Research Desk StockBroking India ValueMax April 01, 2017 ValueMax Monthly Investment Ideas ValueMax helps clients to take a long stance on stocks from thes&pbse-100 universe. Comprising monthly technical investment ideas, ValueMax will have 10 stock recommendations, which will be issued at the beginning of every month. The selection and recommendation criteria will be based on technical analysis. ValueMax will be made available to the dealers and relationship managers through Karvy Mail. A brief technical report on the ideas will also be released, justifying our view on the stocks and the reason for the selection. The report is also available on Karvy online websites. Book profit/exit messages will be communicated during the LIVE market on NEST (trading terminal) under the head ValueMax. Please find the ValueMax investment ideas for April 2017. ACC CEMENT 1446.05 BUY 1400 1360 1540 1590 ASIANPAINT CD 1073.50 BUY 1030 995 1180 1225 EXIDEIND AUTO 224.35 BUY 212 207 242 250 IOC ENERGY 387.05 BUY 371 357 420 435 LT CG 1574.90 BUY 1495 1425 1725 1775 SBIN BFSI 293.40 BUY 275 261 325.50 335 SRTRANSFIN BFSI 1078.00 BUY 1030 1000 1160 1180 UPL CHEMICAL 726.90 BUY 690 666 790 810 VEDL METALS 274.95 BUY 265 255 300 310 ZEEL MEDIA 535.55 BUY 500 482 590 615 CMP:Current Market Price; SL: Stop Loss; TGT: Target Note: All charts are sourced from Spider Software. 1
ACC CEMENT 1446.05 Buy 1400 1360 1540 1590 21 day EMA 1415 1415 1480 50 day EMA 1411 1390 1540 200 day EMA 1437 1360 1600 The overall chart structure of the stock suggests formation of higher tops and higher bottoms on the monthly timeframe, clearly indicating that the stock is in a secular uptrend. After clocking life time high of 1736.40 levels in the month of August 2016 the stock went into correction which ended around 1256.55 levels in the month of November 2016. After breaking out of from a multi week consolidation zone of 1260-1385 levels the stock scaled to 1512 levels and went into correction mode. In its current correction stock has found support on the mean of weekly Bollinger band and formed a base above it before commencing its fresh up move. The correction from the highs of 1512 levels found support in the zone of 1370-1380 levels. The stock is trading above its medium 100 day EMA and long term 200 day EMA and currently hovering around them and formed base for an up move. The daily RSI 14 day (61.01) trading above its signal line (51.74) indicating that bullish bias in the counter. The daily, weekly and monthly MACD is in buy mode indicating smart buying in the counter. The daily CCI-20 is having a reading of 181.3 which indicates bullish bias. Among other technical observation daily DMI s are having a bullish signal as the plus DMI is above the Minus DMI indicating medium and long term up trend is intact. Our take: We expect the stock to resume its strong uptrend from here and hence any declines could be utilized for fresh long accumulation. We expect the stock to initially rise till 1540 levels and weekly close above that to toward the 1590 levels. 2
ASIANPAINT CD 1073.50 Buy 1030 995 1180 1225 21 day EMA 1051 1040 1090 50 day EMA 1020 1010 1180 200 day EMA 998 1000 1225 ASIANPAINT is India s leading paint manufacturer and market leader in decorative paints in India. The stock is in a secular bull trend from last many years and still ongoing trend of higher highs-higher lows and any technical pullback provides an excellent opportunity to accumulate stock on dips. In the mid of Oct 16 stock price has clocked an all time high of 1227.30, post which it witnessed sharp price correction on account of profit booking, the said correction was very sharp and eventually got arrested near 850 levels in end of Dec 16. On projecting Fibonacci Retracement from the major swing low of 693 to an all time high of 1227, it is been observed that prices retraced above the 61.8% of said range with its recent swing high at 1092.2 levels. On the daily chart, the stock is trading above its near term exponential moving averages. Among the indicators the MACD(12, 26, 9) setup on daily and weekly charts is trading in the positive territory, while RSI(14) on daily and weekly charts are plotted above 60 levels, indicating possible inherent bullish bias in the near term. On the daily charts, CCI(60) is plotting above +100 levels and has taken support from the Bollinger bands mean and is moving up to test upper band of Bollinger bands indicating the positive momentum in the stock The Parabolic SAR (Stop & Reverse) is placed well below the price on daily chart, suggesting buying will remain intact in the counter in near term. Our take: The stock witnessed a sharp turnaround since 850 levels and is maintaining its bullish stance since then providing an excellent opportunity to accumulate the stock. At the current levels one may buy stock, while any dip towards 970 levels can be utilized to average the stock price, for the higher target of 1180 and 1225 levels, keeping stop loss below 995 levels. 3
