RULE THE MARKET - Karvy Onlinecontent.karvyonline.com/contents/kstreetissue011.pdfDisclaimer: Karvy...

ISSUE: 011

17TH NOVEMBER, 2018

RULE THE MARKET

From The Desk Of Research HeadCONTENTSEquity 1-6

Derivatives 7-8

Commodity 9-12

Currency 13-15

Events 16

TeamDr. Ravi Singh

Syed Hasan Jafar

Viplav Dhandhukia

Amrita Preetam

Amit Samar

Srinivas Krishnan Bobba

Chetan K Waghray

Vaishali Paruthi

Pankaj Wadhwani

Benjamin Francis

Arvind Vinjamoori

Munindra Upahyaya

Yashi Bhutika

Jayasree Ram

Vivek Ranjan Misra

Veeresh Hiremath

Arpit Chandna

Ravi Pandey

Anup. B.P

Ramesh Chenchala

P Rahul Chander

Vinod Jayakumar

Siddhesh Ghare

Bharath Sunnam

Karvy Head Office

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UNSECURED LOANS MAY EXPOSE BANKS TO UNFORESEEN RISKS

It is not at all a surprising fact that Indian banks, that burnt their fingers on large project loans to

some renowned conglomerates, turned towards retail borrowers to drive their growth. A report says

that the unsecured credit card lending and private loans became the quickest growing segments

for banks within the last 3 years, increasing at a 30-31 per cent annually whereas system credit has

accumulated only 8-9 per cent. Even though the unsecured retail loans are by no means at dreadful

levels, currently standing at less than eight per cent of outstanding bank credit, their hot growth rates

do warrant attention from bank risk managers and RBI. Indian banks have had a bitter expertise with

indiscriminate retail disposition throughout the previous boom. During defaults, unsecured loans had

a negligible prospect for recovery.

NECESSITY VS OVERDOING IT

This shift in bank lending is a necessity for the economy. In recent years, public consumption has

been the key engine of India’s growth as the majority of the India Inc capex was within the doldrums.

Provided that, majority of the country’s population continues with the lower middle class income,

retail access to credit is imperative to sustain the consumption juggernaut. Banks too are keen to

push unsecured loans which help to showcase robust credit growth with returns as high as 3-4 per

cent. With the appearance of credit bureaus, information repositories on credit history and social

media analytics, lenders these days have time to place their retail borrowers underneath a magnifier

to increase loans solely to prime ones. However, with multiple lenders (such as universal banks, NBFCs,

small and microfinance establishments) currently chasing the identical retail borrowers, the question

is that if this rat race can force a dilution of credit standards, then it may result in poor risk valuation

and trigger a collapse of the castle of cards.

WHAT BANKS COULD DO TO MAINTAIN THEIR HEALTH?

To stay away from the above kind of situation, public sector banks might have to fortify the pace

of technology adoption and build capability in various credit grading and information analytics.

Getting retail exposures indirectly through securitisation or assignment deals with NBFCs or tiny

finance banks is another choice. Historically, such niche lenders have managed low credit prices by

concentrating in areas wherever they need last-mile reach, hiring native employees and investing in

native communities to make sure smart credit behaviour. However, they still evidenced liquidity risks

and unexpected shocks, suffering a pointy spike in defaults throughout the economic crisis and later

during demonetisation. Banks should be conservative with their exposure limits to unsecured retail

loans, irrespective of their growth rates or yields appeal in the short run.

- DR. RAVI SINGHHead-Technical & Derivatives Research

EQUITY

Economy

• India’s trade deficit widened in October despite global oil prices easing during the month. The gap between exports and imports reached $17.1bn in October as compared to $14bn in September as per data released by the Commerce Ministry.

• Centre likely to raise Rs. 140 bn through basket share sale in 11 CPSEs.

• Fitch keeps India’s sovereign rating unchanged at BBB-.

• SEBI asks listed companies to disclose commodity risks in a transparent, uniform manner.

• Exports bounced back and grew 17.86% to $ 26.9 bn in October.

• The government has collected around Rs. 5 Tn in direct taxes.

Automobile:

• Mahindra & Mahindra Ltd inaugurated its electric technology manufacturing hub as it focuses on producing more electric vehicles by 2030 and invested Rs. 1 bn on building up the electric technology manufacturing hub in Bengaluru.

BFSI:

• Indian banks could be recapitalized with government bonds, said an independent director on the central bank’s board.

• State Bank of India’s Chairman Rajnish Kumar said there is no liquidity crisis. All NBFCs have been able to roll over and meet their commitments.

• CAR of Allahabad Bank, UCO, IDBI and CBI fell below 9%.

Pharma:

• Alkem Laboratories has announced that no Form 483 observations were issued by USFDA post inspection of its Bioequivalence facility at Taloja, Maharashtra.

• IOL Chemicals & Pharma board approved enhancing of Metformin unit for Rs. 2.7 cr and completion of Clopidogrel Bisulphate and Fenofibrate for Rs. 19.26 cr.

FMCG:

• The Delhi High Court has for the time being lifted the ban on sale of electronic cigarettes and vaping devices in Delhi.

• ITC plans to eye Rs. 1 trillion from FMCG, plans to expand food portfolio.

Aviation:

• Loss-making national carrier Air India plans to mop up Rs. 7-8 bn by selling over 70 residential and commercial properties spread across the country, a senior airline official said.

• Tata Group and Government are said to be in talks with banks to take a haircut in the deal.

Power

• Tata Power’s joint venture ‘Resurgent Power’ signed a share purchase agreement to acquire 75% stake and 27 cr preference shares in Prayagraj Power Generation for Rs. 6,000 cr.

Oil and gas

• India’s total consumption of petroleum products rose 4% YoY in October to 17.99 mn tons, primarily led by robust growth in consumption of diesel.

• Government is considering a plan to sell shares worth USD 2 bn in Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Oil India Ltd (OIL) to help meet this year’s divestment target.

NEWS

INTERNATIONAL NEWS

• A number of ministers including Brexit Secretary Dominic Raab resigned.

• The USA and China have doubled down on efforts to reach an agreement on trade ahead of G-20 meeting later this month.

• Canada may slap their own sanctions on Saudis.

• Italy’s populist government said it would stick with its high-spending budget plan, in a rejection of calls by the European Union to revise its fiscal targets.

• Germany’s economy saw its worst quarter; initial third-quarter growth data showed the Germany economy shrunk by 0.2% QoQ. This is the first time it has contracted since the first quarter of 2015.

• IMF’s Managing Director Christine Lagarde said a central bank-backed digital currency could help promote financial inclusion, security.

TREND SHEETSymbol CMP S2 S1 R1 R2 TREND

SENSEX 35457.16 34351 34904 35778 36099 Up

NIFTY 10682.2 10351 10517 10771 10861 Up

NIFTYBANK 26245.55 25039 25642 26591 26936 Up

YESBANK 191.00 160 176 219 246 Down

RELIANCE 1,127.40 1049 1088 1148 1169 Up

SBIN 290.90 267 279 297 304 Up

ICICIBANK 367.55 336 352 379 391 Up

HDFCBANK 2,004.30 1870 1937 2042 2080 Up

MARUTI 7,341.20 6779 7060 7583 7825 Up

AXISBANK 619.80 588 604 636 653 Up

TATASTEEL 574.10 544 559 600 626 Up

SUNPHARMA 519.75 450 485 578 636 Down

TITAN 921.35 812 867 952 983 Up

FORTHCOMING EVENTSCompany name Result Date

ALEXANDER STAMPS AND COIN LTD. 19-NOV-18

ROLLATAINERS LTD. 19-NOV-18

TAMILNADU TELECOMMUNICATIONS LTD. 19-NOV-18

ALLIANCE INTEGRATED METALIKS LTD. 20-NOV-18

OCL IRON AND STEEL LTD. 20-NOV-18

RELIGARE ENTERPRISES LTD. 20-NOV-18

RICOH INDIA LTD. 20-NOV-18

DEWAN HOUSING FINANCE CORPORATION LTD. 21-NOV-18

ESAAR (INDIA) LTD. 21-NOV-18

INDIAN INFOTECH & SOFTWARE LTD. 21-NOV-18

VISCO TRADE ASSOCIATES LTD. 21-NOV-18

NITIN FIRE PROTECTION INDUSTRIES LTD. 22-NOV-18

KSTREET - 17TH NOVEMBER 2018 1

INDIAN INDICES (% CHANGE)

