Weekly Technical December 29, 2014 Index to challenge life-time highs post base formation in coming weeks… Domestic Indices Index Current CNX Nifty S&P BSE Sensex Nifty Future S&P BSE 500 S&P BSE Midcap S&P BSE Small cap 8200.70 27241.78 8273.75 10562.71 10115.85 10894.89 Previous Change% 8225.20 27371.84 8239.85 10560.47 10000.41 10922.21 -0.30 -0.48 0.41 0.02 1.15 -0.25 Global Indices Weekly Performance China 3,157.6 1.6% Germany 9,922.1 1.4% France 4,295.9 1.3% Japan 17,819.0 1.1% Hong Kong 23,349.3 1.0% Brazil 50,144.6 1.0% UK 6,609.9 1.0% US 2,088.8 0.9% Nifty Gainers / Losers for the week (%) -2.9 -2.9 -3.7 LT HINDALCO 3.3 BHEL 4.2 BHARTIARTL 9.0 ULTRACEMCO % Change 11.50 JINDALSTEL -5.50 Technical Picks for the Week 1. Buy Corporation Bank (in cash) in range of | 320.00 – 326.00, Target | 390.00, Stop loss | 298.00 (Call has been initiated on I Click-2-Gain on December 26, 2014 at 11:25) 2. Buy Garware Wall Ropes (in cash) in range of | 180.00 – 186.00, Target | 235.00, Stop loss | 160.00 (Call has been initiated on I Click-2-Gain on December 26, 2014 at 12:38) The week that was • Benchmark indices retreated from two-week highs amid profit bookings in the truncated derivatives expiry week. The BSE Sensex shed 130 points or 0.48% to end at 27241 while the NSE Nifty was down 24 points or 0.30% to 8200. Broader markets outperformed the benchmarks as BSE midcap index gained 1.15% while the small cap index was down just 0.25% • The Nifty began the week on a firm note and went on to make a high of 8364 on Tuesday before succumbing to profit bookings at higher levels. It pared all gains to close marginally in the red. Banking, auto and realty indices posted decent gains while IT, oil & gas and capital goods indices were the major draggers losing over 1% each • The weekly price action formed a High wave, a small bodied bear candle with long upper wick and small lower shadow highlighting indecision after a strong recovery from the previous week’s low of 7961. It maintains a higher high higher low as compared to the previous week suggesting a healthy breather after a rally of over 400 points Week ahead • We expect the index to remain in consolidation mode and undergo a base formation in the coming week amid muted global cues owing to year-end holidays. The overall bias remains positive and the index is expected to resolve higher to challenge the recent life-time high of 8626 in the short-term. Any dips towards the 8150-8120 region should be used as a buying opportunity • The Nifty retraced its December fall (8626 to 7961) by 61.8% at last week’s high of 8364 precisely in line with our expectation and, thereafter, entered a corrective mode. The sharp bounce back of over 400 points from recent low of 7961 led the intraday oscillator into overbought territory resulting in a cool-off in the last three sessions. The two consecutive bullish gaps formed during previous week’s rally signal resumption of bullish momentum. The index is seen holding the previous Friday’s bullish gap area (8159) over the last two sessions despite high volatility suggesting buying support near the gap area • Over the last two sessions, the broader markets as represented by the midcap and small-cap indices have outperformed the benchmark, which is also reflected in the flat to positive market breadth. It highlights the prevailing buoyancy in broader markets while the recently run-up large caps take a breather. Therefore, a basing formation in the coming weeks will help the benchmarks work off the short-term overbought conditions and lay the foundation for an eventual lift-off towards the recent life high of 8626 • The two back to back bullish gaps formed during current pullback are placed around 8159 and 8082 regions. The bullish gaps formed after a sizable correction reflect the change of sentiment and indicate bulls taking charge of the short-term trend. The index is already seen taking support at the second bullish gap area formed in previous Friday’s session near 8159. We believe a re-visit to these bullish gaps is bound to attract fresh buying support and should be used as an entry opportunity to ride the expected up-move towards 8626 in the short-term • Among weekly oscillators, the 14 week RSI has cooled off from its recent overbought readings of 75 odd levels and is now poised at its October 2014 trough of 65 from where it had staged a steady recovery. The oscillator forming a double bottom while price makes a higher bottom highlights the overall positive price structure • For the coming week, the Nifty spot has resistance at 8290, 8375 whereas supports