EXIDEIND AUTO 224.35 Buy 212 207 242 250 21 day EMA 216 218 230 50 day EMA 209 212 242 200 day EMA 188 208 250 EXIDEIND has been in a structural uptrend making higher highs and higher lows on weekly charts from December 2016. The stock had been trading in the bullish upward trend from few trading weeks making higher highs and not breaching the cycle of lower lows, trading well above its 100-DMA & 200-DMA on the daily charts indicating the inherent strength in the counter. After making swing low of 168.45 levels in the month of December 2016, the stock witnessed a one sided up move with spectacular momentum coupled by notable trading volumes clocking fresh all time highs of 226.50 levels. The stock is also trading above major short and long term moving averages with technical indicator 14 day RSI showing reading in the comfortable zone, clearly indicating the bullish trend is likely to remain intact in the counter. In the short term time frame, analyzing the price volume action, the stock seems to be extremely poised to move higher towards the psychological mark of 245-250 levels. On the other side, the Bollinger band (20, 2) on the daily charts is also pointing northwards with price rolling on its upper band indicating the direction of the counter is on the long side with supports on the lower side shifting higher with the lower band. Also the Parabolic SAR is also trading well below the current market price of the counter indicating northward movement is likely to continue. On the other hand, the overall chart structure of the counter seems to be bullish till the stock price is trading above its previous breakout levels of 205-207 levels, while dips towards the recent support levels of 212 may be utilized to average the stock. We expect the stock to trade in the uncharted territory in the coming few trading weeks and may test 242-250 levels. Our take: Taking the above the data facts in to the consideration, we recommend short term traders to enter the stock at the current levels for the potential targets of 242-250 levels. Any dip towards the 212 levels can be utilized to average the stock, with a strict stop loss placed below 207 levels. 4
IOC ENERGY 387.05 Buy 371 357 420 435 21 day EMA 373 375 400 50 day EMA 365 365 425 200 day EMA 310 350 440 IOC has ended the month of March with gains of 1.63% and outperformed Sectoral index, but it has underperformed both its broader market index and thematic index over last one month. Its broader index NIFTY NEXT 50, sectoral index NIFTY COMMODITIES and thematic index NIFTY ENERGY has gained 2.85%, 1.22% and 2.54%. In the recent NSE IISL indices rebalancing, the stock has elevated from NIFTY NEXT 50 to NIFTY 50, indicating the strength in the underlying market internals like free float, traded value and others. It is one of the stocks in erstwhile NIFTY NEXT 50 and current NIFTY 50 which is trading near its life time highs and we expect the stock to gather further momentum in the coming sessions and move further towards the unchartered territory. On a broader time frame, the stock has seen a vertical rally from the lows of sub 90 to the current levels of sub 400, which depicts the underlying long term strength of the fundamentals and technical s in the company. Towards the fag end of the March Month, the stock has given break out from a 20 day consolidation range with huge price and volume activity, indicating a start of fresh leg of up move in the counter. Even the derivative built up, roll over and delivery volumes percentage in the stock has improved significantly and supports our bullish view. On the oscillator front, the RSI on daily charts is placed at 67 with a positive crossover and is nowhere near the overbought zone, which indicates more upside is due in the counter from a short term perspective even after the recent breakout. Even the MACD is just entering into the positive territory with a positive crossover. Our take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the current levels for targets of 50% and 61.8% extension of the previous major rally, while any correction towards the recent major rally starting point of 366-372 can be utilized to average the stock keeping stop loss below the recent swing lows. 5
LT CG 1574.90 BUY 1495 1425 1725 1775 21 day EMA 1532 1520 1700 50 day EMA 1497 1495 1725 200 day EMA 1445 1425 1775 LT is heading strongly towards its previous swing high after taking a halt from it multi month support placed near 1294-1295 levels. The stock has witnessed a runaway gap in the third last week and is able to sustain above the same suggesting strength in its move. Also from past three trading weeks the stock has witnessed increase in average traded volumes supporting the bullish stance. On weekly chart, the stock has retraced well above its 61.80% on the Fibonacci series drawn from the recent swing high of 1586 to the recent swing low of 1295.10 levels and is heading strongly towards 100% retracement. Also the up move is well supported by volumes indicating positive biasness in the counter. On technical front, the 14 period RSI has seen a stellar rally from the lows of 27-30 levels (oversold zone) and is currently placed near 60-66 levels indicating further room in the counter to surge higher. Also the Parabolic SAR (Stop & Reverse) is placed below the current price supporting bullishness intact in the counter. On the daily chart, the stock is placed above all its major moving averages (21, 50, 100 & 200 DEMA) and is in the cycle of higher highs and higher lows. On indicator front, the 14 day RSI is placed near 62-66 levels indicating inherent strength in the counter. On the other hand, the stock made a runaway gap around 1517 levels with expansion in the Bollinger Band (20,2) indicating volatility burst on the daily charts coupled by notable trading volumes. On the derivative front, the stock has witnessed a rollover of around 94% clearly indicating the market perception for the counter is bullish and the momentum is likely to continue in coming trading sessions from short to medium term perspective. Our Take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the current levels for an upside target of 1725 levels breaching which the stock is expected to surge higher towards 1775 levels in coming trading weeks, while any correction towards 1495 levels can be utilized to average stock keeping a stop loss placed below the support zone of 1425 levels. 6