GLOBAL INDICES (% CHANGE)

NIFTY MIDCAP100TOP GAINERS & LOSERS (1W)

SECTORAL INDICES (% CHANGE)

FII/FPI & DII TRADING (IN RS. CRORES)

NSE NIFTY TOP GAINERS & LOSERS (1W)

EQUITY

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

NIFTY

SENSEX

BSE MID

CA

P

BSE SMA

LLCAP

NIFTY N

EXT 50

NSE M

IDC

AP

-4

-3

-2

-1

0

1

2

3

AU

TO

BAN

K

SERVICES

PHA

RMA

IT META

L

ENERG

Y

CO

NSU

MER D

URABLES

REAL ESTATE

FMC

G

-4

-3

-2

-1

0

1

2

3

4

NA

SDA

Q

DO

W JO

NES

S&P500

NIKKEI

HA

NG

SENG

SHA

NG

HA

I CO

MP

FTSE 100

CA

C 40

-1500

-1000

-500

0

500

1000

11/12/2018

11/13/2018

11/14/20

18

11/15/20

18

FII/FPI DII

-25

-20

-15

-10

-5

0

5

10

15

20

Dilip Buildcon

Godrej Industries

Jubilant Foodworks

Future Retail

Axis Bank

Endurance Technologies

Avanti Feeds

Dish TV

Page Industries

PC Jew

eller

-20

-15

-10

-5

0

5

10

15

Bharti Airtel

Eicher Motors

Titan

BPCL

UPL

GA

IL

Tata Motors

Indiabulls Housing Finance

Sun Pharma

Yes Bank


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Ashok Leyland CMP Rs.106Target Price Rs.150Upside 42%

Investment Rationale

• New product launches on track: Currently, Ashok Leyland (ALL) offers CV product in the range of 2.5 tons to 49 tons in the Indian market. To further strengthen its product portfolio, two new product platforms in MHCV segment are lined up during H2FY19 (High HP range of vehicles for tippers and world’s first 41-ton vehicle with five axles). The company has also planned to invest Rs. 4 bn over the next three years to introduce an entire range of LCV vehicles (2.5 - 7 tons). We understand that these strategic decisions have the potential to create additional revenue streams.

• Market share expansion: ALL has improved its market share from 33.5% to 35% in the domestic MHCV industry during H1FY19. Going forward, we believe that strong demand buoyancy will sustain and benefit the company.

• Robust business outlook in the medium-term: The company expects Indian MHCV industry to report 10-12%+ volume growth in FY19 on account of a pick-up in construction, infra-spending and mining activities in the country. Going forward, FY20 is also expected to be a positive year due to pre-buying before BS-VI implementation. Furthermore, the company is also expected to benefit from old vehicle scrappage policy which is likely to be implemented in FY21.

VALUE PARAMETERSFace Value (Rs.) 1.0

52 Week High/Low (Rs.) 167/103

M.Cap (Rs. Bn/US $mn) 310/4.3

EPS (Rs.) 5.4

P/E Ratio (times) (FY20E) 11

Dividend Yield (%) 2.0

Stock Exchange BSE

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 17 FY 18 FY 19 FY 20

REVENUE 201 262 330 392

EBITDA 22 27 35 45

EBITDA(%) 10.9 10.4 10.5 11.5

PAT 15.5 15.7 20.8 28.0

EPS (Rs.) 5.5 5.4 7.1 9.6

RoE (%) 21.2 23.9 26.8 30.2

P/E 20.0 19.8 14.9 11.1

P/E CHARTValuation

At CMP Rs. 106 based on its core earnings, the stock is currently quoting 11.1xFY20E earnings. At PER of 15xFY20 we see favorable risk-reward. We recommend BUY rating on the stock for a target price of Rs. 150 (15xFY20E core earnings) based on SOTP valuation. We believe that resignation of CEO and MD of the company, Mr. Vinod Dasari will not have a material impact on the company’s operational and financial performance as we anticipate a smooth management transition.

EQUITY


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Visaka IndustriesCMP Rs.469Target Price Rs.750Upside 60%

Company Background

Hyderabad based Visaka Industries Ltd has two main business verticals i.e., Building Products (including cement asbestos and fiber cement boards like V-Poards and V-Panels) and Synthetic Yarn. The company is the second largest manufacturer of cement fiber roofing sheet and is the largest player in the V-Board business. It is the market leader in twin Air Jet technology in the textile synthetic yarn business. The company’s exports accounted for 7.2% of the total revenue. The company has 12 manufacturing facilities and 13 marketing offices across India

Investment Rationale

• We expect the revenue to grow at 9.5% CAGR during FY18-20E due to new product launches, enhanced capacities, brand building efforts & change in product mix.

• Profitability margins to improve to reach an EBITDA margin of 15% by FY20E owing to price hikes.

• Operations in the new facility at Jhajjar, Haryana to commence from Nov 2018 onwards. The facility has the potential of Rs. 650 Mn revenue addition, if operated at full capacities. The facility is expected to improve the profitability margins by 75-100 bps due to reduced transportation costs.

• ATUM, a solar roofing product, is expected to draw a revenue addition of Rs. 150 Mn by commercialization for FY19E. We believe it to be an upside catalyst in near future.

• The management has announced plans to expand V- Panels capacity by 10,080 MTPA keeping the demand outlook in view. While the process takes 8 months to complete, Capex Rs. 125 Mn for the same is expected to be met through internal accruals.

• Visaka is planning to increase its non-asbestos revenue contribution to ~50% from the current 33% by FY20E.

VALUE PARAMETERSFace Value (Rs.) 10.0

52 Week High/Low (Rs.) 840/416

M.Cap (Rs. Bn/US $mn) 7.2/0.9

EPS (Rs.) 41.9

P/E Ratio (times) (FY20E) 9.3

Dividend Yield (%) 0.4

Stock Exchange NSE/BSE

ValuationAt CMP of Rs. 469, Visaka is trading at 9.3x to FY20E EPS. While remaining positive about the company’s performance, we value the company at 15x (5 year average of one year forward PE) to FY20E EPS and retain our “BUY” rating with a target price to Rs. 750 with an upside potential of 60%. Competition from alternate products along with the potential ban on asbestos products may pose a threat to the call.

EQUITY

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 18 FY 19 FY 20

REVENUE 10123 10960 12145

EBITDA 1502 1578 1804

EBITDA(%) 14.8 14.4 14.9

PAT 666 685 803

EPS (Rs.) 41.9 43.1 50.6

ROE (%) 14.9 13.7 14.1

P/E CHART


EQUITY

BEAT THE STREET - TECHNICAL ANALYSIS

ICICI Bank Limited

ICICIBANK is our preferred bet among the Private Banks for long term investment. The stock has ever green investment history and fall in the list of investor friendly stock for long term. The stock is in uptrend and making higher highs and higher lows on weekly charts. The historical price action in the stock suggests that any meaningful dip in the stock attract market participants which help stock to resume its up move. The stock has seen profit taking from the life time high of around 366 levels posted in Jan 2018 which dragged the stock to the low of around 259 levels in span of around two months. Thereafter, the stock has bounced well from the said lower levels and bounce in the stock from the low of 259 levels has seen supportive volume formation on weekly charts. However, the bulls have taken charge over the counter and made a new life time high at 375.30 and trading near the same. On technical setup, the 14 period RSI is pointing northwards and trending above the signal line on weekly chart. Whereas, the Parabolic SAR is trading below the price action which indicates up trend in the stock will remain intact in near term. The recent development in the stock suggests that the stock is well placed to continue it’s up move. Investors who want to build position in this counter can add at current levels near 365 levels, add more on dips towards 340 levels for the upside target of 420- 440 levels with stop loss placed below 320 levels.

Godrej Consumer Products Limited

GODREJCP is in a secular uptrend and making higher highs and higher lows on weekly charts. The price action in the stock has formed base near 695- 696 levels. On the other hand, the stock has hurdle around 745-750 levels, surpassing which it may see a rally towards 830- 840 levels in near term.

