Derivatives Strategist 11th April 2013

Data Feeler: Nifty future finally witnessed relief rally after five days of continuous fall with buying emerged at lower support area around 5500 levels and a strong short covering rally was seen towards 5680 levels on the back of buying seen almost across the board. Nifty future for the day, if it sustains above 5580 levels may rally towards 5620-5650 levels whereas sustaining below 5550 levels may put selling pressure in the market towards 5500 levels. Looking at the option concentration data for April series, maximum put OI is shifted at 5400 followed by 5500 strike price and maximum call OI is at 5700 followed b y 5800 strike prices. Bank Nifty for the day it has strong support around 11000 levels whereas it has immediate hurdle around 11250-11400 levels.

 

Put Call Ratio based on Open Interest of Nifty moved up from 0.83 to 0.88 levels. Historical Volatility of Nifty moved up from 17.20 to 17.50 levels but Implied Volatility moved down from 16.82 to 16.71 levels.

 

Nifty future saw increase in OI by 4.72% with a rise in price by 1.15%. Market witnessed buying interest almost across the board especially in IT, Tech, CG, Banking, Realty, Auto, Power, CD and PSU sector stocks whereas selling pressure was seen only in FMCG space. Nifty future closed at premium of 5 points as compared to premium of 6 points in previous trading session.

 

The market turnover decreased by 8.8% in terms of number of contracts traded vis-à-vis previous trading day whereas in terms of rupees decreased by 9%.

 

Derivative Calls: Buy on HDFCBANK & TATA MOTORDVR

www.myshitphotography.com

Monthly Equity presentation - April 2013

Sustainability missing .

 

·        NIFTY (5495), Nifty after making fancy high of 6111(27 Month high) on 29^th January2013 has corrected till 5487 almost 10% from recent high. Nifty has closed below 200DMA 5645 while 200 Weekly M.A 5329 would form next support.

 

·        SENSEX (18226) has corrected till 18206 and strength is lacking and till Gap-down(19383-19378) is not crossed Month of April & May 2013 could see some pressure on overall market as we ahead towards result season and Budget session of parliament restarting 22^nd April.

 

 

Pick Of the month - NATCO PHARMA

 

·        Revenue distribution - Domestic formulations 40%, API's 28%, exports formulation 13% and others 19%.

·         Recent Supreme Court ruling on Glivec case is favourable for Natco as Natco's sales from this product is ~`250m annually.

·        Strong growth continues in API business and export formulation. Change in revenue mix (a higher proportion from high margin API business) is also contributing to the bottom line as well.

·         API business growth is seen due to increased supply of niche category APIs to domestic & export markets and export formulation is led by recently-announced Lansoprazole approval (a prescription product).

·         Successful monetization of para IV opportunities (Lansorazole OTC, Revlimid, Tamiflu, Copaxone etc) would provide substantial performance.

·         This will further be reflected in improved ROCE to 16.6% by FY15  and drop in DE to 0.2 x in the same period.

·         The stock trades at valuations of 15x FY14e and 12.7x FY15e earnings.

 

Picks of the Last month	Reco Price	High after Reco	% returns
Last month Pick
Rallis India (March 2013)	126	130.5	3.57
Cummins India (Feb 2013)	502	518.5	3.29
LIC Housing (Jan 2013)	289	290.45	0.50
Sun Pharmaceuticals Inds (Dec)	715	887	24.06
ING Vysysa Bank (Nov)	471	607	28.87
BASF (Oct)	665	781	17.44
Tata coffee (Sep)	993	1673.9	68.57
Bayer Cropscience (Aug)	922	1341	45.44
This month Pick
Natco Pharma (April 2013)	444

 

www.myshitphotography.com

News Views & Events 10th April 2013

News:

Ø  TCS has bought French firm Alti SA for over ?75 million (Rs.530 cr) in a deal aimed at giving the Indian company an edge in the European market.

