WEEKLY UPDATE. Monday. 17 th February One step ahead and two steps back. Domestic Markets. Global Markets. Currency Update.

Transcription

1 One step ahead and two steps back. Well, that s what is happening to our markets, we see that there is some progress happening but suddenly some event causes the whole effort futile. Last week we saw that the markets bounced back from major support at 200 DMA around 5975 area. We tested crucial resistance around 6100 but could not break it. We are back to square one since then, in fact a step backward. The markets have closed lower than the week before. Well, the reasons are plenty right from global issues to domestic economic factors to selling by FIIs but the result is that we are where we were a week back. FIIs, the key driver of Indian markets, have sold shares worth net approx Rs 2000 crore in this month so far. Industrial output fell 0.6% in December 2013 over December 2012 after contracting a revised 1.3% in November. Inflation based on the combined consumer price index (CPI) for urban and rural India for January 2014 eased to 24-month low level at 8.79% (y-o-y) while Inflation based on the wholesale price index (WPI) stood at 5.05% (provisional) in January 2014 as compared to 6.16% (provisional) for December 2013 and 7.31% in January However, Core inflation or non-food manufacturing inflation edged up to 3.04% in January 2014, from 2.75% in December 2013, the latest data showed. Last week, there were three stocks in focus. Cipla, Tata Steel, and Tata Motors. Cipla was the biggest Sensex loser last week. The stock tumbled 10.49% to Rs The company's consolidated net profit fell 17% to Rs 284 crore, EBITDA declined 10% to Rs 467 crore in Q3 December 2013 over Q3 December Tata Steel lost 3.49% to Rs on weak sequential Q3 results. The compa ny's consolidated net profit dropped 45.1% to Rs crore. Tata Motors rose 7.55% to Rs It was the top Sensex gainer last week. The company's consolidated net profit surged % to Rs crore on 38.37% increase in total income to Rs 64, crore in Q3 December 2013 over Q3 December Currency Update: Weak dollar internationally and RBI intervention above 62.70/USD levels has provided some respite to rupee. The spectrum sale has given enough impetus to rupee to strengthen from its weak zone and assurance from FM to stick to the proposed fiscal deficit will bring more cheer to rupee. A positive equity will also help, but concerns regarding Fed tapering impact on emerging markets will still keep some pressure on rupee. The range for the Rupee coming week is seen between /USD. In the week ahead, interim budget will set the tone. Vote-on- Account, or interim budget for , which the government will unveil during trading hours on, 17 February 2014, will set the tone for the stock market next week. With Q3 December 2013 results season coming to an end, global cues will play a major role in determining trend of the domestic stock market in the near term. The market will closely the direction of the rupee and the investment activity of foreign institutional investors (FIIs). Domestic Markets SENSEX % NIFTY % CNX MIDCAP % CNX % BSE SMALL CAP % Global Markets DOW JONES % NASDAQ % S & P % HANG SENG % FTSE % Currency Update USD INR % EUR INR % JPY INR % GBP INR % Commodity Update GOLD (MCX) % SILVER (MCX) % CRUDE (MCX) %

2 SECTOR ANALYSIS CNX Auto ( ) Bias: Neutral to Negative The Auto index closed positive this week, with a great help from Tata Motors. While other heavyweights in the auto pack were either flat or in the red, Tata motors stole the show. The rise in auto index last week seems lop sided as the contribution to the rise was only from one of the scrips. We feel, the index is still weak and may test lower levels in coming week. Pick in the Auto Index: Tata Motors (346.80): Tata Motors rose 7.55% to Rs It was the top Sensex gainer last week. The company's consolidated net profit surged % to Rs crore on 38.37% increase in total income to Rs 64, crore in Q3 December 2013 over Q3 December Remain long on the stock. Outperforming Stocks: Tata Motors. Underperforming Stocks: Maruti, Hero Motocorp. M&M. Bank Nifty ( ) Bias: Neutral to Negative The Bank Nifty has been the most dull and indecisive index last week. It closed just 0.40% below its previous week. There was not much activity on it last week. The heavy components of Bank Nifty like SBI, ICICI and Axis were in negative whole week. We feel the Bank Nifty will test its crucial supports at psychological areas. Pick in the Bank Index: ICICI Bank (991.75): ICICI Bank has found support around 950 area and bounced back from there. On WoW basis it has closed almost 3% up. We feel it can test its res around 1050 area in the coming week. Buy the stock at CMP for Outperforming Stocks: ICICI Bank. Underperforming Stocks: SBI, Axis Bank, YES bank. CNX Pharma ( ) Bias: Negative. Pharma index has been underperforming the broad Nifty index in the last whole week. It is trading around its 52 week highs but showing a sign of tiredness. It has tested its 50DMA around 7687 and bounced briefly to close above it. We feel it will break this support this week. We remain cautious on CNX Pharma. Pick in the Pharma Index: Cadila Healthcare (947.30): The stock may not be an actively traded stock but it sure looks one which could. Cadila looks good on charts in the short term. We are positive on the stock and expect it to test its psychological area around Underperforming Stocks: Cadila Healthcare, DIVIS. Outperforming Stocks: Ranbaxy, Cipla.

