to keep watch on large cap stocks. We still believe that a bank stock has enough upside till rate is not cut. Bank Nifty may double in next 3 years. Cni Research Limited www.cniglobalbiz.com 6 Global Indices Country Indices Date Index Net Change Change Hong Kong Hang Seng 26/12 23,349.34 +15.65 +0.07 Singapore Straits Times 26/12 3,353.68 +7.77 +0.23 South Korea Seoul Composite 26/12 4,806.86 +33.39 +0.70 United States NASDAQ 26/12 18,053.71 +23.50 +0.13 United States DJIA 26/12 2,088.77 +6.89 +0.33 United States S&P 500 26/12 17,818.96 +10.21 +0.06 Japan Nikkei 225 26/12 6,609.93 +11.75 +0.18 United Kingdom FTSE 100 26/12 1,764.44 +14.70 +0.84 Malaysia KLSE Composite 26/12 5,166.98 +27.92 +0.54 Indonesia Jakarta Composite 26/12 1,510.41 +5.52 +0.37 Thailand SET 26/12 4,295.85 -19.12 -0.44 France CAC 40 26/12 9,922.11 +56.35 +0.57 Germany DAX 26/12 8,373.74 +219.73 +2.69 Argentina MerVal 26/12 50,144.63 -745.18 -1.46 Brazil Bovespa 26/12 43,002.17 -0.70 0.00 Mexico IPC 26/12 2,172.19 +18.59 +0.86 Austria ATX 26/12 3,306.81 -12.90 -0.39 Belgium BEL-20 26/12 425.57 -1.20 -0.28 Netherlands AEX General 26/12 1,063.16 +0.31 +0.03 Spain Madrid General 26/12 9,021.67 -11.78 -0.13 Switzerland Swiss Market 26/12 5,369.50 +13.09 +0.24 Australia All Ordinaries 26/12 3,157.60 +85.07 +2.77 China Shanghai Composite 26/12 7,186.32 +47.05 +0.66 Philippines PSE Composite 26/12 7,309.03 +45.78 +0.63 Sri Lanka All Share 26/12 9,214.07 +55.37 +0.60 Taiwan Taiwan Weighted 26/12 1,292.84 +0.62 +0.05 East Egypt CMA 26/12 1,948.16 +1.55 +0.08 Cni Research Limited www.cniglobalbiz.com 7 Bulk deal Company Name Date BSE Code Client Name Deal Type Quantity Price (Rs) BRAKAUT 26-Dec-14 520115 SRIMANNARAYANAMURTI B 135000 1.19 BRAKAUT 26-Dec-14 520115 GIRIDHAR GOPAL PULLE S 135000 1.19 CHMBBRW 26-Dec-14 512301 CHOUTH MAL S 80000 7.5 CHMBBRW 26-Dec-14 512301 ARCH CAPITAL ADVISOR B 100000 7.5 DHABRIYA 26-Dec-14 538715 HEM CHAND JAIN S 48000 24.15 DHABRIYA 26-Dec-14 538715 ANIL BHANDARI B 48000 24.15 EPCIN 26-Dec-14 523754 INDIANIVESH SECURITI S 173000 146.75 EPCIN 26-Dec-14 523754 SNEHLATA RAJESH NUWA B 173000 146.75 ICVLSTEELS 26-Dec-14 534733 HONEY NIHIR SHAH B 533330 7.18 ICVLSTEELS 26-Dec-14 534733 MURARILAL BISHESHWAR S 533330 7.18 Cera Sanitaryware Limit 24-Dec-14 CERA MASSACHUSETTS INSTIT S 87750 1705 Class B shares (Series 24-Dec-14 FRLDVR SNEHLATA NUWAL B 150000 47.35 Class B shares (Series 24-Dec-14 FRLDVR BALASHRI COMMERCIAL S 152935 47.36 Hathway Cable & Datacom 24-Dec-14 HATHWAY ABG CAPITAL B 1499602 348 Hathway Cable & Datacom 24-Dec-14 HATHWAY MASSACHUSETTS INSTIT S 1499602 348 Page Industries Limited 24-Dec-14 PAGEIND ABG CAPITAL B 195889 12120 Page Industries Limited 24-Dec-14 PAGEIND MASSACHUSETTS INSTIT S 195889 12120 PTC India Limited 24-Dec-14 PTC MARFATIA NISHIL SURE B 1529843 90.85 PTC India Limited 24-Dec-14 PTC MARFATIA NISHIL SURE S 1529843 90.81 Shriram City Union Fina 24-Dec-14 SHRIRAMCIT ABG CAPITAL B 837307 1786 ntellect Design Ar 23-Dec-14 INTELLECT WOODLAND RETAILS PRI B 950000 72.37 Intellect Design Ar 23-Dec-14 