On the monthly chart, the stock is in a strong uptrend indicating large scale accumulation and has attracted buying by the market participants every time it has dipped to its 21 period moving average on the monthly chart, which is currently placed at 678 levels. In the last week, the stock has crossed its 21 DEMA from below indicating bullishness in the near term weeks after having consolidated in the range of 670-720 levels for the past 5-6 weeks.

From the technical perspective, the stock has given a consolidation breakout from the said range with supportive volume formation. On the Momentum oscillator front, the 14 periods RSI is placed above 40 levels on the daily, weekly as well as monthly charts and has given a positive crossover to the 9 period signal line on the daily chart, indicating underlying strength and bullish bias in the counter. Investors who want to build position in this counter can add at current levels near 720 levels, add more on dips towards its 21 period moving average on the monthly chart placed near 670-680 levels for the upside target of 840-890 levels with stop loss placed below its recent swing low at 630 levels.

Stock ICICIBANK

CMP 367.55

Action BUY

Entry 365

Average 340

Stop loss 320

Target 420

Target 2 440

Time Frame 6-7 Months

Stock GODREJCP

CMP 723.40

Action BUY

Entry 720

Average 670-680

Stop loss 630

Target 840

Target 2 890

Time Frame 6-8 Months


EQUITY

Sentiment

Stop Loss 262

Target 234

Lot Size 2000

Margin 80200

21-DEMA 254.5

Open Interest Shares 9070400

Change in OI 790400

Cost of Carry (%) 8.30

SECTORAL SNIPPETS

NIFTY AUTO (9112.35) ended the week with loss of around 1.7% concluding well above the psychological mark of 9000 for the third straight week forming god base around 9050 level. The index has broken the major resistance levels of 9100-9150 level in the last week and is trading well above the major short term moving averages on the daily charts. The index has partially filled the unfilled gap around 9300-9350 levels on the daily charts in the last week which may act a immediate resistance in the near term. The current structure of the index looks bullish in the all the time frames with crucial support placed around 9000-9050 levels which is pegged above the 20 day-EMA. Technically, the Index has witnessed a strong rally from 6859 levels to 12108 levels on weekly charts and thereafter witnessed a round of correction which dragged the price towards its 61.80% (Golden ratio) Fibonacci retracement level of the said rally. The index is now well poised to move towards the next Fibonacci retracement level of 9500 (50%) in the near term. On oscillator front, the 14-period RSI is trading above its 9-day signal line and poised with strong bias after the recent run up in the index price. Going forward, the supports for the index are placed around 9000-9050 levels followed by 8900 levels. Whereas on the upside, resistance is placed around 9300-9350 levels followed by 9500 levels. For the near term, index is expected to consolidate in the range of 9000-9400 levels with bullish bias coupled with stock specific action among the individual index stocks. MARUTI, M&M & ESCORTS are expected to outperform its peers in the near term after the recent positive move in the stocks.

NIFTYBANK (26245.55) outperformed the Nifty with gains of 1.84% during the week passed by while the broader index Nifty gained by 0.92%. The index surpassed its crucial resistance at 25900 levels and sustained above the same during the week and is poised to move towards 26500 levels which may act as immediate resistance. Considering the positive bias in the index, market participants may stay long with a bullish bias. On the stock specific front, most of the index stocks closed in green except a few; BANKBARODA, KOTAKBANK, HDFCBANK, SBIN, ICICIBANK and PNB gained by 4.13% to 2.23% during the week. KOTAKBANK gained as the Dutch financial major ING Group is understood to have sold 0.7 per cent stake in Kotak Mahindra Bank and is likely to sell remaining stake in the private sector lender by this month. On the other side, YESBANK lost by 15.53% respectively with respect to the weekly closing basis. YESBank slipped over 6 per cent in early trade on Friday after former SBI chairman OP Bhatt resigned from the panel set up by the private sector lender to find a successor to its MD and CEO Rana Kapoor. OP Bhatt has tendered his resignation from his duties as an external expert of the ‘Search & Selection Committee’ (S&SC) with immediate effect citing that there may be a potential conflict of interest. Technically, BankNifty may face crucial resistance at 26500 and 26800 levels. For the week ahead, support for the index can be pegged at 25900 levels followed by 25600 levels. On the momentum setup 60-period weekly CCI is plotting above its zero line indicating an underlying bullishness in the index. However, we may expect a subdued movement in the index if it falls below the 25900 levels.

NIFTY FMCG (29153.35) has closed in green by around 1.6 % outperforming the Benchmark index Nifty which closed in green with a gain around 0.9 % on weekly basis. Technically the index is holding above 21/50/200 day EMA levels in daily chart. 14 day RSI is trading @ 55.93 above its 9 period averages @ 50.84 suggesting positive momentum in the index. Other indicators Parabolic SAR and Heiken candlesticks suggest the positive trend in the index. On daily charts the index has tested the upper band in Bollinger bands while the bands are expanding indicating positive momentum. Among the index stocks EMAMILTD was leading the league with around 11% gains. JUBLFOOD, MCDOWELL-N, MARICO, UBL, BRITANNIA, , GODREJIND, GSKONS, HINDUNILVR, DABUR & GODREJCP closed in green while PGHH was closed in red. Going forward, the supports for the index are placed around 28670 levels and below it at 28400 zone, any breach below the level could aggravate selling pressure in the counter. While resistance is placed around 29335 levels and above that around 30030 levels suggesting possibility of huge supply at these levels.

NIFTYIT (14473.15) traded with mixed to negative bias, lost nearly half a percent whereas NIFTY gained nearly 0.90% on weekly closing basis, exhibiting underperformance of the Index. On the stock specific front only three stocks ended in green, whilst all other major stocks lost; TECHM 2.93%, ofss 0.64% & WIPRO 0.23% managed to close in positive territory, whereas HCLTECH -0.57%, TCS -1.02%, INFY -1.04%, KPIT -2%, Mindtree -2.03%, TATAELXSI -6.47% & INFIBEAM -20.27% has underperformed in the last week. NIFTYIT Index after brief consolidation below its 50-DEMA, succumbed to selling pressure on last Wednesday and eventually turned sideways in last two trading sessions of the week. Technically Index is holding above its major 200-DEMA which is currently placed near 13985 levels, whereas it is finding resistance to surpass above its 50-DEMA (14892) and also holding below its 21-DEMA. On the momentum setup 14-period RSI on daily time frame is consolidating above 40-levels, which indicate still bulls are in control, however spurt in momentum is lacking. On the downside Index has an immediate support near 14200 levels followed by 13980 levels, while on the higher side 14600-14850 will work as an immediate resistance followed by 15000. Going forward Index on sustaining above 14200 is likely to consolidate further between 14200-14800 levels.

BRITANNIA INDUSTRIES LIMITED: BUY BRITANNIA (NOV FUTURE) | CMP: 5958.35 SECTOR: FMCG

BRITANNIA in the week passed by closed with a gain of nearly 3.40%, whereas benchmark Index NIFTYFMCG also closed around with a gain of 1.60% and Britannia has outperforming the NIFTYFMCG index. On price chart the stock has taken off immediate price swing resistance at 5789 levels and has closed above the said levels. Also it is able to close above its 20 days simple moving average which indicates a positive outlook in the near term. The momentum indicators like 14 periods RSI is trading above its signal line indicating a bullish bias in the near term. On derivative front the stock has seen short closure in the last trading session. Hence, we recommend Smart Traders to initiate short position near 5900 levels for the higher target of 6390 levels, keeping a stop loss below 5600 levels.

Sentiment

Stop Loss 5600

Target 6390

Lot Size 100

Margin 97100

21-DEMA 5705

Open Interest Shares 753000

Change in OI 159000

Cost of Carry (%) 4.89

EXIDE INDUSTRIES LIMITED: SELL EXIDEIND (NOV FUTURE) | CMP: 246.75 SECTOR: AUTO-ANCL

EXIDEIND has closed on a negative note of 4.20% during the week under performing NIFTY AUTO which has also ended on a negative note of around 1.77% during the same period. On the price charts, the stock has encountered resistance around 250 -255 range which is around 21 EMA on the daily chats which is currently placed around 254.50 levels. Also on price charts the stock has broken down from a bearish continuation pattern indicating a continuation of the bearish trend. Hence, we recommend Smart Trader to initiate the Short position on the bounce around 251 levels keeping a stop loss placed above 262 for the target of 234 levels.


