Product Note. Specifications of the Product

Transcription

1 August16, 2015

2 Product Note Smart Trader is a weekly product which will help clients to take Long as well as Short Positions based upon swing movement from the universe of NSE F&O stocks. The report, comprising 8 stock recommendations, will be released before the first trading day of the week. The stock selection will be based upon Technical and Derivative parameters, considering the overall momentum of the market. Most of the stocks may be Momentum based recommendations, valid for a period of 1 week. Specifications of the Product The report will be released every week and the evaluation for the previous week will be sent in the next week s report on a weekly basis. Recommendations could be a mix of Long & Short positions depending upon market conditions. The minimum risk : reward ratio in the each recommendation shall be maintained at 1:1.50 times. The stock should get initiated on the first trading day of the week, before A.M otherwise, it would be considered as Not Initiated (NI). The open positions will be closed upon achieving targets (TA) or hitting stop loss levels (SLT) and rest all open positions will be closed on the last trading day of the week at 3 P.M. in loss (CIL) or profit (CIP). The report will be communicated through mail and also will be uploaded on & our social media channels. Target Achieved/Stop Loss triggered messages will be flashed during the LIVE market on the GOTX / NEST trading terminal under the head Smart Trader. 2

3 Market View NIFTY (8518): The week passed by remained quite disappointing for market participants, after posting a swing high of on Monday, Nifty corrected sharply and after four days of continuous drubbing, witnessed smart recovery on Friday. Lastly week ended at with marginal cuts of or 0.54% on closing basis. The week started on a pessimistic note, as logjam in parliamentary sessions remained major concern, sentiments were also weighed down after Indian rupee reversed its gains to slip near the key 65 per dollar mark against the US dollar on the back of unexpected devaluation of Yuan. The relief came with report that India's retail inflation easing to 3.78% in July from 5.40% in June, and growth in factory output accelerated to 3.8% in June from 2.5% in the previous month which strengthened the case for an interest rate cut soon. While the positive sentiments picked up on Friday after Wholesale Price Index (WPI) inflation contracted further in July 2015 to (-) 4.05% from (-) 2.4% in June which is 9th straight monthly fall in wholesale inflation also supported by the fact that government keeping its options open on convening a special session of Parliament for enacting the GST law. From last one month Nifty is tangling between broader range of 8300 to 8650, and breakout on either side will trigger further momentum of another points in the same direction. In the last week Nifty after posting a low of witnessed smart recovery and it is likely to retest zenith of Technically, Nifty closed above its 21 & 50-DEMA and also it is well placed above its major 200-DEMA exhibiting support. Overall in absence of major trigger, we expect Nifty will continue to trade in a broader range of 8300to 8650 levels, and buying a on dips would be recommendable. 3

4 List of Stocks STOCK SECTOR CMP ACTION ENT SL TGT VIEW ASIANPAINT CONSUMER DURABLES BUY HCLTECH SOFTWARE BUY HDFCBANK PRIVATE BANKING BUY STAR PHARMA BUY SKSMICRO FINANCIALS BUY APOLLOHOSP PHARMA SELL APOLLOTYRE TYRES SELL HINDZINC METALS SELL Refers to (if any call is not initiated, entry levels for the recommendation(s) will be sent on the trading terminal(s) CMP: Current Market Price ENT : Entry SL: Stop Loss TGT: Target * The stock is in ban in F&O segment, can take positions only in Spot market. 4

5 BUY ASIANPAINT CMP: Sector : CD Entry 895 Stop Loss 860 Target DEMA DEMA Open Interest Shares Weekly Change in OI -0.38% CoC( % ) ASIAN PAINTS is in the cycle of higher highs and higher lows on daily, indicating the stock is in uptrend. ASIAN PAINTS is one of the out performers in Nifty, which is evidenced by the fact that this stock is at life time highs, where as Nifty is still trading around 6.50% below its life time highs. In its recent correction, the stock found good support at its previous swing high zone of 860 levels, and resumed its uptrend. The volumes on the correction are also low when compared with volumes on the up move, indicating the stock is in the hands of strong hands. Over last two sessions, as per the derivative data, the stock s current month futures has witnessed a long addition. Hence a buy with stop loss below the said lows of 860 for targets into unchartered territory. 5

6 BUY HCLTECH CMP: Sector : SOFTWARE Entry 970 Stop Loss 929 Target DEMA DEMA Open Interest Shares Weekly Change in OI -2.52% CoC( % ) 7.49 HCLTech has given a breakout to the cluster of moving averages trading between levels during the last week. On the daily chart, the stock is taking support of the upward sloping trendline drawn from the low of Rs made on 21 st April Among the oscillators, the 14-day RSI is trading in the comfortable zone above the signal line pointing northwards. The MACD is hovering around the zero line trading along the mean line giving an excellent opportunity to buy at current levels. On the derivatives front, the stock has seen closure of short positions to the tone of 2.52% during the last week with a price gain of 3.66%. Thus, one may go long with aforementioned levels from a one week perspective. 6

7 BUY HDFCBANK CMP: Sector : BANKING Entry 1100 Stop Loss 1067 Target DEMA DEMA Open Interest Shares Weekly Change in OI 2.43% CoC( % ) 9.55 The stock has been in up trend forming higher highs and higher lows from the swing low of After making a swing high of 1128 the stock has retraced towards the support zone zone where the stock is finding support near its 51 DEMA. The lower daily Bollinger band is pegged at levels further validating the support zone near zone. On oscillator front the 14 days-rsi is hovering around 55.5 indicating that correction was just a pause in the larger up trend. On weekly charts the 14 days-rsi is still above its 9 days EMA indicating a bullish bias and the support zone has acted as a reversal area of the immediate down trend from the highs of

