Gladiator Stocks Scrip I-Direct Code Action Target Stoploss Upside Tata Power TATPOW Buy in the range of 79.000-82.00 98.00 72.00 22% 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 Dipesh Dagha dipesh.dagha@icicisecurities.com October 9, 2017
Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Tata Power (TATPOW): Stock rebounding from major support area CMP: 81.00 Buying Range: 79-82 Target: 98.00 Stop loss: 72.00 Upside: 22% Stock Data 52 Week High / Low 91.15/67 50 days EMA 81 200 days EMA 80 52 Week EMA 80 Face Value ( ) 1 Market Capitallisation ( Cr.) 14806 *Recommendation given on i-click to gain on October 09, 2017 at 09:28 hrs Stock price vs. BSE 100 100 95 90 85 80 75 70 65 60 Price performance last five years -50% Tata power -17% -7% -17% BSE100 9,500 9,000 8,500 8,000 12% 8% Year 2013 2014 2015 2016 YTD Source: Bloomberg, BSE, ICICIdirect.com Research 10,500 10,000 Technical View Tata Power is India's largest integrated power company with a significant international presence. The company has an installed generation capacity of 10,496 MW in India and a presence in all segments of the power sector fuel and logistics, generation (thermal, hydro, solar and wind), transmission, distribution and trading. The share price of Tata Power underperformed during 2010-15 as the stock price corrected from 142 to 55 levels. The stock witnessed a reversal of trend during March 2016 after forming a double bottom around 55 levels. Since then, it has constantly moved higher forming a rising peak and rising trough on the weekly chart. In the current scenario, for the last four months the stock has been forming a consolidation base around the major support area of 75-78. The current consolidation appears to achieve maturity. The stock price is likely to resume its previous up move. Thus, it provides a fresh entry opportunity from a medium-term prospective. Price rebound from key value area suggests strength in price structure. The stock witnessed a steady up move during December 2016 to March 2017 rallying from a low of 67 in November 2016 to its 52 week high of 91 in March 2017. After the strong up move the stock entered into corrective phase to work off the excesses developed in the major up move. The corrective price decline off the 52 week high of 91 got anchored near key value area of 75-78 being the confluence of the following technical parameters: The 61.8% retracement of the preceding major up move from 67-91, is placed at 76 levels The long term 52 weeks EMA that has acted as strong support in the recent rally is also placed around 78 levels The lower band of the medium term rising channel placed around 77 levels Formation of bullish hammer candlestick pattern on the weekly chart during previous week at the major support area of 75-78 signals a potential reversal of trend and offers fresh entry opportunity to ride the next up move in the stock. Gradual retracement of previous rising segment augurs well Time wise, the recent corrective consolidation has already taken 27 weeks against the preceding 18 weeks up move from 67 to 91, which was price wise retraced by just 61.8%. Shallow price wise correction and elongated time wise consolidation highlights the robust price structure. Momentum oscillators, volume indicate strength in price structure Among oscillators, the weekly 14 period RSI is rebounding from its previous lows and the bull market support reading of 40. The recent consolidation was accompanied by strong volume of almost double of the 50 weeks average volume of 2 crore share per week indicating larger participation in direction of the trend Conclusion Based on the aforementioned technical observations, we believe the stock has concluded a corrective consolidation phase and presents a good buying opportunity for the medium term. We expect the stock to enter an uptrend and head towards 99 over the medium term as it is the price parity of the previous up move from 67 to 91 (91-67=24 points) added to the recent trough of 75 projects upside towards 99 (75+24=99) in medium term. 2
Tata Power (TATPOW): Weekly Candlestick chart Chart Recent consolidation appears to have achieve maturity as the stock is likely to resume its previous up move thus provides fresh entry opportunity for medium term prospective 91 Price parity with previous up move and upper band of the channel @ 99 84 75 55 55 67 Base formation for last four months at the major support area of 75-78 being the confluence of -The lower band of the rising channel - 61.8% retracement of the previous up move - The long term 52 Weeks EMA Strong volume at consolidation area indicates larger participation at support area The weekly 14period s RSI is rebounding from its previous lows Source: Bloomberg, ICICIdirect.com Research 3
Strategy Follow up Open Recommendations: Date Scrip Name Rec Price Target Stoploss CMP Return till date (%) 13-Jul-17 ABB 1460 1720 1320 1381-5.4% 13-Jul-17 VA Tech Wabag 665 795 570 585-12.0% 19-Jul-17 Sundaram Finance 1650 1990 1490 1695 2.7% 27-Jul-17 GE T&D 408 505 355 385-5.6% 2-Aug-17 United Spirits 2580 3150 2298 2345-9.1% 3-Aug-17 Philips Carbon 590 1050 840 935 58.5% 16-Aug-17 NCC 85.5 112 73 85-0.6% 16-Aug-17 Simplex Infrastructure 460 589 395 482 4.8% 13-Sep-17 Reliance Naval Engineering 56 69 47.5 52-7.1% 18-Sep-17 Asian granito 485 615 430 495 2.1% 19-Sep-17 PNB 143 170 129 136-4.9% 19-Sep-17 Bank of India 154 182 139 140-9.1% Summary Performance - Recommendations till date Total Recommendations 299 Open 12 Closed Recommendations 287 Yield on Positive recommendations 18.0% Positive Recommendations 220 Yield on Negative recommendations -8.0% Closed at cost 6 Strike Rate 78% 4
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 5
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% - 6
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 7
Disclaimer ANALYST CERTIFICATION We /I, Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee, 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. 8
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