THE BIGGEST LOSER 7334 1533412932 Fact Sheet August 2015
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FACT SHEET- AUGUST 2015 Monthly Overview www.idbipaisabuilder.in Monsoon Session IDBI Capital Market Services Ltd | Retail Research www.idbipaisabuilder.in Contents At a Glance 3 CNX Nifty Highlights 4 CNX Nifty Outlook 5 Sector Watch 6 News of August 2015 8 Pick Of The Month 9 IDBI Classroom 10 IDBI Capital Market Services Ltd | Retail Research www.idbipaisabuilder.in At a Glance Domestic Indices Indices 31-Jul-15 CNX Nifty Index CNX Midcap CNX Smallcap CNX 500 Nifty Futures S&P BSE Sensex S&P BSE MID CAP S&P BSE SMALL CAP Global Indices 31-Aug-15 8533 13729 5723 7106 8607 28115 11273 11831 7971 13059 5167 6669 8042 26283 10734 10971 % Change -6.58% -4.88% -9.71% -6.15% -6.56% -6.51% -4.78% -7.27% Indices 31-Jul-15 Nasdaq Dow Jones FTSE 100 DAX Nikkei 225 Hang Seng KOSPI 4589 17690 6696 11309 20585 24636 244 Sectoral Indices Indices 31-Jul-15 31-Aug-15 4275 16528 6248 10259 18890 21671 233 % Change CNX Auto CNX Bank Nifty CNX Commodities CNX Consumption CNX Energy CNX Finance CNX FMCG CNX Infrastructure CNX IT 8545 18730 2616 3682 8712 7683 20920 3298 11594 7949 17147 2340 3424 7646 6998 20112 2953 11606 -6.98% -8.45% -10.58% -6.99% -12.24% -8.91% -3.87% -10.46% 0.10% CNX Media CNX Metal CNX MNC CNX Pharma CNX PSU BANK CNX Realty CNX Service 2452 2129 10352 12353 3412 177 11007 2328 1833 9676 13213 3200 161 10300 -5.05% -13.88% -6.53% 6.96% -6.20% -8.61% -6.42% Particulars 31-Jul-15 Gold/10G Silver/KG Crude/Barrel 31-Aug-15 24592 33611 3106 26556 34467 2812 Particulars 31-Jul-15 Dollar/ Rupee Euro / Rupee Pound / Rupee 31-Aug-15 63.98 70.48 99.95 66.40 74.44 101.87 15000 Net Purch/Sales (INR crores) 10000 5000 0 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 -10000 -15000 -20000 -25000 IDBI Capital Market Services Ltd | Retail Research 7.99% 2.55% -9.47% % Change 3.79% 5.62% 1.93% Debt Watch Particulars 31-Jul-15 10 yr G-sec yield 5 yr G-sec yield 10yr AAA yield 5yr AAA yield 7.81 7.94 8.44 8.45 31-Aug-15 7.79 7.91 8.35 8.36 Advances/Declines 20000 DII % Change Currency Institutional Activity -5000 -6.85% -6.57% -6.70% -9.28% -8.23% -12.04% -4.71% Commodities 31-Aug-15 FII % Change Month Aug-15 Jul-15 Jun-15 May-15 Mar-15 Feb-15 Jan-15 Dec-14 Nov-14 Oct-14 Sep-14 Advances 686 803 690 732 627 683 748 706 736 770 778 Declines 833 703 796 759 881 813 786 822 808 759 782 Advance/ Decline Ratio 0.82 1.14 0.87 0.97 0.71 0.84 0.95 0.86 0.91 1.01 1.00 www.idbipaisabuilder.in CNX Nifty Highlights CNX Nifty opened the month on a Monthly Chart positive note but could not hold the tempo. Nifty ended the month in the negative by around 6.5%. In August, on monthly chart, Nifty had formed strong bear candle and it near to its 38% retracement level, if nifty breaches this level then further downside can be expected. The intermediate support is placed around 7600 levels which is @ 38% retracement level of earlier rise from 5467 to 8955. RSI is also in oversold zone. This suggests that the current decline could reach the retracement support during Weekly Chart this month. On the weekly charts, while closing the month it has formed hammer type candle but after that in immediate week it had formed long bear candle. Nifty had breached the strong support level of 8000. NIFTY has made lower low on weekly chart; this validates lower top and lower bottom formation on bigger picture which is a medium term bearish sign. In addition to this, structurally index has formed the “Head & Shoulder” pattern, with support of the volumes. It had breached neckline of this pattern. Weekly Daily Chart momentum oscillator like 14 day RSI has slipped below the key lower levels of 40. On the daily chart, Nifty has breached the neckline of head & shoulder pattern with gaps during the month of August. IDBI Capital Market Services Ltd | Retail Research www.idbipaisabuilder.in CNX Nifty Outlook The bearish market sentiments prevailed on account of poor set of June 2015 quarter earnings, no rate cut announced by the RBI in its bi-monthly monetary policy review and devaluation of Yuan affecting other emerging markets currencies. Apart from this, fears of a global economic slowdown and indecision on goods and services tax bill in the Parliament also weighed on the market. In near term the factors such as the rate decision by the US Fed, crude prices, developments on Chinese economic crisis and on