RULE THE MARKET - content.karvyonline.comcontent.karvyonline.com/contents/kstreetissue015.pdf · From The Desk Of Research Head. Disclaimer: Karvy Stock Broking Limited [KSBL] is

ISSUE: 015

15TH DECEMBER, 2018

RULE THE MARKET

From The Desk Of Research Head

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The recent slide in Bitcoin showcases the burst bubble

The rise and fall of Bitcoin

Identifying the illogical soaring of bitcoin prices, the Indian regulators did the right thing by keeping

the bitcoin at bay which helped the investors from incurring steep losses. After reaching a peak of

$17,900 in December 2017, the price of bitcoin has fallen towards $3350 recently, losing over 80% in

value in just one year. Even though the initial rally was fuelled by optimism regarding wider acceptance

of the crypto-currency, speculators entered the ring within the second part of the last year, inflicting a

fad that resembled the Tulip mania of the 1600s. However, the absence of an underlying asset backing

for the cryptocurrency propelled its downfall losing 4/5th of its value from its all-time high.

How were most Indian Investors saved from this gamble?

The regulators, as well as the Government of India, had kept a vigilant eye on crypto-currencies and

had been informing the investors regularly. In two occasions prior to 2018, the Central bank issued a

warning against the cryptocurrencies. However, it was the Centre that took the primary step in putting

an end to the floating of these assets through the Budget 2017-18 ruling that bitcoin isn’t a monetary

system in India. However, SEBI maintained a distance from passing any rules or guidelines against

crypto-currencies because it viewed that they fall under the purview of the Central bank. As a result,

the regulator’s silence was taken as consent by the crypto traders which turned out to mushroom

various unregulated cryptocurrency trading exchanges. These developments prompted some

investors taking positions in bitcoin prior to its all-time high in December 2017 and continued until the

budget 2017-18 budget announcement. However, the Central bank later banned all the entities and

businesses that dealt in crypto-currencies halted the cryptocurrencies’ trading in India finally.

Is it worth investing now at current levels by any other means?

Even though it was a bit late, the ban on bitcoin was absolutely timely. The recent slide in bitcoin value

makes a clear picture that they’re not suitable for investment and wealth creation for retail investors. It

adds sound to the previous statement by taking Warren Buffet’s following words into consideration in

two different interviews, “Unlike buying stocks, bonds or real estate, buying bitcoin is not an investment.

If you buy something like bitcoin or another cryptocurrency, you don’t have anything that is producing

anything. You’re just hoping the next guy pays more. And you only feel you’ll find the next guy to pay

more if he thinks he’s going to find someone that’s going to pay more. This is not an investment, this is

speculation. Bitcoin is a method of transmitting money. It’s a very effective way of transmitting money

and you can do it anonymously. A check is a way of transmitting money too. But are checks too worth

a whole lot of money just because they can transmit money?. Considering the previous episodes, the

investor’s watchdog, SEBI also need to spell out its stance on these crypto assets so as to forestall a

repeat of such episodes. However, these cryptocurrencies aren’t utterly useless, they will be effective

as a medium of exchange, provided they’re well regulated. The recent Central Bank’s move to form a

committee to explore the practicability of rupee-backed digital currency seems to be an honest plan

for their domestic use.

CONTENTSEquity 1-6

Derivatives 7-8

Commodity 9-12

Currency 13-14

Events 15

TeamDr. Ravi Singh

Syed Hasan Jafar

Viplav Dhandhukia

Amrita Preetam

Amit Samar

Chirag M Solanki

Chetan K Waghray

Vaishali Paruthi

Pankaj Wadhwani

Benjamin Francis

Munindra Upadhyaya

Yash Bhotika

Sarath Jutur

Konpal Pali

Thomas Abraham

Vivek Ranjan Misra

Veeresh Hiremath

Arpit Chandna

Ravi Pandey

Anup. B.P

Amit Kumar

Ramesh Chenchala

Siddhesh Ghare

Bharath Sunnam

Ravikanth Pedapati

Karvy Head Office

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Analyst CertificationThe following Karvy Research Desk, who is (are) primarily responsible for this report and whose name(s) is/ are mentioned therein, certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.

- DR. RAVI SINGHHead-Technical & Derivatives Research

EQUITY

Economy

• The Finance minister Arun Jaitley Thursday admitted there were two-three areas of differences with the Reserve Bank (RBI), but questioned how a mere discussion on its functioning could be considered “destruction” of an institution.

• The government has no proposal to change the existing foreign direct investment (FDI) policy in the multi-brand retail trading sector

• India is likely to defer retaliatory duty against the US on the import of 29 products worth USD 235 million for the fourth time to January 31, 2019.

Automobile

• Tata Nissan India has announced plans to hike prices of passenger vehicles by up to 4% from 1st January, across all available models for Nissan and Datsun.

BFSI

• NCLT approved amalgamation of Capital First and its two arms Capital First Home Finance and Capital First Securities with IDFC Bank.

• HDFC will raise up to Rs. 15bn by issuing bonds on a private placement basis. The ‘HDFC Series U-006 18th June 2020’ secured redeemable non-convertible debentures will open for subscription on December 17 and close the same day, HDFC said in a regulatory filing Thursday.

• The government is considering additional capital infusion of up to 300 bln rupees in public sector banks as they have been unable to raise required funds from the markets.

Aviation

• The Federation of Indian Airlines, an aviation industry body has urged the civil aviation ministry to allow an additional month of unsecured credit for aviation turbine fuel and airport charges.

Metals

• The Government will auction two iron ore mines in Odisha to meet the shortage.

• NMDC Ltd’s iron ore production in Apr-Nov was 18.76 mn tn and sales were 19.30 mn tn. The company’s Apr-Nov iron ore production in Chhattisgarh was 12.24 mn tn, and sales were 13.78 mn tn, while production in Karnataka was 6.52 mn tn, and sales were 5.52 mn tn.

Telecom

• The Telecom Disputes Settlement and Appellate Tribunal has quashed the telecom regulator’s definition of “significant market power” and “predatory pricing” that was issued in the amendment to a tariff order in February.

• The Telecom Regulatory Authority of India has cut the time required to change an operator, while keeping the same number, to just two to four days from seven days earlier.

Pharma

• Lupin Ltd received tentative approval from the US Food and Drug Administration to market dimethyl fumarate delayed-release capsules, in 120-mg and 240-mg strengths.

• Sun Pharmaceutical Industries stated that promoter Raksha Valia had pledged 8.78 mln shares or 0.37% stake with three different entities. The company said that the lien on 1.5 mn shares owned by Valia, which were pledged with Citicorp Finance India Ltd, had been released on Monday.

Oil and gas

• The Indian Oil Corp Ltd will buy back up to 297.65 mn shares at 149 rupees apiece. The company will spend up to 44.35 bn rupees in the share buyback that will take place through the tender offer route.

NEWS

INTERNATIONAL NEWS

• The Indian Tea Association (ITA) and China Tea Marketing Association (CTMA) have signed a memorandum of understanding to promote green and black tea consumption in major tea markets of Europe, the U.S., Russia and West Asia, besides India and China.

• The Freight prices for containers going from China to the U.S. have surged over 100% from a year ago as of the beginning of December, according to data from Freightos, an online freight marketplace.

• China confirms it will suspend its additional 25% tariff on imports of the U.S. autos.

• Japan will allow unskilled foreigners to work in 14 sectors such as construction and elderly care for up to five years.