WEEKLY VIEW OF THE MARKET

NIFTY (10682.20): Nifty traded range bound mostly during the week and witnessed a consolidation breakout on the last trading day surpassing the crucial resistance at 10645 levels and gained by 0.92% week on week basis. However, the index needs to prove its mettle by surpassing and sustaining above the crucial 10710 levels for the recent 680 point rally to sustain.

The CPI data for October released during the week stood at 3.31%, down from 3.70% in September. India’s annual rate of inflation based on wholesale prices rose to 5.28% in October from 5.13% in September. Selling pressure was witnessed in export-oriented stocks like IT and healthcare as the domestic currency appreciated against the US dollar. For the week ahead to note, market participants may stay on toes as the schedule for state elections advances which is likely to act as a stage rehearsal for the upcoming General election in May 2019. Nov 23, Friday will remain holiday for trading on the occasion of Guru Nanak Jayanti.

The index above 10710 levels may see further upside towards 11000 levels in the short run while 10600 levels may act as a crucial support during the week. On the derivatives front, support for the Nifty is placed around 10400 and resistance is placed around 10800 followed by 10900 levels. Nifty is expected to trade in the range of 10440 to 10900 levels with bullish view for the week.

DERIVATIVE STRATEGIES

Type: SHORT STRANGLE IN NIFTY

First leg Sell one lot of NIFTY 29 NOV 10900 CE @ 30.00

Second leg Sell one lot of NIFTY 29 NOV 10400 PE @ 38.00

Max Profit 5,100

UBEP 10,968

LBEP 10,332

Max Loss Unlimited beyond BEP'S

Stop loss BEP'S

Rationale The index is expected to trade in the range of 10440 - 10850 range in the near term.

DERIVATIVES

Type: CALL LADDER IN BANKNIFTY

First leg Buy one lot of BANK NIFTY 22 NOV 26200 CE @ 233

Second leg Sell one lot of BANK NIFTY 22 NOV 26400 CE @ 140

Third Leg Sell one lot of BANK NIFTY 22 NOV 26700 CE @ 51

Max Profit 3,160

Max Loss Unlimited beyond BEP'S

UBEP 26,858

LBEP 26,242

Type: Bull call spread in HEROMOTOCO

First leg Buy one lot of HEROMOTOCO 29 Nov 2950 CE @ 58.00

Second leg Sell one lot of HEROMOTOCO 29 Nov 3050 CE @ 21.00

BEP 2,987

Max Profit 12,600

Max Loss 7,400

Rationale The stock is in short term up trend and is likely to edge higher towards 3050- 3075 levels in near term.

Type: Bear put spread in TATAELXI

First leg Buy one lot of TATAELXSI 29 NOV 960 PE @ 25

Second leg Sell one lot of TATAELXSI 29 NOV 940 PE @ 18

BEP 953

Max Profit 5,200

Max Loss 2,800

Rationale The stock is in short term down trend and is trading below its short to medium term moving averages hence a bullish strategy is recommended.

7KSTREET - 17TH NOVEMBER 2018

DERIVATIVES

FII ACTIVITY IN INDEX FUTURES FII ACTIVITY IN STOCK FUTURES

TOP 6 LONG BUILD UP

Stock Name LTP % Price Change Open Int % OI Change

APOLLOHOSP 1233.5 7.37 1371500 106.09

SIEMENS 981.45 3.32 2024600 79.95

REPCOHOME 401.35 0.78 653400 41.52

INDIGO 1049.4 5.79 4578000 36.59

AJANTPHARM 1119.6 3.93 753000 26.77

CANBK 263.7 7.02 12126000 25.45

BANKNIFTY OPTION OI CONCENTRATION (WEEKLY) CHANGE IN BANKNIFTY OPTION OI (WEEKLY)

TOP 6 SHORT CLOSURE


DIVISLAB 1558.7 0.63 2914800 -25.81

JETAIRWAYS 346.5 34.59 5094600 -23.88

DABUR 395.65 4.89 13456250 -17.34

BPCL 322.05 8.49 11199600 -15.09

TECHM 728 2.94 12109200 -13.40

BALKRISIND 954.9 2.40 2604000 -12.66

TOP 6 SHORT BUILD UP


KSCL 518 -1.71 1368000 76.06

ASHOKLEY 105.55 -10.74 70960000 50.97

MOTHERSUMI 149.2 -12.57 34397700 41.33

TATAELXSI 962.55 -6.42 1690800 37.64

SUNPHARMA 519.75 -13.01 36404500 31.84

DCBBANK 155.1 -6.34 4959000 30.72

TOP 6 LONG CLOSURE


JUSTDIAL 491.3 -3.62 1993600 -28.94

HEXAWARE 309.2 -3.34 5613000 -16.04

COALINDIA 263.65 -1.79 24369400 -14.55

MGL 844.5 -0.07 1375800 -12.91

HCC 13.95 -4.12 22914000 -12.87

MINDTREE 837.4 -1.98 2987400 -11.61

NIFTY OPTION OI CONCENTRATION CHANGE IN NIFTY OPTION OI


COMMODITIES

BULLIONBullion market had witnessed a positive trend during the week ended on 16th November, 2018 recouping from below $1200 per troy ounce level made at the beginning of the week. COMEX gold futures surged to one month high on emergence of safe haven asset buying. Though dollar remained at elevated levels, bullion market took support from political turmoil in Great Britain. Prime Minister Theresa May vowed to fight for her draft exit deal with the EU on Thursday after the resignation of her Brexit Secretary and other ministers put her strategy and her job in peril. Further, Italy resubmitted its budget in the same without making any changes as European Union had rejected its plan earlier. U.S. retail sales rose by 0.8% in October against -0.1% level seen in September as purchases of motor vehicles and building materials surged. On domestic front, the gains in MCX gold futures was capped by appreciation in the Indian Rupee against US Dollar, which strengthened by 0.95%.

ENERGY COMPLEXCrude oil prices lost its ground this week majorly prompted by the slowdown in demand and a fear of emergence of supply glut in coming year ahead. Brent prices have fallen till the level of $65 from the peak price level attained in October of $86.74/bbl. Similarly, WTI prices at NYMEX had made this year’s high of $76.72/bbl in October and now is trading around $55/bbl. Following the international market, MCX crude prices surged in October and reached Rs. 5673/bbl, which broke the level of Rs. 4000/bbl in Nov month. In the mid-Nov, the global oil market went into contango wherein the prices of immediate delivery are at discount than the far month delivery contract suggesting the oversupplied market condition. Global oil market is currently pressurised by fundamental set backs from both the demand & supply side. Supply at the one end is surging contributed by three major oil producers - US, Saudi Arabia & Russia whereas demand seems to be shrinking due to global economic slowdown primarily in countries like Germany, Japan & China. As per EIA, US crude oil output is expected to hit a record 7.94 million barrels per day (bpd) in December along with surge in offshore facilities as well pushing the total production levels to 11.6 million bpd ahead of Saudi & Russia. Separately, OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices. OPEC meeting is due on 6 Dec in which the decision for production cut might come into effect but the latest Russian government sources said that production in Russia shouldn’t be reduced as Moscow is increasing its production and will maintain that trend in upcoming time. But this week’s market contango went into creating tighter supply conditions and making the oil unattractive to be put in storage. Thus the supplies or major deliveries could again bring back the balance in global market but till then the prices is expected to remain on a weaker note.

BASE METALSWith mid-November approaching, base metal prices were pressurized with rising dollar strength after the raise in Fed interest rates. Metal prices were captivated largely by the economic events happening around the globe giving fewer concerns for the fundamentals. The close of U.S Bank on the first week made the speculators take up short positions making the prices to fall in the succeeding two trading sessions as they covered their shorts in lieu of raising optimism over the trade wars between the top two countries. With China’s northern province of Hebei under an orange alert which is the second highest warning, steel mills cut their output by half considering the environment, factoring a support for the metal prices however capped largely by the current political concerns. According to National Bureau of Statistics, China’s Primary Aluminium Production was down by 2.5 percent in October ahead of winter production cuts tracking the weaker Aluminium prices in the market. However, the production was up by 6.8 percent in the same month a year ago as the production cut order from Chinese government was very lenient this year by 30 percent low than previous year. The cumulative production levels of Aluminium are 27.71 million tonnes in the current year till October 2018. Similarly, global refined Lead supply has decreased during first nine months of 2018 compared to 2017 indicating a tighter supply from mine. However, the metal production has increased by 8,000 tonnes in the nine months period. However, there was a fall of 49,000 tonnes usage of the metal in the three quarters. Also, the refined Zinc supply from mine increased both on nine months side and monthly basis. There was a similar rise in metal production by 62,000 tonnes with a corresponding fall in metal usage by 31,000 tonnes during the first nine months of the CY 2018 and CY 2017.