the domestic front, outcome of RBI bi-monthly monetary policy review may provide further clues to the market. Technically , CNX Nifty has been declining in the negative sequence of lower tops and bottoms. Lower top lower bottom reflects a downtrend in index. The big falls over the last ten days dented the market confidence. Few opening downside gaps have been formed in the last couple of weeks and all the gaps are unfilled and unchallenged. A small pullback rally cannot be ruled out but overall trend is expected to remain negative and need to maintain cautious approach before considering long positions. Stock specific view can be built. Currently it is better to avoid catching a low, as the line of least resistance is on downside and medium term trend is negative. Only move above 7960 will provide first positive indication and prices can then move upside. Nifty Outlook: Montly Closing 7971 Short-term Negative Monthly High: 8589 Medium-term Neutral to Negative Long-term Positive Sector Bias: Support Level: Resistance Level: Monthly Low : 7792 Negative 7510 7790 7240 7960 Moving Average Days 20days 50 Days 200 Days IDBI Capital Market Services Ltd | Retail Research SMA 8430 8330 8037 www.idbipaisabuilder.in Sector Watch CNX BankNifty Montly Closing Monthly High: 19029 Sector Bias: Support Level: Resistance Level: 17147 Monthly Low : 16811 Neutral 15800 15650 16500 16740 Sector Outperformers BankBaroda HDFCBank Sector Underperformers ICICIBank YesBank CNX Banknifty represents about 15.55% of the free float market capitalization and 89.90% of free float market capitalization of stocks forming a part of bank sector. The CNX Bank index declined by around 8.5%. The PSU bank stocks remained most volatile on the banking sector front. This was mainly due to a weak June 2015 quarter earnings & concerns over NPAs. Technically BankNifty is around 38% retracement levels. If it fails to hold at around these levels then further negativity can be expected. The RBI rate action may give further cues on the sector. CNX AUTO Montly Closing Monthly High: 8803 Sector Bias: Support Level: Resistance Level: 7949 Monthly Low: 7773 Neutral 7380 7270 7680 7795 Sector Outperformers Maruti EICHERMot Sector Underperformers Tata Motors AmtekAuto CNX auto index which represents about 7.63% of Free float market capitalization of stock listed on NSE and 95.42% of Free float market capitalization of stock forming a part of automobile Sector universe. CNX AUTO index closed the week on negative note losing around 7%. On monthly chart it is depicting a falling channel. During August it formed a long bear candle. September sales data is quite encouraging but considering overall weakness in the market the sector is likely to take further hit. TataMotors was the biggest contributor for the fall of Auto Index. IDBI Capital Market Services Ltd | Retail Research www.idbipaisabuilder.in Sector Watch CNX Energy Montly Closing Monthly High: 8698 Sector Bias: Support Level: Resistance Level: 7646 Monthly Low : 7334 Neutral 7660 7750 6990 6780 Sector Outperformers BPCL IOC Sector Underperformers Cairn ONGC CNX Energy represents about 10.46% of the free float market capitalization and 82.99% of free float market capitalization of stocks forming a part of energy sector. The CNX Energy index fell by around 12% on account of a fall in crude oil prices. The fall in crude prices in turn affect the margins of the upstream companies. Technically it is near to its horizontal support band. RSI is in negative zone at around 30 levels. CNX Metal Montly Closing Monthly High: 2168 Sector Bias: Support Level: Resistance Level: 1833 Monthly Low: 1694 Negative to Neutral 1880 1990 1480 1290 Sector Outperformers CoalIndia JSW Steel Sector Underperformers Vedanta Tatasteel CNX Metal index which represents about 4.62% of Free float market capitalization of stock listed on NSE and 90.37% of Free float market capitalization of stock forming a part of metal Sector universe. The CNX Metal index was biggest loser among the key sectoral indices during August. It declined by around 13%. The key concern factor behind the fall was the fears of a further dip in commodity prices on account of slowdown in the Chinese economy. Technically since July 2014 the sector is in negative momentum. It is trending in falling channel. IDBI Capital Market Services Ltd | Retail Research www.idbipaisabuilder.in News Highlights August 2015 • The Agriculture