INDEX witness profit booking after its five months winning streak!!!

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1 Monthly Review July 2014 INDEX witness profit booking after its five months winning streak!!! With the past five months gains of 1611 points, in the fifth month index has formed the spinning top at the all-time high levels, suggesting some profit booking and sell off to be witnessed. As stated in our earlier monthly report, rallies do come in legs. Nifty posted a green candle with a gain of 1.45% making a high of , during the month we saw much appreciation with the Auto, IT and FMCG gaining from 2-7% respectively, whereas the Energy and Infra stocks were deeply in red around 4-6%. The HSBC manufacturing purchasing managers' index (PMI) which gauges factory activity based on data from 500 large companies inched up to 51.5 in June from 51.4 in May on the back of improved export orders and higher output. Industrial growth quickened to a 19-month high in May, (IIP), rose 4.7% in May from 3.4% in the previous month, the sharpest increase since October 2012 The year-on-year inflation measured by monthly CPI stood at 7.02 per cent for May as compared to 7.08 per cent for the previous month and per cent during the corresponding month of the previous year. Along with the corporate earnings, investors are now eyeing RBI's monetary policy due on 5 th August 2014, the first since the Budget was announced. "The undertone in the market continues to be bullish in the medium term, though the short run might be dictated by foreign flows. In the coming month, we are much likely to see the range bound moment within , traders are advised to be on the short side during the month with upside cap around levels and down side we can see the lower levels at P a g e

2 Economic Updates July 2014 Industrial growth quickened to a 19-month high in May, providing cheer to the new government that on Thursday unveiled its first budget with a heavy emphasis on reviving the country's manufacturing sector and economy. Industrial output, as measured by the Index of Industrial Production (IIP), rose 4.7% in May from 3.4% in the previous month, the sharpest increase since October (ET) Retail inflation fell to 30-month low of 7.31 per cent in June, mainly on account of lower prices of food items, including vegetables, cereals and meat. The retail inflation, measured on consumer price index (CPI), was 8.28 per cent in May. Its lowest was 7.65 per cent in January, 2012, the month the government started releasing the data in percentage terms. (ET) Exports grew in double digits for the second month in a row in June at per cent, but a rise in gold imports pushed the trade deficit to 11-month high of USD billion. Imports increased by 8.33 per cent year-on-year to USD billion in June. (ET) India is the only big emerging economy to escape a cut in the International Monetary Fund's update of its World Economic Outlook that says the global economy seems to have tripped on an unexpected contraction in the US economy in the first quarter. IMF has retained its forecast of 5.4% growth in Indian economy in 2015 and a stronger 6.4% growth next year. (ET) Borrowings by Indian firms declined by over 3 per cent from a year ago to $ 1.89 billion in June 2014, according to Reserve Bank data released. During June 2013, India Inc had raised $ 1.95 billion from overseas markets by way of external commercial borrowings (ECBs). (ET) Engineering exports grew at an impressive rate of per cent to $ billion during the April-June quarter this fiscal helped by robust expansion in shipments of aircraft and spacecraft parts and automobiles. Exports of aircraft and spacecraft parts rose to $ 1.5 billion in the first quarter of from $ 574 million in the year-ago period, engineering export body EEPC India said. (ET) Indices Performance Index July 31, 2014 June 30, 2014 % Change BSE SENSEX NIFTY BSE-MIDCAP CNX BSE-SMALLCAP Comparison with Global Indices Index July 31, 2014 June 30, 2014 % Change CNX Nifty Dow Jones Nasdaq FTSE CAC DAX Hang Seng Nikkei Sectoral Performance Sectors July 31, 2014 June 30, 2014 % Change BankNifty CNXAUTO CNXENERGY CNXFMCG CNXINFRA CNXIT CNXMETAL CNXPHARMA Monthly Advances & Declines (NSE) Month Advances Declines A/D Ratio June May Apr Mar Feb P a g e

3 Corporate News Hindustan Unilever Ltd reported a 3.68% increase in net profit at Rs 1,057 crore for the quarter ended June 30, The total income rose 10.4% to Rs 7,716 crore as against Rs 6,986 crore in June Overall expenses in Q1 stood at Rs 6, crore, as against Rs 5, crore in the year-ago period. (BS) Larsen and Toubro reported an over two-fold rise in consolidated net profit at Rs 967 crore for the April- June quarter, buoyed by a Rs 1,382-crore gain on disinvestments. Net sales rose to 18, crore compared to 17, crore. (BS) Wipro reported a 29.5% growth in its consolidated net profit at Rs 2,103.2 crore for April-June period, helped by large deals in the application and infrastructure space. Consolidated net sales rose by 15.5% to Rs 11,245.5 crore in April-June quarter of the current fiscal from Rs 9,733.2 crore in the same quarter of (BS) Reliance Industries (RIL) reported a 13.7% rise in first quarter consolidated net profit on the back of higher refining margin. Consolidated net profit in April-June quarter at Rs 5,957 crore was 13.7% higher than Rs 5,237 crore in the same period a year ago. The total income increased from Rs 99,895 crore for the quarter ended June 30, 2013 to Rs 106,614 crore in April-June this year. (BS) Crompton Greaves has decided to demerge its consumer products business, the company announced. The consumer products division, which manufactures lights and fans, contributes about 20% to group's turnover and 50% to its earnings before interest and tax. (BS) Infosys reported 21.57% growth in consolidated net profit to Rs billion for the quarter ended Jun. 30, 2014 as compared to Rs billion in the same period last year Revenues has increased to Rs billion for the quarter ended Jun. 30, 2014 from Rs billion for the quarter ended Jun. 30, 2013, representing an increase of 13.3%. (Myiris) Nifty Monthly Gainers Scrip July 31, 2014 June 30, 2014 % Change HINDALCO SUNPHARMA LUPIN IDFC RANBAXY BHARTIARTL Nifty Monthly Losers Scrip July 31, 2014 June 30, 2014 % Change JPASSOCIAT JINDALSTEL CAIRN LT BAJAJ-AUTO TATAPOWER CNX 500 Monthly Gainers Scrip July 31, 2014 June 30, 2014 % Change SINTEX ORISSAMINE IBPOW BBTC WELSPUNIND TATASPONGE CNX 500 Monthly Losers Scrip July 31, 2014 June 30, 2014 % Change SHRENUJ REIAGROLTD PSL GTLINFRA_T DRDATSONS ORBITCORP P a g e