3 SECTOR ANALYSIS CNX Realty (154.65) Bias: Neutral to Positive. The CNX Realty index has outperformed the broader index. The daily chart shows that index is making bottom around 150 areas. We expect it to bounce back in the short term. We feel the index is gaining momentum and may test its resistance around 160 soon. We are positive on the index with a week s perspective. Pick in the Realty Index: DLF (145): This stock has tested areas around 130 and bounced back. It is showing a small consolidation around 140 area and has broken out of it. We expect DLF to test area which also happens to be a gap on the daily charts. Buy at CMP for 155 with a week s holding period. Outperforming Stocks: DLF. Underperforming Stocks: Indiabulls real estate, UNITECH. CNX IT ( ) Bias: Positive. IT index has been outperforming the broad index for a long time now. After consolidating around its 50DMA last week around 9600, it is showing upward momentum. We expect it to test its highs around 10k. We are positive on the index and recommend holding it. Pick in the IT Index: HCL Tech ( ) we are positive on the stock and expect it to test 1600 areas soon. There is major support around 1460 area. Remain long as long as 1460 is held. We expect it to move to 1600 in coming week. Outperforming Stocks: Infy, HCL Tech. Underperforming Stocks: TCS. Weekly Stock Recommendation DLF (145) Recommendation: BUY. Target: 155. Holding Period: One Week. This stock has tested areas around 130 and bounced back. It is showing a small consolidation around 140 area and has broken out of it. We expect DLF to test area which also happens to be a gap on the daily charts. Buy at CMP for 155 with a week s holding period.

4 Economic Calendar Time Country Impact Event Forecast Previous, February 17 All Day USD HOLIDAY United States Washington s Birthday Tuesday, February GBP HIGH CPI (YoY) 2.0% 2.0% GBP MEDIUM CPI (MoM) -0.5% 0.4% GBP MEDIUM PPI (MoM) -0.5% 0.1% USD MEDIUM NY Empire State Manufacturing Index USD MEDIUM TIC Net Long-Term Transactions -29.3B Wednesday, February GBP HIGH Claimant Count Change -20.0K -24.0K GBP MEDIUM Unemployment Rate 7.1% 7.1% USD MEDIUM Building Permits -2.6% USD MEDIUM Building Permits (MoM) 0.980M 0.991M USD MEDIUM Core PPI (MoM) 0.2% 0.3% USD MEDIUM Housing Starts 9.8% USD MEDIUM Housing Starts (MoM) 0.950M 0.999M USD MEDIUM PPI (MoM) 0.1% 0.4% Thursday, February CNY HIGH Chinese HSBC Manufacturing PMI GBP MEDIUM Core Retail Sales (MoM) -1.4% 2.8% GBP MEDIUM Core Retail Sales (YoY) 5.1% 6.0% GBP MEDIUM Retail Sales (YoY) 5.1% 5.3% GBP HIGH Retail Sales (MoM) -1.0% 2.6% GBP MEDIUM CBI Distributive Trade Survey GBP MEDIUM CBI Industrial Trends Orders USD MEDIUM Core CPI (YoY) 1.6% 1.7% USD HIGH Core CPI (MoM) 0.1% 0.1% USD MEDIUM CPI (MoM) 0.1% 0.3% USD MEDIUM CPI (YoY) 1.6% 1.6% USD MEDIUM Initial Jobless Claims 335K 339K USD MEDIUM Philadelphia Fed Manufacturing Index Friday, February GBP MEDIUM Core Retail Sales (MoM) -1.4% 2.8% GBP MEDIUM Core Retail Sates (YoY) 5.0% 6.1% GBP HIGH Retail Sales (MoM) -1.0% 2.6% GBP MEDIUM Retail Sales (YoY) 5.0% 5.3% USD MEDIUM Existing Home Sales(MoM) -4.3% 1.0% USD HIGH Existing Home Sales 4.67M 4.87M

5 Weekly Update newsletter provides insights and themes for Indian equity markets. We also try and cover international themes for the week. This newsletter covers the most preferred trading strategy for the week. In the Weekly Stock Recommendation section, we recommend a stock which is likely to move significantly in the short term, clearly defining the supports, resistances and bias for the stock. Contact: MoneyPlex Securities Pvt. Ltd. 4, Apollo house, 84, B. S. Marg, Fort, Mumbai Tel : / feedback@moneyplexindia.com DISCLAIMER: This is solely for information of clients of Money Plex Securities and does not construe to be an investment advice. It is also not intended as an offer or solicitation for the purchase and sale of any financial instruments. Any action taken by you on the basis of the information contained herein is your responsibility alone and Money Plex Securities its subsidiaries or its employees or associates will not be liable in any manner for the consequences of such action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained in this recommendation, but Money Plex Securities or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this recommendation or any action taken on basis of this information. Technical analysis studies market psychology, price patterns and volume levels. It is used to forecast future price and market movements. Technical analysis is complementary to fundamental analysis and news sources. The recommendations issued herewith might be contrary to recommendations issued by Money Plex Securities in the company research undertaken as the recommendations stated in this report is derived purely from technical analysis. Money Plex Securities has based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Money Plex Securities makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. The opinions contained within the report are based upon publicly available information at the time of publication and are subject to change without notice. The information and any disclosures provided herein are in summary form and have been prepared for informational purposes. The recommendations and suggested price levels are intended purely for trading purposes. The recommendations are valid for the day of the report however trading trends and volumes might vary substantially on an intraday basis and the recommendations may be subject to change. The information and any disclosures provided herein may be considered confidential. Any use, distribution, modification, copying, forwarding or disclosure by any person is strictly prohibited. The information and any disclosures provided herein do not constitute a solicitation or offer to purchase or sell any security or other financial product or instrument. The current performance may be unaudited. Past performance does not guarantee future returns. There can be no assurance that investments will achieve any targeted rates of return, and there is no guarantee against the loss of your entire investment. POTENTIAL CONFLICT OF INTEREST DISCLOSURE (as on date of report) Disclosure of interest statement Analyst interest of the stock /Instrument(s): - No. Firm interest of the stock / Instrument (s): - No.