Ministry has proposed an increase in import duty on crude and refined edible oils. Existing import duty on crude edible oil was 7.5%, and for refined oil, it was 15%. • GlaxoSmithKline Pharmaceuticals Ltd (GSK) has decided to invest ₹1,000 crore to set up facility to manufacture tablets and capsules. The global pharmaceutical company’s facility at Vemgal, Kolar, is the first new manufacturing facility of the company after a gap of 15 years anywhere in the world. • Berger Paints India Ltd has decided to set up two manufacturing units in Assam to serve the North-East market at a cost of around ₹60 crore. • The government has approved proposals for divesting 11.36% stake in NTPC and 5% stake in NHPC Ltd, a move that it likely to fetch Rs 8,247 crore to the exchequer. • Adani Power got shareholders' approval to raise up to Rs 10,000 crore through issuance of shares, bonds or other securities, including for investments in various businesses. • Ajanta Pharma has received final approval for its three ANDAs (Abbreviated New Drug Application) by US FDA for Montelukast tablets, 10 mg, Montelukast sodium chewable tablets, 4mg and 5mg and Montelukast oral granules. • Home grown auto major Mahindra and Mahindra planned to invest Rs 700 crore in commercial vehicle (CV) vertical as it aims to become a full range player in the segment in the next two years. Mahindra Truck and Bus Division (MTBD), a part of USD 16.9 billion Mahindra Group, planned to be a full range commercial vehicle player with focus on developing vehicles in the 9-16 tonnes range. • State-run Corporation Bank’s board has approved capital infusion of Rs 857 crore by the government. • Godrej Agrovet has approved execution of a share purchase agreement with promoters of Astec Lifesciences whereby the promoters of the company have agreed to sell 45.29 percent of the current paid-up equity shares of the Company at a price of Rs 190 per share. • Sun Pharma announced successful completion of Opiates business acquisition in Australia. This acquisition fortifies Sun Pharma’s global position with two Opiates manufacturing facilities in Port Fairy & Latrobe (both in Australia) complementing its current API manufacturing footprint globally. • Reliance Communications announced partnership with Jasper, a global Internet of Things (IoT) services player to enable enterprises throughout India to launch, manage and monetize Next-Generation IoT businesses. Reliance is Jasper’s sole telecom partner in India. • US regulator FDA has hiked its fees for new generic drug applications by up to 30% , a move that may hit hard Indian drugmakers, which account for a major chunk of generic medicines sold in that country. • Adani's plan to build one of the world's largest coal mines in Australia suffered a setback after a Australian court revoked the govt's environmental approval for the $16.5 bn project. • The People's Bank of China cut its key lending rate by 0.25 percentage points to 4.6% in an effort to calm stock markets after two days of turmoil. It is the fifth interest rate cut since November. IDBI Capital Market Services Ltd | Retail Research www.idbipaisabuilder.in Pick Of The Month: Dabur India Ltd. Target Price: ` 310 BUY Market Cap: Current Price: Target Price: Upside potential: ` 48663 Crores ` 275 ` 310 12% (4-6 Weeks) Stock P/E: Book Value: Dividend yield: 52 Week High/Low: 43.6 ` 20.58 0.72% ` 316.50 / ` 196.40 Company Profile: Dabur India Limited is an India-based consumer products manufacturing company. The Company's product portfolio includes over 381 products spread across 21 categories and over 1,000 stock keeping units (SKUs). The Company's strategic business units include Consumer Care Business and International Business. Its Consumer Care Business unit includes healthcare, which consists of health supplements, digestives, over-thecounter (OTC) and ayurvedic ethical products; home and personal care (HPC), which consists of hair care, oral care, skin care and home care, and foods, which consists of fruit-based beverages and culinary pastes business. Its International Business unit offers a range of hair, skin and oral care products in the Middle East, Africa, South Asia, Europe and Americas. The Company markets its products under the brands, including Dabur Chyawanprash, Dabur Honey, Dabur Baby, Dabur Glucose, Vatika, Hajmola, Dabur Lal Tail and Real, among others. Monthly chart: On monthly chart the stock is depicting