Ø  The Supreme Court today asked a host of companies including Vedanta, Adani and Tata Steel and Essar Steel to pay up 50% of the tax demanded by the state of Odisha by way of entry tax for now.

Ø  Reliance Communications is likely to complete its deal to sell 74 percent stake in subsidiary Reliance Globalcomm to Bahrain Telecommunication Co (Batelco) for around Rs.6,000 crore by first week of May.

Ø  The RBI is not in favour of auctioning bank licenses as it will deter the cause of financial inclusion, Governor D Subbarao told a parliamentary panel on new banking licenses.

Ø  Cairn India has reported another oil discovery in the prolific Barmer block in Rajasthan.

Ø  Reliance Industries has discovered a new reservoir of natural gas below its existing fields in the KG-D6 basin, raising prospects that output from the region will rise again after a long period of decline.

Ø  ONGC has signed a MoU with KK Birla Group Company, Chambal Fertilisers and Chemicals for setting up a fertiliser unit in Unakoti district. The estimated cost of the project for producing 1.3 million tonne of fertiliser per annum is Rs.5,000 crore. The construction of the plant would be completed by 2016.

Ø  Dr Reddy's Laboratories is setting up a new R&D centre in Princeton, New Jersey.

Ø  Reliance Infrastructure will slash power tariff by 37% to keep supplying to the Goa government as the state threatened to suspend the power purchase from the company citing unviable pricing.

Ø  Jindal Stainless has entered into a strategic agreement with Korean steelmaker Posco, which will help JSL stabilise production of alloy used in cars and home appliances.

Ø  Merck sought HC's order to restrain Glenmark from manufacturing & sale of anti-diabetes drugs Zita & Zita-Met.

Ø  eClerx Services  board approves buy-back of shares up to 10%.

Ø  Ansal Housing to announce Bonus in ratio of 2:1 today.

 

Key events for the day:

Ø  Power, Coal Officials to meet FM on price pooling today.

Ø  United Spirits open offer commence today, closes on 26th April 2013(offer at Rs.1440/share).

Ø  Release of EUR Industrial Production m/m.

Ø  Release of USD Crude Oil Inventories, 10-y Bond Auction & Federal Budget Balance.

www.myshitphotography.com

Derivatives Strategist 10th April 2013

Data Feeler: Nifty future on Tuesday turned out to be an extremely volatile session with trading in a zigzag manner. Nifty after gap up opening witnessed some short covering rally towards 5620 levels but could not able to hold at higher levels in the absence of follow up buying interest and tumbled down with huge selling pressure seen almost across the board. Nifty future intraday made high of 5622 and then after a sustained selling it made low of 5494 levels. Nifty future till the time holding below 5580 levels selling pressure may remain continue whereas sustaining below 5520 levels may put further selling pressur e in the market towards 5450 levels. Looking at the option concentration data for April series, maximum put OI is at 5600 followed by 5500/5400 strike price and maximum call OI is at 5700 followed by 5800 strike prices. Bank Nifty till the holding below 11000 levels selling pressure may be continued towards 11800-11750 levels.

 

Put Call Ratio based on Open Interest of Nifty moved up from 0.8 to 0.83 levels. Historical Volatility of Nifty moved up from 17 to 17.20 levels and Implied Volatility also moved up from 16.37 to 16.82 levels.

 

Nifty future saw increase in OI by 6.7% with a fall in price by 1.05%. Market witnessed buying interest only in Auto space whereas selling pressure was seen almost across the board especially in IT, Tech, Oil & Gas, PSU, FMCG, Reality, CD, Power, Banking and CG sector stocks. Nifty future closed at premium of 6 points as compared to premium of 16 points in previous trading session.

 

The market turnover decreased by 110.45% in terms of number of contracts traded vis-à-vis previous trading day whereas in terms of rupees decreased by 106%.

 

Derivative Calls: Buy on VOLTAS & Sell on ANDHRA BANK.

www.myshitphotography.com