TREND SHEETSymbol CMP S2 S1 R1 R2 TREND

SENSEX 35962.93 33826 34894 36564 37164 Up

NIFTY 10805.45 10155 10480 10985 11164 Up

NIFTYBANK 26826 25106 25966 27319 27811 Up

YESBANK 180.35 145 163 196 211 Down

RELIANCE 1,112.20 1025 1069 1142 1171 Down

KOTAKBANK 1,255.95 1120 1188 1307 1358 Up

SUNPHARMA 420.65 372 396 439 458 Down

ICICIBANK 351.90 329 341 359 366 Down

IBULHSGFIN 792.90 614 704 844 894 Up

SBIN 289.20 258 274 299 310 Up

MARUTI 7,662.15 6981 7321 7851 8041 Up

AXISBANK 620.25 563 592 637 654 Up

HDFCBANK 2,095.70 1991 2043 2136 2177 Up

FORTHCOMING EVENTSCOMPANY NAME EX DATE PURPOSE RECORD DATE

BOSCH LTD. 20-DEC-18BUY BACK OF

SHARES 21-DEC-18

SKF INDIA LTD. 20-DEC-18BUY BACK OF

SHARES 21-DEC-18

INDIAN OIL CORPORATION LTD.

21-DEC-18BUY BACK OF

SHARES 25-DEC-18

DHARAMSI MORARJI

CHEMICAL CO.LTD.20-DEC-18

INTERIM DIVIDEND - RS. - 0.50

21-DEC-18

INDIAN OIL CORPORATION

LTD.21-DEC-18

INTERIM DIVIDEND - RS. - 6.75

25-DEC-18

CAPITAL INDIA FINANCE LTD.

18-DEC-18RIGHT ISSUE OF EQUITY SHARES

19-DEC-18

KSTREET - 15TH DECEMBER 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

0

0.5

1

1.5

2

2.5

3

3.5

4

Nifty 50 SENSEX BSE MidCap

BSE SmallCap

Nifty Next 50

NIFTY Midcap 100

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

NSEA

UTO

NSEBA

NK

NSESRV

NSEPH

RM

NSEIT

NSEM

ET

NSEN

RG

NSEC

ON

NSEREA

L

NSEFM

CG

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

3

NA

SDA

Q

DO

W JO

NES

S&P50

0

NIK

KEI

HA

NG

SENG

SHA

NG

HA

I CO

MP

FTSE 100

CA

C 40

-20

-15

-10

-5

0

5

10

15

20

25

30

PC JEW

ELLER LTD

LARSEN

& TO

UBRO

IN

FOTEC

H LTD

DISH

TV IN

DIA

LTD

QU

ESS CO

RP LTD

BAN

K O

F IND

IA

GRA

PHITE IN

DIA

LTD

DILIP BU

ILDC

ON

LTD

RELIAN

CE IN

FRASTRU

CTU

RE LTD

JUBILA

NT LIFE SC

IENC

ES LTD

VA

KRA

NG

EE LTD

-6

-4

-2

0

2

4

6

8

10

12

IND

IABU

LLS HO

USIN

G

FINA

NC

E L

IND

IAN

OIL C

ORP LTD

YES BAN

K LTD

HERO

MO

TOC

ORP LTD

BHA

RAT PETRO

LEUM

CO

RP LTD

KO

TAK

MA

HIN

DRA

BAN

K

LTD

RELIAN

CE IN

DU

STRIES LTD

HO

USIN

G D

EVELO

PMEN

T FIN

AN

CE

JSW STEEL LTD

DR. RED

DY'S LA

BORA

TORIES

-1000

-500

0

500

1000

1500

2000

2500

07-12-18

08-12-18

09-12-18

10-12-18

11-12-18

12-12-18

FII/FPI DII


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Zensar Technologies CMP Rs.240Target Price Rs.269Upside 12%

Investment Rationale

• Revenue visibility improved aided by bottoming out of retail vertical and ramp up of large deals won in the recent past.

• Focus on retail, insurance and hi-tech verticals – which are prone to higher technical disruption.

• Focus on beefing up go-to-market strategy gives confidence of sustained deal momentum.

• We are confident that ZENT with its digital-led strategy and focus on high growth high potential verticals and geographies is set to embark its journey on a high growth path.

• ZENT has demonstrated its digital capabilities by transforming into a 100% living digital enterprise. This strategy has enabled it to revamp its go-to-market strategy and showcase its digital offerings on the go. The success of this strategy is visible in the large deals it announced recently- worth $800 mn over the past 18 months – the highest ever in the company’s history.

• This coupled with its focus on RoD Next offerings and digital-led strategy are expected to bode well for the company’s future growth strategy.

VALUE PARAMETERSFace Value (Rs.) 10.0

52 Week High/Low (Rs.) 352/146

M.Cap (Rs. Bn/US $mn) 3480/48

EPS (Rs.) 10.6

P/E Ratio (times) (FY20E) 12.9

Dividend Yield (%) 5.0%

Stock Exchange BSE

P/E CHARTValuation

We remain positive about the company based on improved revenue visibility aided by bottoming out of retail vertical, ramp up of recent large deal wins and expectation of sustained deal momentum aided by its RoD-based offerings.

We believe that ZENT’s margins will improve aided by operational efficiencies and higher IMS margins post-restructuring. Hence, we recommend a “HOLD” with a target price of Rs. 269 and an upside potential of 12%.

Risks

Key risks include concentration risk as a result of ZENT’s focused approach and revival in margins may take longer than expected as the company is currently in an investment mode.

EQUITY

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 18 FY 19 FY 20

REVENUE 31077 39232 43547

EBITDA 3729 4699 6532

EBITDA(%) 12.0 12.0 15.0

PAT 2416 3013 4181

EPS (Rs.) 10.6 13.4 18.6

RoE (%) 15.4 16.8 20.0

PE (x) 16.9 17.9 12.9


BEAT THE STREET - FUNDAMENTAL ANALYSIS

Relaxo Footwears LtdCMP Rs.724Target Price Rs.911Upside 26%

Investment Rationale

• In the listed space, Relaxo has been a consistent performer in the last 5 years. Relaxo – which focuses on providing higher quality footwear at competitive prices in the low price region, have managed to widen their reach and improve volumes.

• Consequently, Revenue has grown at 14%, and operating margins have improved by 458 bps, leading to 29% CAGR growth in PAT over the same period.

• Since 2012, the company has increased focus on brand building via celebrity endorsements. Additionally, it has also increased pace in rolling out of brand stores. Currently, Relaxo has 311 brand retail outlets. It also spends about 4.5% of its revenues on advertisements, which is higher than its immediate peers in the listed space.

• Tapping into the urban market, the company has launched casual and regular sportswear in the branded category through Sparx. Currently, Sparx is believed to constitute ~10% of total volumes. Aided by the increased acceptance of these higher value products, realizations have improved by ~5% CAGR in the last 5 fiscals.

• Backed by improving realization and growing customer base (across rural and urban India), we expect top and bottom line to grow by 16.3% and 21.1% CAGR over FY18-21E.

VALUE PARAMETERSFace Value (Rs.) 1.0

52 Week High/Low (Rs.) 874/564

M.Cap (Rs. Bn/US $mn) 87.24/1.21

EPS (Rs.) 13.4

P/E Ratio (times) (FY20E) 30.0

Dividend Yield (%) 0.2

Stock Exchange NSE

ValuationConsistent performance has led to improvements in valuations by 4x over the past 5 fiscals. We expect the growth trend to continue, and value the stock at 38x (at a premium to its 5 year average 2 year fwd P/E of 30x), on FY21E EPS of 24 and arrive at a target price of Rs. 911. We believe the premium valuation is warranted, given the high growth expected in the coming fiscals and the brand building efforts being undertaken.

RisksKey risks to the call are difficulties in penetrating into the online category, and intensified competition from unorganized players.