positive momentum. It has always moved above its long-term trend Line in positive direction. It has consistently moved above yearly moving average line. Any small retracement can be considered as buying opportunity for this positive stock. Weekly chart: On weekly chart the price is at support level of Andrews' Pitchfork. Andrews' Pitchfork is a trend channel tool. As with normal trend lines and channels, the outside trend lines mark potential support and resistance areas. A trend remains in place as long as the Pitchfork channel holds. Reversals occur when prices break out of a Pitchfork channel. Considering different factors mentioned above, we can create long position in the zone of 265-275 levels with pyramid approach. Stop loss need to be maintained at 250 on weekly closing basis with target of 310-325 levels. At current volatile market situation the investors might have to hold for more time for better return. IDBI Capital Market Services Ltd | Retail Research www.idbipaisabuilder.in IDBI Classroom: Head and Shoulders(Top Reversal) A Head and Shoulders reversal pattern forms after an uptrend, and its completion marks a trend reversal. The pattern contains three successive peaks with the middle peak (head) being the highest and the two outside peaks (shoulders) being low and roughly equal. The reaction lows of each peak can be connected to form support, or a neckline. Pattern presumption: 1. Prior Trend: It is important to establish the existence of a prior uptrend for this to be a reversal pattern. Without a prior uptrend to reverse, there cannot be a Head and Shoulders reversal pattern. 2. Left Shoulder: While in an uptrend, the left shoulder forms a peak that marks the high point of the current trend. After making this peak, a decline ensues to complete the formation of the shoulder (1). The low of the decline usually remains above the trend line, keeping the uptrend intact. 3. Head: From the low of the left shoulder, an advance begins that exceeds the previous high and marks the top of the head. After peaking, the low of the subsequent decline marks the second point of the neckline (2). The low of the decline usually breaks the uptrend line, putting the uptrend in jeopardy. 4. Right Shoulder: The advance from the low of the head forms the right shoulder. This peak is lower than the head (a lower high) and usually in line with the high of the left shoulder. While symmetry is preferred, sometimes the shoulders can be out of whack. The decline from the peak of the right shoulder should break the neckline. 5. Neckline: The neckline forms by connecting low points 1 and 2. Low point 1 marks the end of the left shoulder and the beginning of the head. Low point 2 marks the end of the head and the beginning of the right shoulder. Depending on the relationship between the two low points, the neckline can slope up, slope down or be horizontal. The slope of the neckline will affect the pattern's degree of bearishness—a downward slope is more bearish than an upward slope. Sometimes more than one low point can be used to form the neckline. 6. Volume: Ideally, but not always, volume during the advance of the left shoulder should be higher than during the advance of the head. This decrease in volume and the new high of the head, together, serve as a warning sign. The next warning sign comes when volume increases on the decline from the peak of the head. Final confirmation comes when volume further increases during the decline of the right shoulder. 7. Neckline Break: The head and shoulders pattern is not complete and the uptrend is not reversed until neckline support is broken. Ideally, this should also occur in a convincing manner, with an expansion in volume. 8. Support Turned Resistance: Once support is broken, it is common for this same support level to turn into resistance. Sometimes, but certainly not always, the price will return to the support break, and offer a second chance to sell. 9. Price Target: After breaking neckline support, the projected price decline is found by measuring the distance from the neckline to the top of the head. This distance is then subtracted from the neckline to reach a price target. Any price target should serve as a rough guide, and other factors should be considered as well. These factors might include previous support levels, Fibonacci retracements, or long-term moving averages. 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