OILS & OILSEEDSSoybean futures are expected to trade on mixed note may keep bias on negative side. Expected rise in arrival pressure at key trading centers along with improved harvesting activities could weigh on prices in near term. Daily arrivals of soybean across India have been hovering in range of 7 -9 lakh bags and expected to improve in coming days. USDA revised its production estimated upwardly up to 110 million MT. However, USDA trimmed estimates for global production from 369.48 million

tonnes to 367.50 million tonnes due to downward revision in production estimates for US. Soybean production in US is estimated at 125.18 million tonnes in month of Nov compared to 127.63 million tonnes of prior months. However, overall soybean production in US is still likely to be higher by 4% y/y. Global production is estimated at 367.5 million tonnes compared to 338.57 million tonnes of 2017-18, higher by 9% y/y. Production for Brazil is estimated at 120.50 million tonnes for 2018-19. Similarly, RM seed futures could fall further on accelerating pace of sowing progress in Rajasthan and Madhya Pradesh. The area under mustard seed cultivation has touched 43.34 lakh hectares as against 44.46 lakh ha during the corresponding period in the previous rabi season. MCX CPO futures could trade mixed to down due to higher production outlook in Malaysia. Malaysia’s palm oil stockpiles at the end of October increased 7.6 percent from the previous month to 2.72 million tones. Production in October rose 6 percent from the previous month to 1.96 million tonnes, while exports fell 3 percent to 1.57 million tonnes.

COTTONDomestic cotton futures are expected to trade sideways to down in upcoming week in expectation of rise in arrivals at major trading centers. About 26 lakh bales of cotton have been arrived till the end of Oct at physical market which is higher by 44% y/y for the corresponding period in prior year. However, losses in cotton prices are likely to be limited due to weaker production outlook. Cotton Association of India (CAI) has estimated cotton crop for 2018-19 crop year at 343.25 lakh bales of 170 kgs each which is lower by 4.75 lakh bales than 348 lakh bales announced at the Second Domestic Conference for 2018 held on 6th October, 2018 in Aurangabad. The CAI has projected total cotton supply during October 2018 at 50.13 lakh bales which consists the arrival of 26.13 lakh bales during the month of October 2018, imports during October 2018 which the Committee has estimated at 1.00 lakh bales and the opening stock at the beginning of the season as on 1st October 2018 which the Committee has estimated at 23.00 lakh bales. Meanwhile, improved export of Indian fiber and yarn could support prices in near term. Export of cotton textiles have grown by 26.8 per cent in 2018-19 (April to September 2018) wherein exports of cotton textiles (raw cotton, yarn, fabrics, and made-ups) touched USD 6235 million as compared to USD 4917 million in 2017-18. At global front, ICE cotton futures could trade mixed to higher on slower harvesting progress amid weakening US dollar Index against the major currencies. USDA released its weekly crop progress report that showed about 54 % of crop was harvested till end of 11th Nov against the 63% of prior year for corresponding period and 61% of five year average.

SPICESCardamom futures traded on a positive note for second week in a row tracking supply side concerns. At the spot markets, arrivals are lower in the third round of picking activities and it is expected to decline further in the fourth round as well. Lower production in the current season will be experienced in the days to come as entire demand has to be taken care by minimum available stocks. Lower production in ongoing season is due to adverse weather conditions in Jul-Aug in the growing regions that had affected the crop. For the week, cardamom futures to trade on a positive note tracking overall bullish factors in the market however, small correction upto 1450 levels can be expected. Arrivals are expected to decline further in the coming days and re-pooling quantity will be lower. Turmeric futures during the week traded on a negative note dragging loss to third straight week. Expectations of higher production during the upcoming harvest due to higher area supported by good weather conditions weighed the prices. Stockist and other buyers were hesitant to actively buy stocks on expectations of higher crop in the upcoming harvest. For the week ahead, fall may be extended up to 6420 levels in turmeric; hence sell on rise strategy can be applied. Rainfall is expected in growing regions of mainly Tamil Nadu and Andhra Pradesh due to cyclone; hence, market will be carefully watching the intensity of rainfall and its effect on crop. However, major loss will be capped around 6390-6400 as these levels may act as psychological support levels. Jeera futures extended loss for the 9th consecutive sessions as they traded fully negative during the week. Extended profit booking from multi week higher levels of Rs. 21520 per quintal weighed down the market. Another factor in the form of change in sowing expectations added pressure to the jeera futures prices. Sowing activities that had started on a mild note owing to lack of water in the growing regions is expected to gain pace after govt said it will release water to support sowing in Gujarat weighed down the prices. Earlier, area was expected to decline by 25-30% due to scanty rainfall. There seems to be no stopping for dhaniya futures as prices continued their rally during the week. Expectations of lower area under dhaniya during the upcoming sowing season supported prices as farmers may shift towards other remunerative crops as dhaniya has given poor returns from the past few seasons. However, prices lost some gains from multi months high of Rs. 6694/quintal on profit booking. Further, due to poor rainfall, sowing area under crop may decline up to 30-35% Y/Y mainly in Rajasthan, Gujarat and Madhya Pradesh during current sowing season. Additionally, imports have declined due to lower prices of the domestic variety compared to international prices. Hence, dhaniya futures to be in the bull side for the medium term.


LEAD

Lead MCX Futures has taken the formation of a descending right angled triangle pattern on the daily charts. The last few sessions have consolidated at the support in bottom of the triangle at 138.80 levels. Currently, the base metal is seen rising from the support and is likely to test the upper slope line around 143.50-144 levels. A Fibonacci retracement of 78.6% is placed at 143.50 levels taken from the previous high and low. The Momentum Indicator RSI is placed at 46.84 mark supporting the upside move in the base metal.

COPPER

Copper MCX Futures has taken the formation of falling channel on the daily charts. The previous week witnessed a sharp fall after testing the upper slope line in the channel at 453 levels. Currently, the prices of Copper have taken support at the lower slope line at 428.50 and are taking a pullback. A Fibonacci retracement drawn from the previous wave suggests a pullback till 61.8% at 444 level that also coincides with the upper slope line. For the upcoming week, Copper prices could be positive till 444. The Momentum Indicator RSI is hovering at 45.28 level supporting the upside spike in the base metal.

CRUDE OIL

Crude Oil MCX Futures is currently trading in a descending symmetrical triangle on the daily charts. The energy commodity has taken support at the demand zone at the lower support line in the pattern at 4100 levels. Crude oil prices are expected to bounce back into the pattern and test the upper slope line in the pattern around 4300 levels. The short term EMA is hovering around 4410 levels suggesting a pullback which is also a 23.6% retracement taken on the previous wave. We suggest a buy in the energy commodity for target of 4300/4420 levels. The RSI is still resting in the oversold region at 19.97 mark and is curving up suggesting a positive trend in the forming.