4 Future Outlook August 2014 NIFTY Spot Monthly Chart The index since last two months is seen trading in the broad range of after the strong up move in May 14 and can be seen as a base formation for the next couples of months. Prices on the monthly chart have clearly enter in some correction zone, as we see the spinning top candles stick formation at the top, this simply suggest that we are lined up with breather or for some halt before the fresh move begins or declines. Going ahead if the previous month low is breached on closing basis then we may see some more months of correction toward mark. Only a decisive breach of 7400 will derail the current uptrend in the market. On the higher side the recent highs of July 2014 placed at 7840 levels is likely to act as major resistance in the short term Roller over in nifty are comparatively less than the previous months but better than the three months average, whereas the strong hands in the market has already shifted there longs in patches. We expect implied volatile to rise from the current levels which may pressurize nifty for time being. Traders are advised to wait for meaningful declines for fresh longs. Outlook for the Month SIDEWAYS Market Indices Sensex: Nifty: 7721 Trend CORRECTIVE Trend Reversal ONLY BELOW 7400 Strategy SELL ON RISE Level to watch Support: 7400 / 7230 Resistance: 7850 / 7900 Technical Picks GMR INFRA - BUY HEXAWARE - SELL 4 P a g e

5 Nifty OI Call Put Analysis Sector For The Month BSE CONSUMER DURABLES Daily Chart What Charts Speak? Made Doji candles at top in daily chart. Head & Shoulder pattern breakdown in daily chart. Fall is more wild then rise from June onwards. Oscillator RSI has taken the resistance of trendline breakdown and is moving well below the same in daily chart. After a sharp rally from to in five months ended June 2014, BSE CONSUMER DURABLES has made three Doji candles in daily chart, where the rally has halted. From last one month index is moving in sideways direction. The ongoing consolidation has resulted into formation of Head and Shoulder pattern in daily chart. Recently index has given neckline breakdown from the mentioned pattern (as seen in chart). Additionally the momentum oscillator RSI has taken the resistance of trendline breakdown and is moving well below the same in daily chart, suggesting weakness in Consumer Durable counters in upcoming weeks. Some of the CONSUMER DURABLES counters like Titan, Bajaj Electricals and Videocon Industries can be traded with negative bias for the month. 5 P a g e

6 Technical Picks GMR INFRA CASH- BUY CMP: The stock prices of GMRINFRA had given a bullish reversal pattern breakout at around levels on April 14 known as 'INVERSE HEAD AND SHOULDER. After breakout the prices went up to reach the levels of 38 and have now corrected back to the breakout levels which is a strong confluence zone of support formed by 50% retracement level of medium term rally (10-38) and 200DMA. The prices on weekly charts have formed a strong bullish candle stick pattern known as 'BULLISH ENGULFING and have registered 'HIGHER TOP HIGHER BOTTOM' price cycle which indicates strength in the bulls. Technically it can be presumed that as long the prices sustains the 'HIGHER TOP HIGHER BOTTOM' price cycle a strong pull back from the current levels cannot be ruled out. Recommendation: Looking on the entire above scenario we give a positional buy on GMRINFRA at/above 28 with SL of 26 for targets of 33/38. HEXAWARE FUTURE SELL CMP: As seen in the chart, stock prices of HEXAWARE have given a bearish trend line breakdown which resembles a 'HEAD AND SHOULDER' bearish reversal pattern. The prices for last two months were trading in a narrow range of levels and last week the prices by giving a close below 140 levels have completed a bearish 'RECTANGULAR CHANNEL' breakdown. The impact of the above patterns can lead prices to the downside of 125/115 in near term. In daily chart, prices are well below the short term and medium term moving averages i.e. 20SMA, 50SMA and 200SMA which indicates overall bearishness in the counter. Momentum oscillators like RSI and MACD are in negative zone supporting the sell call. Recommendation: We recommend traders to go short in HEXAWARE FUT at/below 141 with SL of 147 for targets of 125/ P a g e

7 Global Economic Calendar August 2014 Source : mcxindia.com Performance Overview July 2014 Booked in Profit 55 Exited at Cost 19 Exited in Loss 32 Total Calls Given in the Month 106 Assumptions in Calculation: The invested capital per trade is One lot traded for each future call. The number of lots in options will vary depending on the price per lot since a fixed capital base of has been assumed. Calls which were exited with ROI of more than 0.80% are treated as Exited in Profit. Calls exited in between % to % has been treated as Exited at Cost. Calls exited with loss of more than -0.80% Exited in Loss. 7 P a g e

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