EQUITY

P/E CHART

% OF SHARE HOLDING

in Rs.Mn ACTUAL ESTIMATE

YE Mar FY 18 FY 19 FY 20

REVENUE 19644 22984 26661

EBITDA 3021 3482 4103

EBITDA(%) 15.4% 15.1% 15.4%

PAT 1611 1947 2353

EPS (Rs.) 13.4 16.2 19.6

RoE (%) 23.6% 23.1% 22.9%

PE (x) 48.6 44.7 36.9


EQUITY

BEAT THE STREET - TECHNICAL ANALYSIS

Bajaj Finance Ltd

BAJFINANCE has been in the secular uptrend on the weekly charts making higher highs and higher lows. The stock has witnessed profit taking from its all-time high near 2994 levels and found support near its 21 period moving average on the monthly chart which is placed around 1900 levels. The historical price action reflects that the stock has respected the said moving average and bounced well from the same. The bounce that the stock has seen from its 21 period moving average has seen higher volumes, suggesting accumulation taking place in this counter. On the momentum oscillator front, the 14 period RSI is placed above the 9 period signal line on the daily as well as weekly charts and pointing northwards, suggesting strength in the near term. The major support for the stock is seen around its short to medium term moving averages on the daily chart placed near 2390 levels, breaching which it may find its next support around its long-term moving average on the daily chart which also coincides with the swing support for the stock placed near 2230 levels. The stock is trading above all of its major moving averages on the daily, weekly as well as monthly charts, indicating positive momentum in the counter for all major time frames. The recent price action suggests that strong hands are accumulating the stock at lower levels. Considering all the above data facts, we recommend entering the stock at the current levels for the potential targets of 2920-2990 levels. And any correction towards 2390 levels can be utilized to average the stock keeping strict stop loss placed below 2230 levels.

Tata Chemicals Limited

TATACHEM is trading resiliently since its previous swing low at 622 levels and has witnessed a bullish divergence with the current up move in the daily charts with decent volumes. As the bullish divergence started to unfold, the stock has also witnessed a crossover of 50 day EMA levels at 690 levels which are a positive confluence and confirmation, indicating the buying interest in the stock. Among the leading indicators, CCI (15) and Heiken candlesticks indicate a positive trend in the daily chart as well as the weekly charts. RSI (14) and Stock (5,3,3) indicators in daily chart is showing bullish bias, indicating stronger hands are accumulating the stock on every dip.

On the momentum setup, weekly MFI (10) is pointing northwards after giving a positive crossover with the signal line and, in the daily time frame, the oscillator bounced off taking the support of 25 levels, reaffirming underlying strength in the counter. Daily MACD (12, 26, 9) as well is trading above the zero line on the charts, indicating the inbuilt strength in the counter. Considering all the above data, we recommend traders to enter the stock at the current levels for the higher targets of 770 followed by 800 levels and any correction towards 655 levels can be utilized to average the stock keeping a stop loss below 620 levels on closing basis.

Stock BAJFINANCE

CMP 2486

Action BUY

Entry 2470

Average 2390

Stop loss 2200

Target 2970

Target 2 3050

Time Frame 6-9 Months

Stock TATACHEM

CMP 687

Action BUY

Entry 680

Average 645

Stop loss 600

Target 800

Target 2 840

Time Frame 6-8 Months


EQUITY

Sentiment

Stop Loss 318

Target 273

Lot Size 1500

Margin 77100

21-DEMA 314

Open Interest Shares 49845000

Change in OI 837000

Cost of Carry (%) 11.02

SECTORAL SNIPPETS

NIFTY BANK (26,826) underperformed Nifty with a gain of 0.87% during the week passed by, while the broader index Nifty gained 1.05%. During the week, the index gained after making a swing low at 25,598 levels and surpassed the crucial 26,659 resistance levels. The index saw a bullish rally after the new RBI governor Shaktikanta Das said that he would take a more consultative approach and move quickly to address some of the pressing issues. The markets ignored the sudden resignation of Urjit Patel, perhaps because it might lead to a more liberal monetary policy with the appointment of Shaktikanta Das as the new Reserve Bank of India Governor. Considering the positive bias in the index, market participants may stay long with a bullish bias until unless 26,400 levels are breached. On the stock specific front, most of the index stocks closed in green except a few. PNB, FEDERALBNK, YESBANK, IDFCBANK and RBLBANK gained 10.15% to 5.18% during the week. On the other side, KOTAKBANK lost 1.81% with respect to the weekly closing basis. Technically, BankNifty may face crucial resistance at 27,000 and 27,200 levels. For the week ahead, support for the index can be pegged at 26,500 levels followed by 26,400 levels. On the momentum setup, 60-period weekly CCI is plotting above its +100 line, indicating an underlying bullishness in the index. However, we expect a subdued movement in the index if it falls below the 26,400 levels.

NIFTYAUTO (9271.50) outperformed Nifty 50 index on weekly basis and ended the week in green with gains over 4.5%, which was majorly due to the gains in the heavyweight counters like HEROMOTOCO, MOTHERSUMI, BOSCHLTD, TATAMOTEICHERMOT and TVSMOTOR which gained 8.06%, 7.56%, 6.19%, 5.94%, and 5.08%, respectively. Technically, the support zone of 8650 is also the swing support zone played a crucial role and reverted the trend for the index from where it started to rally upwards, indicating bulls had taken control in the counter at the lower levels. On the daily chart, the stock is placed below the medium moving average, indicating inherent weakness and the downside may be expected near the recent swing low placed around 8950 levels, which would play a crucial role for supporting the index. On the weekly chart, 14 periods RSI is on the verge to witness short-term plunge as it has been placed near the oversold zone of 40-41 levels, affirming weakness in the counter. The immediate support for the index is placed around 8950 levels followed by 8735 levels, while on the contrary the resistance is pegged around 9300-9350 levels followed by 9500 levels. For the coming week, stock specific action can be witnessed; however, it is advisable to trade cautiously in the counter tracking the support and resistances for the stocks.

NIFTYFINSE (11327.60) saw inline movement with Nifty and generated positive return of around 0.08%, while Nifty closed the week with a positive return of around 1.02%. The index was under pressure after making high of 11,517 levels. It had dragged to the low of 10,837.60 levels and bounced from the said levels. The index is trading above all its major moving averages on the daily charts. Most of the stocks from the financial space were seen trading comfortably last week. The immediate support in the index comes around 11,200 levels and below that are 11,050 levels. The index may find resistance around 11,525 levels and above that are 11,700 levels. Most of the stock from the sector has closed the week in green and generated positive return like BAJAJFINSV, BHARATFIN, ICICIPRULI, IBULHSGFIN and M&MFIN closed the week with a positive return of around 5.18%, 3.10%, 10.05%, and 8.20%, respectively. Whereas, the stock like HDFC and BAJFINANCE has closed the week in red and generated negative return of around 2.40% and 0.40%. However, the index is expected to trade with sideways tone for the coming week.

NIFTY REALTY (237.20) ended the week on a gain of around 2.80%, outperforming NIFTY-50 which closed with a gain of around 1.01%. The breadth of the REALTY index was also positive as 8 stocks out of 10 stocks in the index ended on a positive note while 2 stocks ended on a negative note. Stocks which gained in the last week were HDIL, IBREALEST, PRESTIGE, BRIGADE, DLF, PHOENIXLTD, SOBHA, and GODREJPROP which gained around 11.29%, 10.79%, 7.74%, 3.38%, 3.13%, 2.53%, 2.47%,and 1.70%, respectively, while OBEROIRLTY, and UNITECH lost 0.35%, and 2.33%, respectively. Technically, the said index is trading well above its daily 20-day simple moving average but below its 20- week simple moving average. The weekly & daily 14-period RSI is trading above its 9 periods EMA, indicating a bullish bias in the near term. Going ahead for the coming week, the index has support at 230 levels and below it at 220 levels, while resistance is pegged at 242 levels and above it at 248 levels.