SBIN BFSI 293.40 Buy 275 261 325.50 335 21 day EMA 278 280 300 50 day EMA 272 270 315 200 day EMA 253 265 330 SBIN has ended the month of March with whopping gains of nearly 9% and has significantly outperformed both its broader market index and sectoral index over last one month. Its broader index NIFTY 50, sectoral index NIFTY BANK has gained 3.31%, and 4.06% respectively for the same month, indicating its outperformance in the indices and can be assumed as one of the major contributor for indices rally towards all time highs. Even on a quarterly basis, the stock has gained more than 17%, while NIFTY 50 has gained only 12%, indicating its star performance since the inception of the year. Going forward, we expect the stock to continue its current momentum in the coming weeks and move towards its life time highs. Towards the ending of last month, the stock has given break out from a 5 month trading range with an unfilled gap up and strong price volume activity, indicating possible start of fresh leg of bull market into the stock. On a broader time frame, the stock in its consolidation phase, it has respected its major medium term and long term moving averages, which indicates strong market players has been into the counter and they might have used every possible dip to add more into their portfolio. On the Bollinger band front on the charts, the stock is currently placed in the upper band and the band is expanding over last one month, indicating the volatility in the counter is likely to be higher and the momentum indicates the stock may retest its all time highs in the coming months. On the oscillator front, the RSI on weekly charts is placed at 66 and is nowhere near the overbought zone, indicating more upside is due in the counter. Our take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the current levels for targets of life time highs and much higher beyond it, while any correction towards the recent consolidation zone can be utilized to average the stock keeping stop loss below the consolidation zone. 7
SRTRANSFIN BFSI 1078.00 BUY 1030 1000 1160 1180 21 day EMA 1022 1042 1115 50 day EMA 987 1030 1160 200 day EMA 1001 1000 1180 SRTRANSFIN on the weekly and monthly charts has outperformed the broader index Nifty 50 and sectoral index NIFTYFINSE by a massive gains.the stock has ended up by 4.47 % over the last trading week, whereas the index ended higher by 0.72% and sectoral index moved higher by 1.66 % respectively. The stock on the weekly charts is in uptrend trading above its 21, 50 and 200 WEMA levels with increase in its momentum oscillator 14-period RSI indicating the positive momentum in the stock. The momentum oscillator is trading around 58 levels and pointing northwards indicating momentum likely to continue in the near future. The stock on the daily charts after forming a base around 785 odd levels has picked up momentum and has been making higher highs and higher lows with increase in volumes indicating strength in the stock. The stock in the past has moved above its crucial 200 DEMA levels indicating positive sentiment returning in the stock. On technical front 14 period RSI momentum is trading comfortably around 65 levels and pointing northwards and trading above its signal line indicating strength in the stock. On Bollinger band (20,2) the gap has been expanding after the stock witnessed a gap up indicating momentum in the stock. The stock over the past couple of trading sessions has been trading in a consolidation in a range of 1088-1020 and any break in this range would take the stock to higher levels around 1160-1180. Our take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the current levels for an upside target of 1160 levels breaching which the stock is expected to surge higher towards 1180 levels in coming trading weeks, while any correction towards 1030 levels can be utilized to average stock keeping a stop loss placed below the support zone of 1000 levels. 8
UPL CHEMICAL 726.90 BUY 690 666 790 810 21 day EMA 717 710 735 50 day EMA 710 690 755 200 day EMA 654 670 790 UPL has closed the previous month on flattish note posting gains around 1.20%. The stock is seen trading with a bullish bias on medium to longer term charts indicating stock has provided decent returns in the past. The stock is poised to continue its upward trajectory as the stock is trading well above its major moving averages viz (100, 200 Day-EMA). On the weekly charts, After clocking an all time high of 754.50 levels on 25 th January 2017, stock has witnessed a sideways to corrective price action and has found a decent support around its 100 Day EMA around 680 levels. Post which stock is been trading with a positive bias and a breach above the previous swing high levels, stock could trade in unchartered territory. On the daily charts, the