COMMODITIES

TREND SHEET

Commodities 9-Nov 16-Nov % Change 52 Week High% Change from 52

Week High52 Week Low

% Change from 52 Week Low

MCX Gold (Rs/10 gms) 31016 31005 -0.00035 32311 -0.04042 28055 10.5%

MCX Silver (Rs/Kg) 36880 36867 -0.00035 41698 -0.11586 36000 2.4%

MCX Crude Oil (Rs/bbl) 4362 4142 -0.05044 5669 -0.26936 3579 15.7%

MCX Natural Gas (Rs/mmBtu) 272.6 301.8 0.107117 358.7 -0.15863 162.5 85.7%

MCX Copper (Rs/kg) 431.25 437.1 0.013565 493.25 -0.11384 402.55 8.6%

MCX Lead (Rs/kg) 142.45 142.4 -0.00035 172.5 -0.17449 137.25 3.8%

MCX Zinc (Rs/kg) 185.25 189.5 0.022942 232.7 -0.18565 163.8 15.7%

MCX Nickel (Rs/kg) 829.5 816.1 -0.01615 1095.2 -0.25484 692.8 17.8%

MCX Aluminium (Rs/kg) 142.65 138.95 -0.02594 178.85 -0.22309 128.3 8.3%

NCDEX Soybean (Rs/Quintal) 3331 3376 0.013509 3895 -0.13325 2767 22.0%

NCDEX Refined Soy Oil (Rs/10 kg) 749.7 742 -0.01027 796.35 -0.06825 678.8 9.3%

NCDEX RM Seed (Rs/Quintal) 4051 4013 -0.00938 4262 -0.05842 3727 7.7%

MCX CPO (Rs/10 kg) 546.5 508 -0.07045 673 -0.24517 504 0.8%

NCDEX Castor Seed (Rs/Quintal) 5842 6020 0.030469 6300 -0.04444 3831 57.1%

NCDEX Turmeric (Rs/Quintal) 6538 6600 0.009483 8066 -0.18175 6316 4.5%

NCDEX Jeera (Rs/Quintal) 20010 19290 -0.03598 22360 -0.1373 14010 37.7%

NCDEX Dhaniya (Rs/Quintal) 6026 6160 0.022237 6399 -0.03735 4186 47.2%

MCX Cardamom (Rs/kg) 1428.2 1490 0.043271 1505 -0.00997 818.5 82.0%

NCDEX Wheat (Rs/Quintal) 2048 2089 0.02002 2104 -0.00713 1575 32.6%

NCDEX Guar Seed (Rs/Quintal) 4682.5 4630 -0.01121 4869.5 -0.04918 3494.5 32.5%

NCDEX Guar Gum (Rs/Quintal) 10095 9678 -0.04131 10510 -0.07916 7200 34.4%

MCX Cotton (Rs/Bale) 22310 22360 0.002241 24280 -0.07908 18190 22.9%

NCDEX Cocud (Rs/Quintal) 1902.5 2007.5 0.055191 2043 -0.01738 1166 72.2%

NCDEX Kapas (Rs/20 kg) 868 868 0 1010 -0.14059 854 1.6%

MCX Mentha Oil (Rs/kg) 1761.8 1795 0.018844 1991.9 -0.09885 1106 62.3%

TECHNICAL RECOMMENDATIONS


COMMODITIES

NEWS DIGEST

• India will dispute US’ findings that claim New Delhi paid trade-distorting subsidies in the last seven years to its cotton farmers in excess of 10% permitted for developing countries.

• The country imported 15 million tonnes (MT) of vegetable oils during the 2017-18 year ended October 31, down 2.72 percent from the year-ago period. About 70 percent of the domestic requirement is met through imports, and palm oil accounts for 60 percent of the shipments.

• Malaysia’s palm oil stockpiles at the end of October increased 7.6 percent from the previous month to 2.72 million tones. Production in October rose 6 percent from the previous month to 1.96 million tonnes, while exports fell 3 percent to 1.57 million tonnes.

• China’s soybean imports in 2018-19 are forecast to decline by 10% to 85 million tonnes due to ongoing trade tensions with the United States and an outbreak of African Swine Fever.

WEEKLY COMMENTARY

• Crude oil rose on Friday on expectations that OPEC and its allies would agree to cut output next month, but prices were still down on the week on concerns that the global market was oversupplied. Brent was up 43 cents at $67.05 a barrel. It has been recovering for three sessions since hitting an eight-month low on Tuesday but is still on course for a weekly loss of about 4.5 percent.

• U.S. West Texas Intermediate crude futures rose 37 cents to $56.83 a barrel after their steepest one-day loss in more than three years. WTI is heading for a weekly loss of more than 5.5 percent.

• Gold rose to a one-week high on Friday as the dollar softened following recent gains on uncertainty over Britain’s exit from the European Union, while palladium held near a record high, putting it close to the price of bullion.

• U.S. manufacturing output increased for a fifth straight month in October, shrugging off a sharp decline in motor vehicle production and suggesting underlying strength in factory activity. The Federal Reserve said on Friday manufacturing production rose 0.3 percent last month. Data for September was revised up to show output at factories increasing 0.3 percent instead of advancing 0.2 percent as previously reported.

• Natural gas prices surged to a more than four-year high in panicky and volatile trading last week, after the latest cold weather forecasts raised fears that the U.S. is heading for a potentially colder-than-expected winter with too little gas supply.

MCX CRUDE MCX NATURAL GAS

CALENDAR SPREAD NYMEX - CRUDE OIL CALENDAR SPREAD NYMEX - NATURAL GAS


COMMODITIES

PRICES OF METALS IN LME/ COMEX/ NYMEX (IN US $)

Commodity Exchange Contract 02-Nov 09-Nov % change

Aluminium LME 3M 1955 1938 -0.87%

Copper LME 3M 6039 6202 2.70%

Lead LME 3M 1967 1945.5 -1.09%

Nickel LME 3M 11415 11325 -0.79%

Zinc LME 3M 2500 2568 2.72%

Gold CME DEC 1210.3 1213.9 0.30%

Silver CME DEC 14.13 14.27 0.99%

WTI Crude oil CME OCT 59.87 56.56 -5.53%

Natural Gas CME OCT 3.724 3.901 4.75%

INTERNATIONAL COMMODITY PRICES

Commodity Exchange Contract 02-Nov 09-Nov % change

Soybean CBOT NOV 898.75 915.5 1.9%

Soy oil CBOT DEC 27.65 27.68 0.1%

CPO BMD DEC 2042 1975 -3.3%

Cotton ICE DEC 78.11 76.21 -2.4%

SPOT PRICES (% CHANGE)

LME WAREHOUSE STOCKS (IN TONS)

Commodity Previous week This week Change % Change

Copper 169325 161025 -8300 -4.9%

Zinc 132325 124450 -7875 -6.0%

Aluminium 1056450 1066350 9900 0.9%

Lead 111325 110575 -750 -0.7%

Nickel 216612 215442 -1170 -0.5%

SHANGHAI WAREHOUSE STOCKS (IN TONS)*


Copper 142234 134744 -7490 -5.3%

Zinc 37378 39675 2297 6.1%

Aluminium 780808 765353 -15455 -2.0%

*Until WednesdayCOMEX WAREHOUSE STOCKS (IN TONS)


Copper 152620 147742 -4878 -3%

WEEKLY STOCK POSITION IN LME (IN TONS)

Metal Supply and Usage:

World Refined Lead Supply and Usage 2013 – 2018 (000 tonnes)

2017 2018 2018

Jan-Sep Jun Jul Aug Sep

Mine Production 3412 3380 351.0 378.6 380.1 400.8

Metal Production 8603 8610 943.0 960.7 986.0 1022.3

Metal Usage 8769 8720 957.5 963.8 987.9 1043.7

Source: ILZSG

-7.19%

-6.60%

-4.06%

-3.50%

-2.35%

-1.54%

-1.33%

-1.05%

-0.03%

0.07%

0.26%

0.30%

0.36%

0.88%

0.96%

0.98%

1.51%

1.96%

2.70%

2.92%

3.05%

3.33%

3.75%

5.44%

9.28%

-10.00% -8.00% -6.00% -4.00% -2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%

CPO

Crude Oil

Guar Gum

Jeera

Aluminum

Nickel

Guar Seed

Soy Oil

Gold

RM Seed

Barley

Silver

Cotton

Lead

Soybean

Turmeric

Wheat

Mentha Oil

Copper

Dhaniya

Castor Seed

Cardamom

Zinc

Cotton Seed Oil Cake

Natural Gas

World Refined Zinc Supply and Usage 2013 – 2018 (000 tonnes)

2017 2018 2018

Jan-Sep Jun Jul Aug Sep

Mine Production 9303 9415 1061.1 1052.7 1064.2 1084.5

Metal Production 9728 9790 1094.3 1047.7 1059.8 1100.8

Metal Usage 10126 10095 1116.3 1149.1 1141.6 1155.5

Source: ILZSG

China’s Primary Aluminium Production (Million Tonnes)

Oct-18 Sep-18 Oct-17Jan to Oct

– 18Jan to Oct

- 17

Primary Aluminium Production 2.72 2.79 1.62 27.71 26.54

Percentage Change(YoY) -2.50% 6.80% 4.40% - 986.0

Metal Usage 957.5 963.8 987.9 1043.7 987.9

Source: ILZSG


USD/INR

USDINR Spot prices had started appreciating after making a record low of Rs. 74.48 against the USD in the month of October 2018. On weekly basis prices have settled at 71.96, appreciated by 0.7% from the previous week’s closing price of Rs. 74.47. At present prices are trading below the daily 8, 13 EMA levels (72.48, 72.90). The momentum indicator RSI-14 is trading at an equilibrium point of 50, which has a potential to move lower in the coming sessions. However, lower side important support is seen around 71.84-71.70 levels which are the Fibonacci 23.6% of the range 74.53-63.13 and intermediate rising trend line support levels respectively. Thus the pair is expected to trade within a confined range of 71.70 to 72.10.