BATA INDIA LTD: BUY BATAINDIA (DEC FUTURE) | CMP: 1090.45 SECTOR: CD

BATAINDIA gained 2.52% during the week. The stock witnessed a strong rally from 653.10 levels to 1115.70 levels and started to correct from these levels. However, the stock has found support at 1115.70 which is 200 EMA in daily chart and 61.80% Fibonacci retracement levels of the said rally on a closing basis and started to up move. The stock is in an uptrend from this support levels as making higher high and higher low in the daily charts. The stock is trading well above 21/50/100/200 DEMA levels, indicating strength in the counter for all major time frames supporting our bullish bias. The price has taken the support of mean and is moving towards the upper band of Bollinger band (20, 2) in the daily chart, supporting our bullish conviction about the stock. We expect the stock outperform in the near term. Hence, we recommend smart traders to initiate a Long position on dips around 1080 levels with a stop loss placed below 1028 for the target of 1145 levels.

Sentiment

Stop Loss 1028

Target 1145

Lot Size 550

Margin 105500

21-DEMA 1036

Open Interest Shares 2064700

Change in OI 255200

Cost of Carry (%) -2.19

JSW STEEL LTD: SELL JSWSTEEL (DEC FUTURE) | CMP: 294.25 SECTOR: METALS

JSWSTEEL is our preferable bet from the metal sector for short. The stock is in a downtrend and making lower lows and lower highs on the daily charts. The stock has underperformed Nifty metal last week and generated a negative return of 3.14%. Whereas, Nifty metal generated a positive return of around 1.56%. The stock has given a breakdown around 300 levels and closed the week well below the same. Before that, the stock has seen a sharp fall from the recent life high of around 428 levels. The fall in the stock has seen supportive volume formation on the daily and weekly charts. The stock is trading below all its major moving averages on the daily charts, which indicates weakness in the counter. On technical setup, the stock is pointing southwards after giving a negative crossover with a signal line, indicating weakness in the stock will remain intact. The Parabolic SAR is trading above price on the weekly charts, indicating that the downtrend in the stock will remain intact in the near term. Hence, we suggest smart trader to short the stock for the downside target of 273 levels with a stop loss placed above 318 levels.


WEEKLY VIEW OF THE MARKET

NIFTY (10,805.45): During the last week, broader markets, specifically Nifty swiveled in a massive range of about 500 odd points and saw a series of dramatic twists and turns on the international and domestic front. The week started with Urjit Patel resigning from the post of the RBI governor citing personal reasons, while the actual cause was evident as his ideology was not going well with that of the government. With Indian National Congress sweeping the polls in the 3 major states in the Hindi belt, viz. Rajasthan, MP and Chattisgarh, the markets initially reacted negatively, however, things got factored in and the market participants chose to buy strongly as the numbers inclined towards the Congress’ victory. However, one must admit that pessimism prevailed until the magical numbers of the majority were not clear.

On the other hand, global markets were under tremendous pressure for a slew of reasons, the major one being a possible spike of tensions between the US and China after the CFO of Huawei was arrested earlier. But the markets recovered strongly after the US President Donald Trump added a dramatic new twist on Tuesday by suggesting he may intervene in American efforts to prosecute the CFO of Huawei, if it would help his pursuit of a trade deal with China. On the domestic front, the IIP rose at almost a one-year high in October 2018 led by a spurt in the manufacturing and mining sectors while retail inflation for November slowed to a 17-month low on cooling food prices. Growth in the IIP came in at 8.08% in October, in comparison to 4.47% in the prior month and 1.83% in the corresponding quarter, last year. On the other hand, CPI inflation dropped sharply to 2.33% in November from 3.38% in October 2018, thereby adding to the positivity. Another major reason for the markets to recover from lows was the appointment of the new RBI governor in quick time by the government, which appointed Mr. Shaktikanta Das as the new RBI Governor.

DERIVATIVE STRATEGIES

Type: Bull call spread in BPCL

First leg Buy one lot of BPCL 27 Dec 340 CE @ 10.20

Second leg Sell one lot of BPCL 27 Dec 360 CE @ 3.25

BEP 346.95

Max Profit 23,490

Max Loss 12,510

Rationale The stock has come out of consolidation range in the last trading session and has resumed its uptrend. Hence, a bullish strategy is recommended.

DERIVATIVES

Type: Bear put spread in RELINFRA

First leg Buy one lot of RELINFRA 27 DEC 300 PE @ 17.50

Second leg Sell one lot of RELINFRA 27 DEC 270 PE @ 5.50

BEP 288.0

Max Profit 23,400

Max Loss 15,600

Rationale The stock is in short-term downtrend and is trading below its short to medium-term moving averages. The stock has also seen short build-up in the last week.

Type: Bear Put Spread in NIFTY

First leg Buy one lot of NIFTY 27 DEC 10950 PE @ 181

Second leg Sell one lot of NIFTY 27 DEC 10650 CE @ 56

Max Profit 13,125

Max Loss 9,375

BEP 10,825.0

Rationale The index is expected to find resistance at higher levels. Hence, it may trade with mixed bias in days to come.

Type: Short Strangle in Bank Nifty

First leg Sell one lot of BANK NIFTY 20 DEC 27200 CE @ 71

Second leg Sell one lot of BANK NIFTY 20 DEC 26400 PE @ 62

Max Profit 2,660

Max Loss Unlimited above & below UBEP & LBEP

BEP UBEP = 27333 & LBEP = 26267

Rationale The index is expected to trade with mixed to range bound.

7KSTREET - 15TH DECEMBER 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

CHOLAFIN 1229.5 0.34 985500 70.95

COLPAL 1311.65 6.22 1603000 37.79

TVSMOTOR 570 5.26 7584000 36.72

IGL 253.3 2.01 6418500 23.10

M&MFIN 454.55 8.68 11387500 20.39

KSCL 590 14.80 1308000 19.29

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

TOP 6 SHORT CLOSURE


COALINDIA 247.15 4.39 43128800 -21.03

HEXAWARE 328.1 3.81 3226500 -18.18

AMARAJABAT 734.55 4.45 1176700 -18.08

NTPC 143.5 4.10 73300000 -16.13

L&TFH 146.85 5.80 18058500 -15.25

BEL 82.4 2.87 41475150 -15.25

TOP 6 SHORT BUILD UP


RELINFRA 291.95 -5.20 11402300 45.67

JETAIRWAYS 259.9 -5.92 6575000 35.43

ARVIND 99.9 -0.40 6126000 15.76

DRREDDY 2591.7 -3.75 3907000 15.12

CONCOR 650.65 -1.54 3485000 15.06

AUROPHARMA 726.2 -3.35 20636000 13.23

TOP 6 LONG CLOSURE


HDFCBANK 2095.7 -0.56 11724500 -8.79

DIVISLAB 1491.4 -0.03 3620800 -5.77

ICICIBANK 351.9 -0.09 83682500 -3.43

KOTAKBANK 1255.95 -1.85 11926400 -3.16

OIL 176.25 -0.90 13215312 -2.87

TORNTPOWER 253.45 -1.29 2217000 -1.20

NIFTY OPTION OI CONCENTRATION CHANGE IN NIFTY OPTION OI


COMMODITIES

BULLIONIn global markets, gold prices fell on Friday and marked its biggest weekly decline in five weeks due to a firmer dollar. The gold prices were pressurized by a stronger dollar which is exerting downward pressure on gold. Stronger than expected US retail sales combined with a weaker than expected flash PMI reading in the EU lead to the headwinds experienced by gold. The next trigger for gold is the outcome of the US Federal Reserve’s December 18-19 meeting, where the US central bank is widely expected to raise interest rates. The following interest hike will be its fourth rate hike this year which was expected but the market will be more focused on the policy outlook for 2019. The Fed is widely expected to strike a dovish tone for next year that will act as a support for gold prices. Lower interest rates reduce the opportunity cost of holding bullion and weigh down on the dollar. As per the commitment of traders (COT) report released by CFTC, managed net long positions in gold futures and options combined increased by 308 contracts while net short positions also surged by 231 contracts. In the coming week, Federal Reserve rate decision will be the major event to watch during the week as the recent developments in the US economy increased the uncertainty over the consensus of a 25 bps rate hike. Albeit, 111 analysts polled by Reuters suggest a rate hike of 25 bps to 2.50% from 2.25%, FOMC members comments on the future course of action will be keenly watched.