stock is seen facing resistance to its falling trend line around 735 levels and a breakout from the said levels could take the stock test its previous swing high levels in the near future and sustenance above the previous highs could boost positive momentum on the stock and counter could rally towards 800-810 levels. On the oscillator front, 14 day RSI is trading above its mean level on the major time frames indicating stock has inherent strength and could continue with its upward momentum and rally towards our mentioned targets. Our take: Considering all the above data, we recommend traders to enter the stock at the current levels and averaging the stock on dips towards its 100 Day EMA around 690 levels. On the upside stock has potential to climb towards 800-810 levels while on the flip side a stop loss could be maintained at 666 levels. 9
VEDL METALS 274.95 BUY 265 255 300 310 21 day EMA 264 270 294 50 day EMA 256 265 300 200 day EMA 210 255 310 The stock is in structurally up move and seen making higher highs and higher lows on daily charts after making low of 58.15 levels on daily charts. Prior to that, the stock has seen sharp fall from the high of 318.30 levels. Which has dragged the stock to the low of 58.15 levels. Thereafter, the stock has resumed its up move and given V shape recovery with supportive volume on monthly charts. The stock has outperformed broader market and its peers significantly and closed the week with the gain of 2.96%. Whereas Nifty has closed the week with gain of 0.72% and peers like Tatasteel, Hindalco, Jindalsteel and Jswsteel has closed the week with return of -2.13%, 0.08%, 1.04% and 0.75% respectively. On technical setup, the 14 period RSI is pointing northwards given positive cross over with signal line which reflects strength in the counter. The MACD has given the positive crossover with signal line and entered in buy territory in weekly charts indicate up move in the stock will remain intact. The stock is trading very comfortably above all its major moving averages like 50 DEMA, 100 DEMA and 200 DEMA on daily charts, which reflects that the strength in the counter. The parabolic SAR is trading below the price on weekly charts which suggest that the uptrend in the stock will remain intact in near term. Our take : The bounce from the above said lower levels of 58.15 has retraced 61.8% of retracements levels drawn from the high of 318.30 levels to the low of 58.15 levels and trading well above the same with supportive volume formation. Hence, we suggest buy in the stock for the target of 300-310 levels with stop loss placed below 255 levels for the month. 10
ZEEL MEDIA 535.55 Buy 500 482 590 615 21 day EMA 522 520 560 50 day EMA 510 500 590 200 day EMA 483 482 615 ZEEL is one of our preferred picks from the Media sector. The stock is in a stellar bull run from the mid of 2012 and clocked its all time high of 589.90 levels towards the end of 2016. Thereafter the stock witnessed some profit booking and has corrected for more than 27% from where it consolidated and reverted back towards the highs once again. The stock has retraced for more than 61.80% on the Fibonacci series drawn from its all time highs of 589.90 levels to the recent swing low of 427.65 levels. Also it witnessed a range break out where it was consolidating from past few trading weeks ranging 500-530 levels backed by increase in average traded volumes suggesting strength in the breakout for the counter and which is likely to continue in near future. On weekly chart the 14 period RSI has seen strength in its rally from the recent swing low of oversold zone and is now placed comfortably near 58-63 levels suggesting further room in the stock price to inch higher. On indicator front, the Parabolic SAR (Stop & Reverse) is placed below the current price supporting bullishness intact in the counter. On daily chart, the stock is placed above all its major moving averages (21, 50, 100 & 200 DEMA) and is in the cycle of higher highs and higher lows. On indicator front, the 14 day RSI is placed near 60-64 levels indicating inherent strength in the counter. On the other hand the stock price is heading towards the upper band of the Bollinger (20, 2) from its mean affirming bullish momentum to continue in near future. On the derivative front, the stock has witnessed a rollover of around 79% clearly indicating the market perception for the counter is bullish and the momentum is likely to continue in coming trading sessions from short to medium term perspective. Our take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the current levels for targets of its all time high and above it to fresh 52 week highs, while any correction towards the zone of 501-500 can be utilized to average the stock keeping stop loss below previous major closing swing lows of 482. 11
KARVY RESEARCH DESK STOCK BROKING JK Jain Head Research QUERIES & FEEDBACK Toll-Free: 1800 419 8283 Email ID: service@karvy.com Karvy Stock Broking Limited Karvy Millenium Plot No : 31 Financial District Gachibowli Hyderabad - 500 032 Analyst Certification The following analyst(s), JK 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 registered as a research analyst with SEBI (Registration No INH200003265 ).KSBL is also a SEBI registered Stock Broker, Depository Participant, Portfolio Manager and also distributes financial products. 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