EUR/INR

EURINR started rebound after taking supports around 81.15 which is a long term trend rising trend line support levels. At present, the prices are trading below the 8, 13 weekly EMA levels (83.50.83.80). In the coming week, prices are expected to move higher towards the resistance levels of 83.50 to 83.80. It had failed to sustain below previous top of 81.78 and also it is coinciding with the Fibonacci 23.6% support levels of the range 67.98-85.97. In the mentioned price chart, it is visible that prices have formed a reversal candle stick pattern (Hammer). Thus we are expecting pair to trade within a range of 81 to 83.50. We recommend buying at 81.70-81.60 TP 83.50 SL 81.00

GBP/INR

As on 16th November 2018, GBPINR prices are trading around 92.39 down by 1.7% from the previous week’s closing price of 94.02. At present prices are trading below the weekly 8, 13 EMA levels (93.50, 94.75). Also prices are trading below the Fibonacci 23.6% 93.95 of the range 98.53-79.12, and previous tops. The Momentum indicator RSI-14 is treading around 40.00 has a potential to move lower. While combining above technical clues, we are expecting pair to fall up to 91.12 levels after a mere pullback towards the 93.36 levels weekly midpoint.

JPY/INR

As on 16th November 2018, JPYINR prices are trading around 63.78, marginally higher from the previous week’s closing price. Prices are trading below the weekly EMA 8, 13 levels (64.30, 64.50). The pair is moving in between 23.6% (63.88) and 38.2% (62.33) of the range 55.77-66.39. Long term trend line is providing supports around 63.58 levels. The weekly momentum indicator RSI-14 is trending around 47.00 at a neutral phase. Overall the pair is expected to move in a range of 62.90-64.50

TECHNICAL RECOMMENDATIONMARKET STANCE

Finally, softer crude prices brought the much needed relief to the Indian Importers and cheer to the individuals who are planning to travel abroad this Christmas season. The Indian rupee gained as much as one rupee against the US dollar during the week ended 16 Nov. The recent gains in Rupee can be attributed to softer crude prices which plummeted by more than 20% in the last six weeks. Dollar Index remained elevated early during the week before dropping lower during the mid-week as Euro and Pound gained ground on the back of positive outcomes from Brexit negotiations. Euro edged higher marginally despite the looming dark clouds over Brexit issues, as the concerns about the Italian Budget standoff eased. The gains were limited as EU chief negotiator Michel Barnier cautioned that the road to ensuring a smooth UK exit was still long and potentially difficult. It was all attention to Brexit yet again with the UK’s political tensions heightened. Despite the Cabinet’s support to the draft EU/UK withdrawal proposals, markets saw Cabinet and junior ministerial resignations and more calls from Conservative MPs asking for a leadership challenge.

NEWS FLOWS OF LAST WEEK

• India trade deficit in October widened from a five month low in September after crude oil imports coupled with a depreciating rupee weighed on the nation’s trade book.

• Trade Deficit stood at $17.13 billion compared with $14.61 billion in same month last year.

• Reports out of Italy that PM Giuseppe Conte was looking to work with the EU over his government’s 2019 budget, which has been rejected by Brussels, to avert massive fines had helped support to Italian government bond markets and the euro.

• Sterling plummeted after British Minister resigned in protest against a draft Brexit agreement. The losses in GBP marginally faded as the British PM Theresa May said she won the backing of her senior ministers for a draft divorce deal.

• Yen gained as geo political tensions spooked the investor’s sentiment demanding safe haven. Investors rushed to the safe havens as the political tension in UK heightened after multiple resignation from UK ministers.

• Signs of global weakness are growing as Japan, the world’s third-largest economy, contracted in the third quarter, hit by natural disasters and a decline in exports, a worrying sign that trade protectionism is starting to take its toll on overseas demand.

CURRENCY

CURRENCY TABLE

Currency Pair Open High Low Close

USDINR 72.72 73.07 71.71 71.92

EURINR 82.38 82.54 51.26 51.47

GBPINR 94.12 94.25 91.71 92.08

JPYINR 63.80 64.08 63.18 63.48


ECONOMIC GAUGE FOR THE NEXT WEEK

Date Time Country Indicator Name Period Poll Unit Prior Prior

17-Nov 02:30 United States Net L-T Flows,Exswaps Sep USD 131.8B 8.3

17-Nov 02:30 United States Foreign Buying, T-Bonds Sep USD 63.1B 1380

17-Nov 02:30 United States Overall Net Capital Flows Sep USD 108.2B 13.2

17-Nov 02:30 United States Net L-T Flows,Incl.Swaps Sep USD 111.5B 2.9

19-Nov 14:30 Euro Zone Current Account NSA,EUR Sep EUR 20.5B -19.4

19-Nov 14:30 Euro Zone Current Account SA, EUR Sep EUR 23.9B 107.9

19-Nov 15:30 Euro Zone Construction Output MM Sep Percent -0.46% 119

19-Nov 20:30 United States NAHB Housing Market Indx Nov 68 Index 68 0.1

20-Nov 19:00 United States Building Permits: Number Oct 1260000 Number of 1.270M 6.1

20-Nov 19:00 United States Build Permits: Change MM Oct Percent 1.7% -4

20-Nov 19:00 United States Housing Starts Number Oct 1225000 Number of 1.201M 316.2

20-Nov 19:00 United States House Starts MM: Change Oct Percent -5.3% 213.6

20-Nov 19:25 United States Redbook MM 12 Nov, w/e Percent 0.2% 861.8

20-Nov 19:25 United States Redbook YY 12 Nov, w/e Percent 6.1% 5.15

21-Nov 03:00 United States API weekly crude stocks 12 Nov, w/e Number of 5.783

21-Nov 03:00 United States API weekly gasoline stk 12 Nov, w/e Number of -3.465

21-Nov 03:00 United States API weekly dist. stocks 12 Nov, w/e Number of 1.852

21-Nov 03:00 United States API weekly heating oil 12 Nov, w/e Number of 0.275

21-Nov 03:00 United States API weekly crude imports 12 Nov, w/e Number of 0.005

21-Nov 03:00 United States API weekly product imports 12 Nov, w/e Number of -0.178

21-Nov 03:00 United States API weekly crude runs 12 Nov, w/e Number of 0.205

21-Nov 03:00 United States API Cushing number 12 Nov, w/e Number of -0.02

21-Nov 17:30 United States MBA Mortgage Applications 16 Nov, w/e Percent -3.2% -0.009

21-Nov 17:30 United States Mortgage Market Index 16 Nov, w/e Index 316.7 0.6

21-Nov 17:30 United States MBA Purchase Index 16 Nov, w/e Index 220.8 2.419

21-Nov 17:30 United States Mortgage Refinance Index 16 Nov, w/e Index 824.7 -0.65

21-Nov 17:30 United States MBA 30-Yr Mortgage Rate 16 Nov, w/e Percent 5.17% 5.4

21-Nov 19:00 United States Durable Goods Oct -2.5 Percent 0.7% 5.8

21-Nov 19:00 United States Durables Ex-Transport Oct 0.4 Percent 0.0% 9.2

21-Nov 19:00 United States Durables Ex-Defense MM Oct Percent -0.7% 6.4

21-Nov 19:00 United States Nondefe Cap Ex-Air Oct 0.3 Percent -0.1% 4.23

21-Nov 19:00 United States Initial Jobless Claims 17 Nov, w/e 215000 Person 216k 157972

