Market Mantra: The Money Daily – December 31, 2015

Market Mantra

 

F&O Expiry: Flat opening, hoping for a happy end

 

As investors wrap up their tasks for the day and year, the market has a choppy F&O expiry to deal with.  Nifty is hovering around the 7900 mark and on the upside major resistance is seen at 7980. A breach above the mentioned hurdle would mean a reversal of the bearish head and shoulder pattern which in turn would trigger fresh buying momentum. At the same time, the Nifty Bank looks fragile and any downfall from here would be led by the banking space.

 

The indices are set to open on a flat note ahead of the expiry of December F&O contracts. Global cues are not encouraging any celebration on the bourses. With most markets shut or closing early, the Sensex and Nifty will swing to the F&O adjustments. China’s Shanghai is flat while Hong Kong’s Hang Seng has risen marginally. Taiwan’s TWSE is in the red. A fall in crude prices dragged energy shares bringing the US indices lower. Dow dropped 0.66% while S&P 500 lost 0.72%. Nasdaq lost 0.82%.

 

 

Trading ideas (Time period: 1-3 days)

 

R COM (BUY, above Rs88, Target Rs96, SL Rs84): On the daily chart, the stock has broken out from an inverted Head & Shoulders formation with the neckline placed at Rs87. We believe consolidation above this level could lead to a strong rally in the counter. In fact, a detailed study of the daily chart suggests that the stock has given a breakout past its 3-month resistance line. In the same period, the stock made several attempts to break past the resistance but failed. However, a close above Rs88 this week above the neckline could suggest sharp upmove in next few weeks. (Duration 8 days)

 

Derivative strategies (Time period: Till expiry)

 

²  Buy FUT IndusindBank Jan above 967 with SL of 948 for target of 990-1010

Lot size: 600

Remarks: Net maximum profit of Rs25,800 and net maximum loss of Rs10,800.

 

Corporate Snippets

 

²  Reliance is in talks with various BPO companies to outsource call centre and other support work for its Jio operations. (ET)

²  Essar Oil has completed the share buyback for its much-delayed delisting, making way for its planned stake sale to Russian energy major OAO Rosneft. (ET)

²  IDFC Bank plans to convert Rs. 350cr of loan into equity in Lanco Infra. (ET)

²  GIC Housing Finance will acquire up to 16% stake in LIC Nomura Mutual Fund Asset Management Company for Rs. 22.7cr. (ET)

²  RCom and Aircel to pare debt to Rs. 20,000cr ahead of merger. (BS)

²  IFCI sells 0.17% stake in NSE for Rs. 29.6cr. (BS)

 

Economy snippets

 

²  Government calls off fourth round of coal block auctions, kept aside for auction to the steel, iron and aluminium industries, as it received low bids. (BS)

²  A Finance Ministry official said that fiscal deficit target for FY17 ‘challenging’ as revenue from disinvestment might be well short of target. (BS)

²  To meet its target of scaling up solar power capacity addition, the Cabinet Committee of Economic Affairs (CCEA) has increased the financial assistance for grid-connected rooftop and small solar power plants programme from Rs. 600cr to Rs. 5,000cr. (BS)

²  The Centre has stitched together an Amended Technology Upgradation Fund Scheme (ATUFS) that will give a boost to ‘Make in India’ in the textiles sector by attracting investments of Rs. 1-lakh crore and creating over 30 lakh jobs. (BL)

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