8 BUY STAR CMP: Sector: PHARMA Entry 1300 Stop Loss 1245 Target DEMA DEMA Open Interest Shares Weekly Change in OI -1.90% CoC( % ) The stock is in secular uptrend with higher highs and higher lows in weekly chart as well as in daily chart. The stock is trading above its 21/50/100/200 Day EMA levels indicating strength in the counter in all time frames. The 14 day RSI is quoting at and it is just moving above the 9 day average indicating positive momentum in the counter. Other leading indicator Heiken candlesticks indicates beginning of fresh uptick in the stock. Parabolic SAR is trading below the CMP and it indicate the positive trend in the stock. On Bollinger bands in daily charts the price is moving northwards after testing the mean indicating positive momentum in the counter. 8

9 BUY SKSMICRO CMP: Sector : FINANCIALS Entry 540 Stop Loss 513 Target DEMA DEMA Open Interest Shares Weekly Change in OI 32.57% CoC( % ) The stock is in secular uptrend with higher highs and higher lows in weekly chart. However it was in short term corrective phase from its 52 week high of to505.4 levels. Stock has formed hammer candlestick pattern in weekly chart indicating that the reversal of its short term corrective trend.the stock is trading above its 21/50/100/200 Day EMA levels indicating strength in the counter in all time frames. The 14 day RSI is cooled off from over bought levels to levels and again started moving to levels indicating a fresh leg of up movement. Other leading indicator Heiken candlesticks indicate the beginning of fresh uptick in the stock. On Bollinger bands in weekly charts the price is moving northwards after testing the mean indicating positive momentum in the counter. 9

10 SELL APOLLOHOSP CMP: Sector : PHARMA Entry 1360 Stop Loss 1420 Target DEMA DEMA Open Interest Shares Weekly Change in OI 11.56% CoC( % ) Apollo Hospital has moved below its previous minor swing highs zone of , indicating the stock can slide further in the near term. Adding to the weakness, the stock is getting resisted at its previous major life time and swing highs zone of and also formed a outside bar (Bearish Engulfing) pattern at the said levels, indicating the change in short term trend to down. The stock also have an unfilled gap on daily chart at levels, which might act as resistance for any pullback rally in the near term. On the derivative front, the stock s current month futures has witnessed a short built up through out the week which is evidenced by the increase in OI and decrease in price. 10

11 SELL APOLLOTYRES CMP: Sector: TYRES Entry Stop Loss Target DEMA DEMA Open Interest Shares Weekly Change in OI % CoC( % ) 8.04 The stock has seen a lower top at the highs of and has see a sell off from there towards 180. from there the stock is currently witnessing a dead cat bounce. The stock has seen huge volume on the fall and volume is lower on the rise indicating a weak rally. The stock is trading well below its middle Bollinger band which is pegged at199.9 The derivative data suggests, closure of long positions to the tone of 11.67% during the last week with fall in price by 9.46% support our bearish view on the stock. Hence we recommend traders to sell short the stock at for a target of 174 with a stop loss of

12 SELL HINDZINC CMP: Sector : METALS Entry Stop Loss Target DEMA DEMA Open Interest Shares Weekly Change in OI 6.15% CoC( % ) Hindzinc has declined over 6.47% last week with notable volumes. The stock has given breakdown confirmation of Descending channel pattern on daily charts. This tends to show that the security is likely witness selling pressure in coming trading sessions. On weekly charts the price is making lower lows and lower highs indicating that the demand for the stock is decreasing and downside momentum is likely to become stronger. The security is currently trading well below its major moving averages, which adds weight to our bearish sentiment. Overall the metal space is looking weak. Derivative date suggests that short addition has been witnessed with 6.15% increase in open interest and 6.47% decline in price.. 12

13 Previous Week s Evaluation STOCK ACTION STOP LOSS TARGET RETURN (%) WEEKLY HIGH WEEKLY LOW OUTCOME AXISBANK BUY SLT BPCL BUY SLT TATACOMM BUY SLT TCS BUY TA JUSTDIAL SELL MCLEODRUSS SELL RELCAPITAL SELL TA TATACHEM SELL TA Average Return : 1.74 % *TA: Target Achieved SLT: Stop loss Triggered 13

14 Disclaimer KARVY RESEARCH DESK STOCK BROKING JK Jain Head Research Analyst Certification The following analyst(s), J K Jain, 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. Disclaimer Karvy Stock Broking Limited [KSBL] is a SEBI registered Stock Broker, Depository Participant, Portfolio Manager and also distributes financial products. The subsidiaries and group companies including associates of KSBL provide services as Registrars and Share Transfer Agents, Commodity Broker, Currency and forex broker, merchant banker and underwriter, Investment Advisory services, insurance repository services, financial consultancy and advisory services, realty services, data management, data analytics, market research, solar power, film distribution and production profiling and related services. Therefore associates of KSBL are likely to have business relations with most of the companies whose securities are traded on the exchange platform. The information and views presented in this report are prepared by Karvy Stock Broking Limited and are subject to change without any notice. This report is based on information obtained from public sources, the respective corporate under coverage and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of KSBL. While we would endeavor to update the information herein on a reasonable basis, KSBL is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent KSBL from doing so. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. KSBL will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither KSBL nor any associate companies of KSBL accepts any liability arising from the use of information and views mentioned in this report. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Past performance is not necessarily a guide to future performance. Forward-looking statements are not predictions and may be subject to change without notice. Actual results may differ materially from those set forth in projections. Contd.. 14

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