CRUDE OILCrude oil futures posted week-on-week losses, taking the negative cues from monthly reports released by IEA & OPEC which suggested global demand to shrink in 2019. Similarly, EIA monthly report suggested that the oil production from the US will remain apprehended in upcoming years. West Texas Intermediate (WTI) crude oil for January lost $1.38 Friday to settle at $51.20 per barrel. Compared to the prior week’s settlement, the WTI is down by 2.7 percent for the week. The February Brent oil futures price also declined on Friday, falling $1.17 to end the day at $60.28. For the week, the Brent is down by 2.25%. OPEC broke the string in oil market by bringing in the production cut agreement and agreeing with more than expected production cut levels. OPEC & Russia both agreed to remove 1.2 mn bpd of oil supplies from the market in lieu of pushing the global market towards balancing. Following the bilateral meetings between Saudi Arabia, Iran and Russia, producers group decided to exempt Iran from reducing production and restricting it more than the market expectation of 1 million bpd. The OPEC-led supply curbs will be made from January and were measured against October 2018 output levels. Looking over the demand side fundamentals, Brent crude lost around 30% of its value since the gruesome trade spat between US-China threatened a global economic slowdown and eroded the investor’s positive optimism. Despite the expectations of a slowdown, crude oil demand remained apprehended as indicated by Chinese imports in November which rose by 8.5% on year-on-year basis. Also for the first time on records, the US during last week of November exported more crude oil and fuel than it imported. The country shipped around 3.2 million bpd in the first week of December as shale oil producers rushed in to capture the market share and reduce their building shale supplies glut. As a key demand driver for the prices, Chinese purchases for its strategic reserve and required feed from its new refineries will influence the prices. Whereas any of the shocks prompted by US President or change in the geopolitical dynamics could again affect the prices positively.

SPICESCardamom futures traded mostly in a positive note during the week tracking lower crop size. Despite expectations of major shortage, major gains are yet to be seen and prices are hovering near their 2-year high levels as lack of exports to Saudi Arabia is arresting major gains. For the week ahead, cardamom futures are likely to trade with bullish sentiments in the market. After conducting only one auction per day at auction centers for the past few months, cardamom auctions will be back to ‘Two auction slot system” from 17th Dec onwards. Turmeric futures noted sharp gains during the week on emerging crop concerns reports from various growing regions. Firstly, drought conditions in growing states have affected the yield levels leading to lower crop. Further, rains in Telangana and Andhra Pradesh due to cyclone may cause damage to standing crops. Harvesting has already started in few regions where early sowing was carried out, but farmers are likely to bring huge quantities to spot markets on anticipation of MSP of Rs.10000/quintal for turmeric as promised during the elections in Telangana. We suggest buying for the week. Jeera futures mostly traded negative during the week tracking improvement in the sowing progress. The progress of the sowing activities that was slow during the start picked up pace after the supply of water resources, hence weighing on the prices as total area in the key growing states may increase by 10% YOY. As per latest data, sowing in Gujarat is completed in 268368 hec of land that was 311366 hec last year during the corresponding period; the area is lower by 14% YOY while it is covered 84% of the normal area. We expect jeera futures to trade in a negative note for the week, hence sell on rise is suggested. Dhaniya futures mostly traded in a range with positive bias during the week. Prices traded down initially on profit booking; however, prices recovered to trade higher on expectations of the lower area under dhaniya as farmers are shifting to another crop such as wheat and chana for guaranteed

prices. Progress is very slow in the major growing states; as per latest data, sowing in Gujarat is completed in only 24033 hec of land which was 62587 hec last year during the corresponding period; the area is lower by 62% YOY while it is covered just 26% of the normal area. Dhaniya prices are expected to continue gains for the week.

OILS & OILSEEDSSoybean futures could keep it down in upcoming week too due to higher production outlook for the year 2018-19. Indian soybean market reacted negatively to the news of easing trade dispute between the US and China as Indian traders could lose export opportunities if China resumes soybean import from the US. Meanwhile, limited buying at physical market due to tumbling crush margin to millers could be another factor which may keep prices under pressure. Soybean Processors Association of India (SOPA) estimated soybean production for the year 2018-19 at 114.8 lakh tons against the 83.5 lakh tons of prior year. Similarly, RM Seed futures are expected to trade on the weaker note due to higher production outlook for upcoming season reports of increased acreages under mustard seed could keep prices under pressure. The area under mustard seed cultivation has touched 59.15 lakh hectares as against 57.89 lakh hec during the corresponding period in the previous rabi season, higher by 4.29% YoY. However, the expectation of rise in export demand of mustard seed oil cake from China could restrict major downfall. China has lifted the ban on the import of mustard seed cake from India. India exported about 25234 tons of Rapeseed meal during October, higher by 11% YoY. Meanwhile, CPO futures are expected to trade down in expectation of rise in production estimates in Malaysia during December. Malaysia’s palm oil stockpiles at the end of Nov rose by 10.45% MOM to 3.007 million tons wherein export for Nov month dropped by 12.87% to 1.37 million tons as per latest data released by Malaysian Palm Oil Board (MPOB). However, production tumbled by 5.64% MoM to 953,750 tons as per MPOB. Exports of Malaysian palm oil products for December. 1-10 fell 9.6 percent to 312,160 tons from 345,219 tons shipped during Nov. 1-10 as per data compiled by cargo surveyor Societe Generale de Surveillance.

COTTONMCX cotton prices are expected to trade sideways to higher in the upcoming week may track its strong fundamentals. Reduced supply at key trading centers resulted with slower arrivals pace is likely to support prices in coming days. Daily arrivals are hovering in a range of 1.35-1.5 lakh bales compare to normal of 2 lakh bales. Lower yield realization in central and southern region affecting the pace of arrivals adversely. The average yield for cotton in India during the year 2018-19 is estimated at 502 kg/hec against the 506 kg/hec of the prior year. Meanwhile, trimmed its production forecast for India from 28 million bales of 480 lb each to 27.5 million bales (352.6 lakh bales of 170 kg each). Prices are likely to be buoyed by tighter supply situation as total arrivals for the year 2018-19 has been lower by 20-25% compared to the previous year and expected to remain lower in coming months too. Apart from that, improved export viability of Indian fiber supported by the weakness of Indian currency against US dollar could be another factor which may help prices to trade on positive bias in near futures. Sharp gains in ICE cotton prices could emerge export opportunities to Indian traders in coming weeks. ICE cotton futures traded higher in expectation of a rise in export demand from China and the US and China agreed to a common consensus not to impose any new tariff for the next 90 days. Cotton Association of India estimated total cotton production for the year 2018-19 at 343.25 lakh bales, lower by 1.4% compared to the prior year. Ministry of Agriculture projected cotton production for the year 2018-19 at 324.83 lakh bales in its first advance estimates against the 348.88 lakh bales of prior year, lower by 7% YoY. However, gains in cotton is likely to be limited due to demand concerns as domestic millers are avoiding bulk buying due to higher price disparity of Indian fiber.

GUARGuar complex futures traded mixed to positive during the week ended on 14th Dec 2018 due to improving demand outlook in physical market tracking bullish fundamental outlook. Paucity of stocks amid restricted supplies added positive sentiments in the market. Recovery in Crude oil prices in the second consecutive week with slightly down in Indian rupee was supportive for gum prices. Guar seed most active January contract gained by 0.96%and settled the week at Rs 4417 higher by Rs 89 per quintal from the last week wherein gum futures moved up by 1.18% and closed the session at Rs 8654 8865 gained by Rs 211 per quintal from the previous week. In Rajasthan, arrivals were recorded around 55688.1 quintals during the week down by 31560 quintals from the last week. Guar seed and guar gum are expected to trade Sideways with positive bias due expectation of improve export demand outlook in major trading center. Low arrival amid improved demand in major trading center is likely to supportive for guar prices in futures and spot market. This week the second time the oil rigs countdown by 04 numbers with a total count of 873 updated by Baker Hughes in his weekly report. However, losses are limited as expanding supply-demand gap in line with shrinking in arrivals in all over India. Slightly weakness in Indian INR against the US dollar during the week is likely to supportive for gum exporters and traders.


