Gladiator Stocks: Reliance Industries Scrip I-Direct Code Action Target Stoploss Upside Reliance Industries RELIND Buy in the range of 925.00-945.00 1070.00 865.00 14% Time Frame: 6 Months Research Analysts Dharmesh Shah dharmesh.shah@icicisecurities.com Pabitro Mukherjee pabitro.mukherjee@icicisecurities.com Nitin Kunte, CMT nitin.kunte@icicisecurities.com Vinayak Parmar vinayak.parmar@icicisecurities.com Ninad Tamhanekar, CMT ninad.tamhanekar@icicisecurities.com January 9, 2018
Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Reliance Industries (RELIND): Stock gearing for next leg of up move CMP: 940.00 Buying Range: 925-945 Target: 1070.00 Stop loss: 864.00 Upside: 14% Stock Data 52 Week High / Low 959.5/506.4 50 days EMA 911 200 days EMA 803 52 Week EMA 780 Face Value ( ) 10 Market Capitallisation ( Cr.) 595508 Recommended on i-click to gain at 10:34 on January 9, 2018 Stock price vs. Nifty 50 1,100 1,000 900 800 700 600 500 400 Price performance last five years 40% -60% Reliance Industries 7% 0% 14% 7% Nifty 9,500 9,000 8,500 8,000 Source: Bloomberg, NSE, ICICIdirect.com Research 10,500 10,000 70% Year 2013 2014 2015 2016 2017 Technical View Reliance Industries (RIL) is India s leading company engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. The share price of RIL was consolidating after recording a 52-week high of 960 in November 2017. Since then, it has been trading in a contracting range. With today s price action, the share price logged a breakout from this consolidation suggesting recommencement of a secular up trend. Breakout of contracting triangle pattern signals resumption of primary uptrend After recording a high of 958 in October 2017, the share price has been oscillating in a contracting range where it continuously formed lower high and higher lows for almost two months. The entire price action during this period has taken the shape of a contracting symmetrical triangle pattern. Throughout this consolidation phase, the stock has firmly held 50 days EMA placed around 911, indicating that the secular bull trend is still intact. Today s price action led the stock to resolve out of a contracting symmetrical triangle pattern, where it has also broken out of five weeks high of 939, leading to higher high on the daily chart signalling end of corrective phase and resumption of the uptrend. The breakout from symmetrical triangle pattern indicates continuance of a bull trend. On the downside, the share price has a key support around 868 in the medium term as it is the 50% retracement of last leg of rally ( 779-958). Shallow retracement indicates robust price structure The overall positive structural trend still remains intact as the five weeks of rally from September to October 2017, went through nine weeks time wise correction, got retraced by 50% of the entire leg of up move. The limited price wise correction corresponding to elongated time correction shows inherit strength and foretell positive momentum, going ahead. RSI indicates resumption of upside momentum The 14-week RSI has also recorded breakout from falling trend line, drawn adjoining end of October 2017 end of November 2017 points and inching upward. The early signals of RSI breakout are confirming with the price action, signifying trend reversal and resumption of up trend. Conclusion The above-mentioned technical evidence suggests the two months consolidation is likely to conclude, in turn, giving a fresh entry opportunity. We expect the stock to move higher towards the projected target of 1070 in the medium term being the price equality of last leg of up move from 779 958. 2
Reliance Industries (RELIND): Daily Bar Chart Price Equality @ 1070 The symmetrical Triangle Breakout along with RSI Confirmation bodes well 958 Symmetrical Triangle Breakout 873 50-Day EMA 779 Daily RSI has given a downward trend line breakout after bottoming out at level of 45 Source: Bloomberg, ICICIdirect.com Research 3
Strategy Follow up Date Scrip Name Rec Price Target Stoploss CMP Return till date (%) 13-Jul-17 ABB 1460 1720 1320 1435-1.7% 1-Nov-17 Oberoi Realty 485 590 417 508 4.7% 30-Nov-17 Wim Plast 1360 1595 1220 1443 6.1% 1-Jan-18 Chambal Fertilisers 154 182 135 154 0.0% 1-Jan-18 National Fertilisers 73.5 90 66 77 4.8% 4-Jan-18 Titan Industries 872 1048 768 925 6.1% 4-Jan-18 Praj Industries 117 142 104 122 4.3% 5-Jan-18 Sun TV 1020 1220 918 1038 1.8% 5-Jan-18 ZEE TV 580 698 522 585 0.9% Summary Performance - Recommendations till date Total Recommendations 326 Open 9 Closed Recommendations 317 Yield on Positive recommendations 19.0% Positive Recommendations 244 Yield on Negative recommendations -8.0% Closed at cost 7 Strike Rate 79% 4
Price history of last three years Reliance Ind. 5
Notes It is recommended to enter in a staggered manner within the prescribed range provided in the report Once the recommendation is executed, it is advisable to keep strict stop loss as provided in the report on closing basis. The recommendations are valid for six months and in case we intend to carry forward the position, it will be communicated through separate mail. Trading portfolio allocation It is recommended to spread out the trading corpus in a proportionate manner between the various technical research products Please avoid allocating the entire trading corpus to a single stock or a single product segment Within each product segment it is advisable to allocate equal amount to each recommendation For example: The Momentum Pick product carries 3 to 4 intraday recommendations. It is advisable to allocate equal amount to each recommendation 6
Recommended product wise trading portfolio allocation Product Allocations Product wise Max allocation allocation In 1 Stock Number of Calls Return Objective Duration Momentum Picks- Intraday Momentum Picks- Positional 10% 30-50% 2-3 Stocks 1-2% Intraday 25% 8-10% 6-8 Per Month 5-8% 1 Month Stocks on the move 25% 12-15% 6-8 Per Month 10-12% 3 Months Gladiator Stocks 35% 15-20% 20-30% 6 Months Cash 5% 100% - 7
Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai 400 093 research@icicidirect.com 8
Disclaimer ANALYST CERTIFICATION We /I, Dharmesh Shah, Nitin Kunte, Pabitro Mukherjee, Ninad Tamhanekar and Vinayak Parmar Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities Limited is a SEBI registered Research Analyst with SEBI Registration Number INH000000990.ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. ( associates ), the details in respect of which are available on www.icicibank.com ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this section have been prepared by ICICI Securities and are subject to change without any notice. 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 ICICI Securities. While we would endeavour to update the information herein on reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Nonrated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this company, or in certain other circumstances. The research recommendations are based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. These research recommendations 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. ICICI Securities will not treat recipients as customers by virtue of their receiving these recommendations. Nothing in this section constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed herein may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of these recommendations. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. 9
Disclaimer ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned herein during the period preceding twelve months from the date of these recommendations for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned herein in the past twelve months. ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its Analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this reports. It is confirmed that Dharmesh Shah, Nitin Kunte, Pabitro Mukherjee, Ninad Tamhanekar and Vinayak Parmar, Research Analysts giving these recommendations have not received any compensation from the companies mentioned herein in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the company/companies mentioned herein as of the last day of the month preceding the publication of these research recommendations. Since Associates (ICICI group companies) of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned herein. It is confirmed that Research Analysts do not serve as an officer, director or employee or advisory board member of the companies mentioned herein. ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented herein. Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned herein. We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities. This report or recommendations are not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. 10