21-Nov 19:00 United States Jobless Claims 4-Wk Avg 17 Nov, w/e Person 215.25k 1.5

21-Nov 19:00 United States Continued Jobless Claims 10 Nov, w/e Person 1.676M 0.4

21-Nov 20:30 United States Existing Home Sales Oct 5210000 Number of 5.15M 0.2

21-Nov 20:30 United States Exist. Home Sales % Chg Oct 1 Percent -3.4% 0.12

CURRENCY


ECONOMIC GAUGE FOR THE NEXT WEEK

Date Local Time Country Indicator Name Period Poll Prior Unit Prior

21-Nov 20:30 United States Leading Index Chg MM Oct 0.1 Percent 0.5% 251.99

21-Nov 20:30 United States U Mich Sentiment Final Nov 98.3 Index 98.3 0.2

21-Nov 20:30 United States U Mich Conditions Final Nov Index 113.2 62.53

21-Nov 20:30 United States U Mich Expectations Final Nov Index 88.7 214

21-Nov 20:30 United States U Mich 1Yr Inf Final Nov Percent 2.8% 213.75

21-Nov 20:30 United States U Mich 5-Yr Inf Final Nov Percent 2.6% 1.623

21-Nov 21:00 United States EIA- Nat Gas, Change Bcf 16 Nov, w/e Cubic foot 39B 7.9

21-Nov 21:00 United States Nat Gas-EIA Implied Flow 16 Nov, w/e Cubic foot 39B 11.7

21-Nov 21:00 United States EIA Weekly Crude Stocks 16 Nov, w/e Barrel 10.270M 673.92

21-Nov 21:00 United States EIA Weekly Dist. Stocks 16 Nov, w/e Barrel -3.589M 21.1

21-Nov 21:00 United States EIA Weekly Gasoline Stk 16 Nov, w/e Barrel -1.411M 0.5

21-Nov 21:00 United States EIA Weekly Crude Imports 16 Nov, w/e Barrel 0.268M 0

21-Nov 21:00 United States EIA Weekly Rfg Stocks 16 Nov, w/e Barrel -0.003M 22.2

21-Nov 21:00 United States EIA Weekly Heatoil Stock 16 Nov, w/e Barrel -0.308M 33.8

21-Nov 21:00 United States EIA Weekly Prods Imports 16 Nov, w/e Barrel/Day -0.263M 25.2

21-Nov 21:00 United States EIA Weekly Dist Output 16 Nov, w/e Barrel/Day 0.030M 19.5

21-Nov 21:00 United States EIA Weekly Crude Runs 16 Nov, w/e Barrel/Day 0.024M 38.2

21-Nov 21:00 United States EIA Weekly Refining Util 16 Nov, w/e Percent 0.1% 19.3

21-Nov 21:00 United States EIA Wkly Crude Cushing 16 Nov, w/e Barrel 1.167M -0.1

21-Nov 21:00 United States EIA Weekly Gasoline O/P 16 Nov, w/e Barrel/Day 0.342M 0.1

22-Nov 00:00 United States EIA Ethanol Ref Stk 12 Nov, w/e Barrel 23,514k 0

22-Nov 00:00 United States EIA Ethanol Fuel Total 12 Nov, w/e Barrel per day 1,067k 0.5

22-Nov 11:30 United States TG TEST 2 IGNORE Feb EUR 4.72

22-Nov 20:30 Euro Zone Consumer Confid. Flash Nov -3 Net balance -2.7 0.5

23-Nov 14:30 Euro Zone Markit Mfg Flash PMI Nov 52 Index (diffusion) 52.0 -0.1

23-Nov 14:30 Euro Zone Markit Serv Flash PMI Nov 53.5 Index (diffusion) 53.7 76.01

23-Nov 14:30 Euro Zone Markit Comp Flash PMI Nov 53 Index (diffusion) 53.1 0.5

23-Nov 20:15 United States Markit Comp Flash PMI Nov Index (diffusion) 54.9 2.2

23-Nov 20:15 United States Markit Mfg PMI Flash Nov 55.7 Index (diffusion) 55.7 0.3

23-Nov 20:15 United States Markit Svcs PMI Flash Nov 55 Index (diffusion) 54.8 111.5

CURRENCY


Morning Activity at Ghaziabad

DEMATERIALISATIONIS MANDATORY

As per the notification issued by Ministry of Corporate Affairs, unlisted companies cannot issue physical shares from 2nd October, 2018. They have to issue shares in demat form only.

• Buyback, bonus issue and rights issue cannot be issued by these companies unless securities of company’s promoters, directors, etc. are in dematerialised form.

• Any investor who holds shares in unlisted companies has to get it dematerialised if he wants to transfer shares

• Any investor who wants to buy shares through private placement or avail bonus shares and rights issue has to hold shares in dematerialised form.

All unlisted companies are required to secure ISIN from CDSL or NSDL for each type of security.

Karvy being a pioneer in the financial realm since 3 decades and providing depository and RTA services as well can facilitate the process of dematerialisation of existing shares and also offer demat account opening facility.

Q. What is the main objective of a Demat account?

The main objective of a demat account is to facilitate easy trade and transfer of the shares and also enable an investor to get the benefits of corporate actions like bonus shares, dividend, rights issue, etc.

Q. How many accounts can I have?

• You can open more than one Demat Account.

• You can hold shares, debentures, bonds, NSC, KVP in a single Demat Account.

• You can save charges on multiple accounts by consolidating your holdings into one account, if there are no other compelling reasons to keep separate accounts.

Q. Can I take a loan on my demat holding?

1. Yes, you can pledge the securities in your account in favor of a lender to avail a loan.

Q. Is there nomination facility in Demat Account?

• Nomination can be made only by individuals holding beneficiary accounts either singly or jointly.

• The Nominee needs to complete a few formalities with DP and get the securities transferred into his/her account.

STEPS TO TRANSFER SHARESFROM ONE DEMAT ACCOUNT TO ANOTHER

Fill the DIS form & submit to your current broker

Your broker will send request to

depository (NSDL/CDSL)

Depository shall transfer the shares to your new Demat

Account

Shares shall reflect in your new Demat

Account

Investor surrenders the physical certificates to the DP

DP informs the

Depository about the request

DP submits the certificates to the Registrar of the issuer company

Registrar communicates

with the depository to confirm the

request

Dematerialization of the certificates

is done by the Registrar

Registrar informs the

depository about completion of

dematerialization

1 2 3 654

STEPS TO CONVERT PHYSICAL SHARES TO DEMAT

Q. Do I have to contact all companies for any updation in my personal details?

For your demat shares, your one point contact for all the changes/updation is DP.

Q. What precautions should I take to prevent misuse of securities lying in my account?

• Keep DIS book in safe custody.

• When writing an instruction on the DI Slip, strike-out the empty spaces.

• Change your password frequently if you are using internet facility for your Demat Account.

• Before giving Power of Attorney (POA) to any person operating your Demat Account, understand the contents and implication of such POA.

Q. How much do I pay for my Demat Account?

1. You can pay Rs. 650 as an account opening fee and enjoy many exclusive offers*.

Q. Whom should I contact in case of any queries?

1. You can call on our toll free no 18004198283 or write a mail at [email protected].

Q. What all documents are required to Open Demat Account?

1. To open a demat account, you need a mobile number linked to Aadhaar, active mobile number, PAN card, digital signature, cancelled personalized cheque.

Q. What if I already have a Demat account with another Depository Participant?

You can open a trading account with us and link it to your existing demat account. Alternately, you can open a new trading and demat account with us, transfer your securities and funds to the new account and close the older account.

Q. Things to check before Opening Demat Account

Before opening a demat account, one should always check the brokerage charges, annual maintenance charges, any other charges if applicable, technology and trading platforms and other supporting value-added features and customer services.

Q. Various Types of Demat Account

At Karvy, we offer customized solutions to meet every investor’s unique requirements. You can opt for only demat or only trading account, demat and trading account with access to trading equity, commodity, currencies, mutual funds and other exchange-traded securities.

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