COPPER

• As on 14th December 2018, LME copper 3M forwards is trading at $6100/Mt.

• Prices are trading below the monthly & weekly 8, 13 EMA levels ($M $6300/6360 W $6160).

• The momentum indicator RSI -14 is trading around 43, which as a potential to move lower.

• Since last several weeks prices are trading within a confined range of $6400-5970.

• Overall bearish trend is in progress and expecting prices to resume the trend in the coming week.

• LME Copper prices are likely to trade on a negative note in the range of USD 6300 - 5900

NICKEL

• As on 14th November 2018, Nickel 3M forwards at the LME platform is trading around $10800/MT down.

• In the bigger scenario prices have started falling after making a high of $16690/Mt,

• Prices are trading below the weekly 8, 13 EMA support levels ($11400, 11600) also prices is falling along with trend channel support and resistances ($10000-11500).

• Daily RSI-14 is treading around 41 approaching the oversold zone. • Lower side supports are seen at 10400 then at 10000 levels which

are falling channel lower band and the long-term rising trend line support levels respectively.

• Overall the bearish trend is intact and expected to extend. • LME Nickel prices are likely to trade in a range of USD 10000 –

USD 11,500 on negative note in the coming week.

ZINC

• As on 14th November 2018, LME Zinc 3M forward is trading at $ 2522/Mt.

• Prices are trading below the weekly 8, 13 EMA support levels ($2580.2590) and also trading below the monthly 8,13 EMA ($2680.2760).

• The long-term falling trend line is providing resistance at $2660 levels.

• The weekly momentum indicator RSI-14 is treading at a neutral zone of 44 which as a potential to fall further in the coming weeks.

• Since last several months, prices are trading within a confined range of $2728-2283.

• LME Zinc prices are expected to trade within a range of USD 2660-2400 on negative bias. Long term bearish trend is in progress, only a sustainable trade above the 2760 may interrupts the trend.

COMMODITIES

TREND SHEET

Commodities 7-Dec 14-Dec % Change 52 Week High% Change from 52

Week High52 Week Low

% Change from 52 Week Low

MCX Gold (Rs/10 gms) 31595.00 31553.00 -0.1% 32311.00 -2.35% 28205.00 11.87%

MCX Silver (Rs/Kg) 37972.00 38054.00 0.2% 41698.00 -8.74% 34981.00 8.78%

MCX Crude Oil (Rs/bbl) 3849.00 3690.00 -4.1% 5669.00 -34.91% 3464.00 6.52%

MCX Natural Gas (Rs/mmBtu) 324.00 276.10 -14.8% 358.70 -23.03% 162.50 69.91%

MCX Copper (Rs/kg) 438.45 441.70 0.7% 493.25 -10.45% 402.55 9.73%

MCX Lead (Rs/kg) 142.20 140.30 -1.3% 172.50 -18.67% 133.15 5.37%

MCX Zinc (Rs/kg) 188.00 183.40 -2.4% 232.70 -21.19% 163.80 11.97%

MCX Nickel (Rs/kg) 781.30 790.90 1.2% 1095.20 -27.78% 708.50 11.63%

MCX Aluminium (Rs/kg) 140.30 137.60 -1.9% 178.85 -23.06% 128.30 7.25%

NCDEX Soybean (Rs/Quintal) 3277.00 3372.00 2.9% 3895.00 -13.43% 2967.00 13.65%

NCDEX Refined Soy Oil (Rs/10 kg) 738.40 740.80 0.3% 796.35 -6.98% 712.50 3.97%

NCDEX RM Seed (Rs/Quintal) 4019.00 4085.00 1.6% 4262.00 -4.15% 3727.00 9.61%

MCX CPO (Rs/10 kg) 492.50 506.50 2.8% 673.00 -24.74% 483.40 4.78%

NCDEX Castor Seed (Rs/Quintal) 5474.00 5380.00 -1.7% 6300.00 -14.60% 3831.00 40.43%

NCDEX Turmeric (Rs/Quintal) 6252.00 6294.00 0.7% 8066.00 -21.97% 5978.00 5.29%

NCDEX Jeera (Rs/Quintal) 18515.00 18320.00 -1.1% 21900.00 -16.35% 14010.00 30.76%

NCDEX Dhaniya (Rs/Quintal) 6563.00 6653.00 1.4% 6892.00 -3.47% 4186.00 58.93%

MCX Cardamom (Rs/kg) 1479.60 1475.00 -0.3% 1550.00 -4.84% 818.50 80.21%

NCDEX Wheat (Rs/Quintal) 2119.00 2118.00 0.0% 2135.00 -0.80% 1614.00 31.23%

NCDEX Guar Seed (Rs/Quintal) 4337.00 4377.00 0.9% 4869.50 -10.11% 3494.50 25.25%

NCDEX Guar Gum (Rs/Quintal) 8654.00 8879.00 2.6% 10510.00 -15.52% 7200.00 23.32%

MCX Cotton (Rs/Bale) 21910.00 21890.00 -0.1% 24280.00 -9.84% 19360.00 13.07%

NCDEX Cocud (Rs/Quintal) 1901.50 1910.00 0.4% 2043.00 -6.51% 1166.00 63.81%

NCDEX Kapas (Rs/20 kg) 868.00 868.00 0.0% 986.50 -12.01% 854.00 1.64%

MCX Mentha Oil (Rs/kg) 1588.30 1491.70 -6.1% 1846.10 -19.20% 1106.00 34.87%

TECHNICAL RECOMMENDATIONS


COMMODITIES

NEWS DIGEST

• At the start of the cotton year, 2018-19 (Oct-Sep) delays in harvesting and concerns about output amid scanty rains kept cotton prices higher. In November, cotton prices fell due to poor exports and an increase in arrivals, post-Diwali. However, prices should once again bounce considering the latest estimates of the Cotton Association of India (CAI) regarding the 2018-19 crop.

• Rabi acreages so far still trail last year’s levels, even though the pace of planting has been progressing steadily, reducing the gap, as witnessed early this month. According to the Agriculture Ministry, the total acreages, so far, stood at 476.12 lakh hectares, down 5.2% from last year. In the first week of December, the gap in acreages stood at over 8%.

• Former RBI Governor Raghuram Rajan on Friday said farm loan waiver should not form part of poll promises and he has written to Election Commission that such issues should be taken off the table.

• China’s meager first purchase of U.S. soybeans since its trade war with the United States began in July disappointed farmers, grain traders and a U.S. government official hoping for larger sales to lift slumping prices and absorb a huge surplus across the U.S. farm belt, they said on Thursday. The U.S. Department of Agriculture (USDA) announced private sales of 1.13 million tons of U.S. soybeans to China, confirming sales Reuters reported a day earlier.

• A severe cyclone, Phethai, is likely to hit the Andhra Pradesh coast on Monday afternoon, the India Meteorological Department (IMD) warned in its latest weather forecast. This is the fourth cyclone to hit the eastern coast this season and comes about a month after cyclone Gaja hit the Tamil Nadu coast on 16 November, causing massive destruction. Earlier, cyclone Daye and very severe cyclone Titli ravaged coastal areas in Odisha and Andhra Pradesh.

