Morning updates: 30 Nov

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GLOBAL UPDATE: DOW (+103, 23941) NASDAQ (-8, 6824) SGX NIFTY (-49, 10311) HANG SENG (-283, 29340)

Good Morning Early Readers & Welcome to Thursday’s trading session!

At the time of writing, SGX Nifty is signaling a shudder for our stock markets. Investors/traders will have to brace for a volatile session with some significant pain in today’s trading action.

Our optimistic view is being dented as geopolitical tensions are seen heating up again. North Korea's has successfully launched of an intercontinental ballistic missile. Kim Jong Un's latest ballistic missile test flew 10 times higher than the International Space Station and twice as high as any satellite in low-earth orbit, according to South Korea's military.

Interestingly, the North Koreans have now test-fired missiles 18 times since President Donald Trump took office in January 2017. Tuesday's launch was the first in more than two months.

During an emergency meeting in New York on Wednesday, the US Ambassador to the UN Nikki Haley said the rogue regime's actions have brought the world "closer to war." "And if war comes, make no mistake, the North Korean regime will be utterly destroyed," she added.

Dalal Street is also being haunted by other negative catalysts like continuation of FIIs selling, widening trade deficit, declining exports, rising consumer price inflation and wholesale inflation. Please note; the continuous rise in inflation since last four months is likely to dash hope of rate cut and will be a cause of concern ahead of the MPC meeting on 4th December.

Meanwhile, overnight at Wall Street, the Dow Jones Industrial Average closed at a new high, but the Nasdaq Composite logged its worst day in three months as a selloff in megacap technology shares, such as Facebook Inc., Apple Inc., and Amazon.com Inc., weighed on the tech-heavy index.

Now, before we get into detail, let’s check out news and analysis which we need to know before Dalal Street opens for trade this Thursday morning.

1. Share buybacks of IT companies will continue to command attention. While Wipro opened Rs 11,000 crore share buyback scheme on November 29  for Rs 320 a unit, at 8.6 per cent premium over current price, India’s second largest IT company Infosys Rs 13,000 crore buyback offer will open on November 30 and end on December 14.

2. India’s gross domestic product (GDP) data for September quarter will be released on Thursday, November 30, post market hours. India's GDP growth rate slowed to 5.7% in Q1 June 2017, on the back of destocking ahead of Goods and Services Tax (GST) implementation.

3. Auto companies will be on investors' radar as they will start releasing their November sales data from December 1.

4. All eyes on Opec meet: The members of the Organization of the Petroleum Exporting Countries (Opec), Russia and nine other producers will assemble in Vienna on November 30 to decide whether to extend their oil supply curbs.

5. The Indian Rupee has appreciated by a whopping 39 paise in the last three days. The rupee is at a fresh two-month high of 64.31 against the US dollar ahead of the GDP data to be released today.

6. The foreign institutional investors (FIIs) sold shares worth Rs 859.27 crore on Wednesday while domestic institutional investors bought shares worth Rs 771.07 crore.

7. Focus will be on RBI monetary policy (December 5-6).

8. Gujarat Assembly Elections (1st phase on December 9 and 2nd on December 14 and results on December 18).

9. Federal Reserve meet (December 12-13).

Outlook for Thursday: A volatile session likely.

The Dow’s bull run at Wall Street is amazing and have been boosted by factors like:

1. Growing U.S. economy.
2. Rising corporate profits
3. Bets that the Trump administration will deliver tax cuts and other business-friendly policies.

Our chart of the day recommends perma-bulls camp to notch momentum stocks on any early declines on buy side with interweek perspective. The stocks which we like; Pidilite Industries, CESC and Tech Mahindra.

What Technical Tells Us on Nifty:  The benchmark Nifty ended slightly lower after a range bound Wednesday’s session. Nifty was seen consolidating, down 0.09% to settle at 10,361.25. The hallmark of yesterday’s trade was that Nifty held above the key supports at 10325 despite volatile range bound session. The market breadth, indicating the overall health of the market turned negative in late trade

Technically, these are classic back and filling moments. The bulls’ camp from here on will be fighting to reclaim psychological 10,500 hurdles in near term. Also, please note the bias remains positive as long as Nifty bulls are able to defend 10,100 mark.

The sequence of higher high/low is intact on weekly charts; hence any corrective declines provide buying opportunities. We suspect; downside for the day to be limited at 10189 on Nifty. Medium term support now placed at 10101.

Now, the two key levels to watch in near term are:

• Nifty Hurdles at 10421 and 10501.
• Nifty’s intraday support at 10287 and then at 10245.

All About Derivatives: Nifty 10,500 will be crucial pivot level to watch as maximum Call open interest (OI) of 28.71 contracts stands at that Strike Price followed by 10,600, which now holds 18.73 lakh contracts in open interest, and then 10,400. Call writing seen at strike price of 10,600. Call unwinding was seen at strike price of 10,500.

Nifty’ must watch support levels would be 10,000 mark as maximum Put OI of 60.75 lakh contracts were seen at strike price 10,000. Put unwinding was seen at strike prices 10,100.

Bias continues to be positive despite last two days range bound movement. The key support to watch on Nifty futures is at 10,250. If Nifty holds the mentioned 10,250 zone, then expect major rebound on Nifty in near term, targeting 105011 and then at the much awaited 10,750 mark.

Preferred trade on Nifty: Nifty (103610): Buy between 10287-10301 zone, targeting 10401 and then at 10475-10501 zone. Stop 10229. Rationale: Rebound Play.

Preferred trade on Bank Nifty: Bank Nifty (25795): Buy at CMP, targeting 26001 zone and then at 26251-26501 zone. Stop 25101. Rationale: Breakout Play.

BULLISH STOCKS: BHEL, PIDILITE, M&M, RBL BANK, CHOLAMANDALAM, CESC, KAJARIA CERAMIC.

BEARISH STOCKS:  BAJ FINANCE, Tata Motors, ITC, VEDANTA, ADANI ENTERPRISES.

STOCKS IN BAN  IN F&O SEGMENT FOR TODAY: DHFL, GMR INFRA, INFIBEAM, JP ASSOCIATES, JSW ENERGY,ORIENTAL BANK, RCOM, TV18BRDCST.
New In Ban: RCOM
Out of Ban: FORTIS, HDIL, JET AIRWAYS, JAIN IRRIGATION, SYNDI BANK, WOCK PHARMA.