INTELLECT FRANKLIN MUTUAL SERI S 5353733 74.63 Intellect Design Ar 23-Dec-14 INTELLECT ORBITECH LIMITED S 11260180 72.29 Southern Ispat Ltd 23-Dec-14 SOUISPAT SHREE GANESH TRADERS S 12704736 0.15 TVS Srichakra Limit 23-Dec-14 TVSSRICHAK SUNDARAM TRUST S 50000 1615 Crompton Greaves Ltd 22-Dec-14 CROMPGREAV AVANTHA HOLDINGS LIM B 4314712 185 Crompton Greaves Ltd 22-Dec-14 CROMPGREAV LUSTRE INTERNATIONAL S 4314712 185 Intellect Design Are 22-Dec-14 INTELLECT ARKSUN SYSTEMS SOLUT B 500000 80.1 Cni Research Limited www.cniglobalbiz.com 8 Call put option Option Month - PUT Strike Price Volume January - 7500.00 CALL Best Sell 7.35 LTP OI 1664250 Best Buy 7.25 Volume 1296375 Change OI(%) 47.66 Best Sell 765.85 LTP OI 48575 Best Buy 762.05 763 270975 Change OI(%) 3.13 7.25 January - 7550.00 2175 8 11 9 475 1800 0 539.55 860.45 995 9150 0 January - 7600.00 1548500 10.9 11.15 11.15 1433050 19.31 16200 664.15 671.85 669.85 176300 0.3 January - 7650.00 300 13 17.2 14 350 366.67 0 448.75 764.55 935.85 9500 0 January - 7700.00 2010325 16.1 16.3 16.1 1603050 22.55 9475 571.3 579 573.15 97825 2.89 January - 7750.00 4900 18 20.9 20.25 2450 157.89 0 359.7 642 0 0 0 January - 7800.00 2962925 24.5 24.8 24.8 2541825 7.56 24975 483 493.05 484.9 126325 10.11 January - 7850.00 7425 27.15 37.75 32 4925 19600 0 272.85 568.7 660 100 0 January - 7900.00 4499150 35.2 35.75 35.75 2770900 24.14 30800 395.8 399.4 399.3 116025 3.13 January - 7950.00 89775 42.45 43.25 43.1 20350 1171.9 2775 354.5 380.75 383.6 750 -62.5 January - 8000.00 7015300 51.5 51.9 51.5 4328250 10.01 332475 314.75 315.95 316 1252450 8.42 January - 8050.00 151850 61.1 62.35 62.55 30250 179.45 225 268.65 285.45 286.55 9475 0.53 January - 8100.00 7471125 74.05 74.3 74 3294350 18.88 482300 240.75 243 241.25 530825 7.4 January - 8150.00 299550 88.05 89.9 88.05 62275 327.27 18075 206.75 207.95 206.3 5475 157.65 January - 8200.00 7909000 104.5 104.7 104.65 3467800 6.53 2685050 173.45 174.7 173.45 1189225 19.22 January - 8250.00 213375 121.5 125 123 72650 19.74 226800 144.4 146.5 144.85 54275 66.74 January - 8300.00 3333450 145.25 146.3 146.25 2944725 1.3 7076200 119.05 120 119.05 3011725 13.43 January - 8350.00 27050 167.6 172.95 170.1 30300 -3.89 248925 95.55 96.95 96.5 94550 18.04 January - 8400.00 697425 200.15 204.25 200.25 1160150 -6.41 9318000 77 77.2 76.8 3308675 7.11 January - 8450.00 1700 223.9 241.8 225 3200 -7.25 179725 58.5 59.95 58.45 50600 47.63 January - 8500.00 346000 265.05 268.3 267.05 1228775 -0.61 7538475 44.95 45 45 2648950 8.27 January - 8550.00 15850 296.9 318.8 285.95 9225 525.42 163450 32.65 33.6 33.6 70525 38.08 January - 8600.00 54000 342.6 347.15 343.05 1322300 -0.62 5568475 24.6 24.75 24.15 3036825 15.27 January - 8650.00 25 371 582.8 435 225 12.5 21525 17.4 19.05 18 77200 3.38 January - 8700.00 50475 430.15 438.55 435.05 345850 0.96 3357100 13.7 13.75 13.8 2002600 17.71 Cni Research Limited www.cniglobalbiz.com 9 DISCLAIMER STATEMENT This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. 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