WEEKLY COMMENTARY

• Oil settled below $52 a barrel in New York, more than a $1 lower than where it ended a week ago after OPEC and its allies announced output cuts, as traders weighed incremental U.S. shale growth against softer demand for 2019. Saudi Arabia’s plan to slash exports to the U.S. next month is shoring up expectations that the Organization of Petroleum Exporting Countries and its partners will deliver on last week’s promise to curb production by 1.2 million barrels a day. Yet the oil market appears to have largely ignored cuts agreed to just a week ago, concerned by the relentless growth from U.S. shale, which veteran crude trader Andy Hall says is making it hard to predict the market’s direction.

• Gold eased for the second straight session to hit a one-week low on Friday as the dollar rose, putting the metal on track to post its biggest weekly fall in five ahead of the US Federal Reserve’s interest rate decision next week. Spot gold was 0.3% lower at $1,238.86 an ounce as of 10.41am GMT. Earlier in the session, prices hit their lowest since December 6 at $1,236.80. The metal is down about 0.7% so far this week. US gold futures were down 0.4% at $1,242.80 an ounce.

• US soybean net export sales for the 2018-19 marketing year were 792,269 mt for the week ending December 6, down 11.07% from the previous week, the Department of Agriculture data showed. Since the new marketing year began September 1, total commitments — cumulative exports plus outstanding sales — were reported at 24.941 million mt, 33.76% below the same period last year. The total commitments represent 48.23% of the USDA’s 51.709 million mt of exports estimated for the entire marketing year.

• Base metals were mostly up in a tight range on Wednesday, following U.S. President Donald Trump’s upbeat comments about a trade deal with China, while the dollar held near a one-month peak against its peers. China has agreed to cut tariffs on U.S.-built cars and auto parts to 15 percent from 40 percent currently, while Trump said talks were taking place with Beijing by phone and he would not raise tariffs on Chinese imports until he was sure about a deal.

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MCX CRUDE- PRICE, VOLUME & OPEN INTEREST MCX NATURAL GAS – PRICE, VOLUME & OPEN INTEREST

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COMMODITIES

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

Commodity Exchange Contract 07-Dec 14-Dec % change

Aluminium LME 3M 1963.00 1925.50 -1.91%

Copper LME 3M 6149.00 6140.50 -0.14%

Lead LME 3M 1995.00 1954.00 -2.06%

Nickel LME 3M 10955.00 11040.00 0.78%

Zinc LME 3M 2585.00 2533.00 -2.01%

Gold CME DEC 1249.40 1238.10 -0.90%

Silver CME DEC 14.56 14.49 -0.48%

WTI Crude oil CME OCT 52.13 51.23 -1.73%

Natural Gas CME OCT 4.50 3.79 -15.84%

INTERNATIONAL COMMODITY PRICES

Commodity Exchange Contract 07-Dec 14-Dec % change

Soybean CBOT NOV 940.75 926.25 -1.54%

Soy oil CBOT DEC 28.41 28.72 1.09%

CPO BMD DEC 1998.00 2068.00 3.50%

Cotton ICE DEC 74.90 74.90 0.00%

SPOT PRICES (% CHANGE)

LME WAREHOUSE STOCKS (IN TONS)

Commodity Previous week This week Change % Change

Copper 122500 121225 -1275 -1.04%

Zinc 113875 119000 5125 4.50%

Aluminium 1040975 1150100 109125 10.48%

Lead 104250 106800 2550 2.45%

Nickel 210846 209688 -1158 -0.55%

SHANGHAI WAREHOUSE STOCKS (IN TONS)*


Copper 123879 122222 -1657 -1.34%

Zinc 26850 24879 -1971 -7.34%

Aluminium 713267 688825 -24442 -3.43%

*Until Wednesday

WEEKLY STOCK POSITION IN LME (IN TONS)

COMEX WAREHOUSE STOCKS (IN TONS)


Copper 129104 120020 -9084 -7.04%

-14.78%

-6.08%

-4.13%

-2.45%

-1.92%

-1.72%

-1.34%

-1.05%

-0.31%

-0.13%

-0.09%

-0.05%

0.22%

0.33%

0.45%

0.67%

0.74%

0.92%

1.23%

1.37%

1.64%

2.24%

2.60%

2.84%

2.90%

-16.00% -14.00% -12.00% -10.00% -8.00% -6.00% -4.00% -2.00% 0.00% 2.00% 4.00%

Natural Gas

Mentha Oil

Crude Oil

Zinc

Aluminum

Castor Seed

Lead

Jeera

Cardamom

Gold

Cotton

Wheat

Silver

Soy Oil

Cotton Seed Oil Cake

Turmeric

Copper

Guar Seed

Nickel

Dhaniya

RM Seed

Barley

Guar Gum

CPO

Soybean

WORLD COTTON SUPPLY AND USE

Commodity Exchange Contract 07-Dec Contract 07-Dec 14-Dec % change

World Nov 80.39 119.39 41.11 126.88 41.13 72.61

Dec 80.45 118.74 41.71 125.63 41.73 73.19

United States Nov 4.3 18.41 0.01 3.3 15 4.3

Dec 4.3 18.59 0.01 3.3 15 4.4

Australia Nov 2.94 2.5 3/ 0.04 3.7 1.71

Dec 2.94 2.5 3/ 0.04 3.6 1.81

Brazil Nov 8.66 10 0.08 3.5 5.5 9.73

Dec 8.66 11 0.08 3.5 5.8 10.43

India Nov 8.68 28 1.5 25.3 4.3 8.58

Dec 8.68 27.5 1.6 25.3 4.4 8.08

Mexico Nov 0.66 1.73 0.9 1.9 0.6 0.76

Dec 0.66 1.73 0.9 1.95 0.6 0.71

China Nov 38.02 27.5 7 42.5 0.15 29.87

Dec 38.02 27 7 41.5 0.15 30.37

European Union Nov 0.27 1.66 0.71 0.75 1.53 0.32

Dec 0.27 1.66 0.71 0.75 1.53 0.32

Turkey Nov 1.88 4.5 2.9 7.1 0.4 1.78

Dec 1.88 4.3 2.9 7 0.4 1.68

Pakistan Nov 2.83 8 2.6 10.8 0.15 2.46

Dec 2.83 7.4 2.9 10.6 0.15 2.36

Indonesia Nov 0.62 3/ 3.65 3.55 0.01 0.71

Dec 0.62 3/ 3.65 3.6 0.01 0.66

Thailand Nov 0.18 3/ 1.13 1.1 0 0.18

Dec 0.18 3/ 1.18 1.15 0 0.18

Bangladesh Nov 1.86 0.14 8.1 8 0 2.08

Dec 1.86 0.14 8.1 8 0 2.08

Vietnam Nov 1.19 3/ 7.6 7.5 0 1.29

Dec 1.19 3/ 7.6 7.5 0 1.29

Unit in Million 480-Pound Bales


USD/INR

USDINR continue to trade higher in the second consecutive week after finding support at 69.56. Prices are currently holding below the 61.8% Fib. Retracement based resistance while managing to close above the short-term moving average 9 Pd suggesting that positive momentum is intact. Going ahead with prices at resistance momentum indicators recovering from the oversold region, prices are likely to hold above the support of 71.15-71.20 region and trade higher again towards 73.25, while any immediate fall below 71.05 would resume the bearish bias. We recommend buy around 71.55-70.50 TP 73.20 SL 71.20.

EUR/INR

EURINR traded on a negative note in the last week after testing the middle band of the Bollinger band while keeping the sideways bias intact. At present prices are trading below the 8, 13 weekly EMA levels (81.22, 80.70). Prices are seen currently holding above the crucial support zone of 79.50. At momentum front, momentum oscillators like RSI (14Pd) are seen recovering from oversold region supporting the corrective bias. Thus we are expecting pair to trade within a range of 82 to 79. We recommend buying at 80.70-80.70 TP 82.70 SL 79.40.

GBP/INR

GBPINR traded on a negative note after a bullish engulfing candlestick in previous week keeping the positive bias intact. Prices found support at 88.70 which happens to be 50% Fib. Retracement to the rally started from 79.50. While combining above technical clues, we are expecting the pair to trade up from consolidating in the zone of 93 to 89.50. We recommend buying around 89.70-86.60 TP 92.10 SL 89.50.

JPY/INR

Prices traded on a choppy note after a strong recovery from 50% Fib. ret. levels and bullish engulfing pattern keeping the short-term positive bias intact. Prices are trading below the weekly EMA 8,13 levels (64.30,64.50) suggests that trend is still bearish. Also, the weekly momentum indicator RSI-14 is treading around 47.00 at a neutral phase, suggesting no major shift in bias and subsequent move can be corrective in nature. Overall the pair expected to move in a range of 62.00-64.00. We recommend buying around 62.50-62.40 TP 64.00 SL 61.50.

TECHNICAL RECOMMENDATIONMARKET STANCE

FX markets witnessed significant volatility during the week with looming geopolitical tensions evolving across the globe. Warm waves surrounded the FX markets taking its origin from ongoing politically boiled Britain, public protest in France, Budget plans in Italy and trade tensions across Asia and US. Dollar index stayed tall during the week boosted by wobbly Euro and Pound. The dollar index was able to close at highest in over a month largely supported by politically and economically beaten down single currency and cable. Differed Brexit negotiations ripped the cable while, cautious European Central Bank along with weaker Eurozone economic data dragged the Euro lower. Back home, Indian rupee also remained weaker fell prey to the surprise resignation of RBI Urjit Patel as governor of Indian Central Bank. The Ruling BJP government unable to maintain its position in five state general elections also pushed the rupee lower. USDINR is expected to hold its supports at 71.50 -71.70 and move higher during the next week, with market focus on FOMC statement on Wednesday. Federal Reserve rate decision will be the major event to watch during the week as the recent developments in the US economy increased the uncertainty over the consensus of a 25 bps rate hike.

NEWS FLOWS OF LAST WEEK

• The RBI governor Dr. Urjit Patel resigned from his current position with on 10 December with immediate effect, citing personal reasons.

• British Prime Minister Theresa May has won the confidence ballot by conservative MPs. PM May wins confidence vote with 200 out of 317 Tory MPs supporting her to stay on as a leader.

• European Central Bank formally ended the massive asset purchase program of 2.6 trillion Euro, while leaving the interest rates unchanged.

• ECB President Draghi said incoming economic data is weaker than expected and said significant monetary stimulus still necessary.

• China to lift retaliatory tariff on US cars for three months, China will suspend 25% tariffs on 144 US vehicles and Auto part items.

• German Manufacturing PMI eased to four year low in December to 51.5 from 5.18.

• China’s November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further, underlining rising risks, as China works to defuse a trade dispute with the US.

CURRENCY

CURRENCY TABLE

Currency Pair Open High Low Close

USDINR 71.34 72.46 71.23 71.89

EURINR 81.56 82.37 81.07 81.19

GBPINR 90.96 91.10 89.88 90.39

JPYINR 63.49 64.09 63.02 63.30

DXY 96.71 97.62 96.37 97.58


ECONOMIC GAUGE FOR THE NEXT WEEK

GMT Date Local Time Country Indicator Name Period Poll Prior Unit Prior

17 Dec 15:30 Euro Zone Inflation Ex-Tobacco Idx Nov 2018 104.3 Index 218.5

17 Dec 15:30 Euro Zone HICP-X F,E,A&T Final YY Nov 2018 1 1 Percent 1.668

17 Dec 15:30 Euro Zone HICP-X F, E, A, T Final MM Nov 2018 -0.2 -0.2 Percent -134

17 Dec 15:30 Euro Zone HICP-X tobacco YY Nov 2018 2.1 Percent -134

17 Dec 15:30 Euro Zone HICP-X Tobacco MM Nov 2018 0.2 Percent 0.2

17 Dec 15:30 Euro Zone HICP-X F&E Final YY Nov 2018 1.1 1.1 Percent 6.2

17 Dec 15:30 Euro Zone HICP-X F&E MM Nov 2018 0.1 Percent -0.1

17 Dec 15:30 Euro Zone HICP Final YY Nov 2018 2 2 Percent 316.4

17 Dec 15:30 Euro Zone HICP Final MM Nov 2018 -0.2 0.2 Percent 227.7

17 Dec 15:30 Euro Zone Eurostat Trade NSA, Eur Oct 2018 13.1 EUR 783.7

18 Dec 19:25 United States Redbook YY W 15 Dec 6.6 Percent 5.16

18 Dec 19:25 United States Redbook MM W 15 Dec -0.5 Percent 4.851

19 Dec 00:00 United States EIA Ethanol Ref Stk W 14 Dec 22890 Barrel -0.077

19 Dec 00:00 United States EIA Ethanol Fuel Total W 14 Dec 1046 -1.295

19 Dec 21:00 United States EIA Weekly Gasoline O/P W 14 Dec 0.791 Brl/Day 0.183

19 Dec 21:00 United States EIA Weekly Crude Stocks W 14 Dec -1.208 Barrel 0.008

19 Dec 21:00 United States EIA Weekly Dist. Stocks W 14 Dec -1.475 Barrel 1.162

19 Dec 21:00 United States EIA Weekly Gasoline Stk W 14 Dec 2.087 Barrel 0.191

19 Dec 21:00 United States EIA Weekly Crude Imports W 14 Dec 1.103 Barrel 0.208

19 Dec 21:00 United States EIA Weekly Rfg Stocks W 14 Dec 0.006 Barrel 0.423

19 Dec 21:00 United States EIA Weekly Heatoil Stock W 14 Dec 0.256 Barrel 2.6

19 Dec 21:00 United States EIA Weekly Prods Imports W 14 Dec 0.124 Brl/Day -0.116

19 Dec 21:00 United States EIA Weekly Dist Output W 14 Dec -0.026 Brl/Day -0.02

19 Dec 21:00 United States EIA Weekly Crude Runs W 14 Dec -0.051 Brl/Day 22791

19 Dec 21:00 United States EIA Weekly Refining Util W 14 Dec -0.4 Percent 1042

20 Dec 21:00 United States EIA- Nat Gas, Change Bcf W 14 Dec -77 Cft 0.17

20 Dec 21:00 United States Nat Gas-EIA Implied Flow W 14 Dec -77 Cft 29.4

20 Dec 19:00 United States Initial Jobless Claims W 15 Dec 215 206 Person 0.3

20 Dec 19:00 United States Jobless Claims 4-Wk Avg W 15 Dec 224.75 Person 6.1

20 Dec 19:00 United States Continued Jobless Claims W 08 Dec 1.661 Person 266

21 Dec : United States Dallas Fed PCE Nov 2018 1.6 Percent 0.1

21 Dec 20:30 United States Personal Consump Real MM Nov 2018 0.4 Percent 0

21 Dec 20:30 United States Personal Income MM Nov 2018 0.3 0.5 Percent 5.5

21 Dec 20:30 United States Consumption, Adjusted MM Nov 2018 0.3 0.6 Percent 137.9

21 Dec 20:30 United States Core PCE Price Index MM Nov 2018 0.2 0.1 Percent 14.1

21 Dec 20:30 United States Core PCE Price Index YY Nov 2018 1.9 1.8 Percent 19.4

21 Dec 20:30 United States PCE Price Index MM Nov 2018 0.2 Percent

21 Dec 20:30 United States PCE Price Index YY Nov 2018 2 Percent

CURRENCY


Activity @ Canara Bank - Sector 15 & 16 Faridabad

Activity @ Darwad College

IAP @ IOC Kashipur

IAP @ Manappuram Guwahati

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.

Documents

RULE THE MARKET - content.karvyonline.comcontent.karvyonline.com/contents/kstreetissue015.pdf · From The Desk Of Research Head. Disclaimer: Karvy Stock Broking Limited [KSBL] is