are at 8120, 8050 ICICI Securities Ltd. | Retail Equity Research Exhibit 1: CNX NSE Nifty – Weekly Candlestick Chart CNX Nifty Spot Open High Low Close 8255.00 8364.75 8147.95 8200.70 Nifty took a breather after retracing its December fall by 61.8% in last weeks trade. Index is expected to undergo a basing formation in coming weeks before lifting off towards recent life high of 8626 levels in the short term 8626 61.8% 8180 7723 Index is seen holding above September high of 8180 on weekly closing basis despite high volatility 21 week EMA Research Analyst The weekly RSI is poised at its October 2014 low of 65 while prices have made a higher low indicating strength in the underlying trend Dharmesh Shah [email protected] Nitin Kunte , CMT [email protected] Dipesh Dagha [email protected] Pabitro Mukherjee [email protected] Vinayak Parmar [email protected] Source: Bloomberg, ICICIdirect.com Research ICICI Securities Ltd. | Retail Equity Research Page 2 Bank Nifty – Index on strong footing, heading towards 19300… CNX Bank Nifty Futures Indices CNX Bank Nifty Close 18,746.8 Change 75.5 change% 0.40 CNX Bank Nifty Spot Performance Index Bank Nifty Current 18,557.2 Performance in % 1M 3M 6M 2.9 21.3 21.8 12M 63.8 The week that was • The Bank Nifty made a new life-time high of 18940 in the early part of the week in line with our expectation and, thereafter, turned choppy amid a broad based profit booking trend over the next few sessions in the truncated derivatives expiry week. The Bank Nifty January future settled at 18746, up 75 points or 0.40% over the week • The weekly price action formed a small bull candle, which maintains a positive bias with a higher high and higher low as compared to the previous week. It signals continuance of upward momentum after the previous week’s bullish hammer candle signalled an end of the two-week corrective phase Week ahead CNX Bank Nifty vs. Nifty 19000 8600 8300 8000 7700 7400 7100 6800 6500 17800 16600 15400 14200 26-Jun 14-Jul 31-Jul 19-Aug 5-Sep 23-Sep 14-Oct 3-Nov 21-Nov 9-Dec 26-Dec 13000 Bank Nifty (RHS) NSE (LHS) • The Bank Nifty performed in line with our expectations and went on to make a new life-time high of 18940 ahead of the benchmarks. The index has displayed resilience during the corrective phase in December 2014 and the revival of sentiment in the last couple of weeks has seen the index resume its leadership role. We expect the Bank Nifty to remain in a rising trajectory and head towards 19300 in the short-term. Last week’s low of 18410 will act as an immediate support for the index. Any cool-off towards the same should be used as a buying opportunity • The index displayed strength during the corrective phase in the first half of December 2014 as it retraced its preceding rally by just 38.2% while the benchmark Nifty corrected almost 80% of the respective gains. The rally towards the new life-time high in last week’s trade has now confirmed a significant higher bottom in place at the December 2014 low of 17600 and signalled continuance of the uptrend • We expect the index to continue its uptrend and head towards 19300 in the short-term. The 123.6% retracement of the mid December fall (18929 to 17600) is placed around 17300 making this the immediate target for the index • Last week’s low of 18410 is placed at the 38.2% retracement of current pullback from 17600 to 18940. The placement of the previous two weekly lows near the 18400 region makes this an immediate support area for the index. We expect bulls to hold fort above 18400 in the coming weeks and embark upon their next up-move towards 19300 in the short-term. Any dips towards the 18400 region should be used as a buying opportunity • Among oscillators, the 14 week RSI remains in rising trajectory and has rebounded after taking support at its nine period average during the mid-December correction highlighting the underlying strength in the trend • For the coming week, key support for the Bank Nifty futures is at 18550, 18400 while resistance is at 18950, 19300 ICICI Securities Ltd. | Retail Equity Research Page 3 Exhibit 2: Bank Nifty generic futures - Weekly Candlestick Chart Bank Nifty made a new life high ahead of the benchmarks highlighting strong outperformance and signalling continuation of uptrend after the mid-December corrective decline. We expect the index to remain in rising trajectory and head towards 19300 levels in the short term 18929 CNX Bank Nifty Futures Open High Low Close 18575.00 18940.00 18410.00 18746.80 38.2% @ 17500 15180 21-week EMA Weekly RSI is seen rebounding after taking support at its 9 period average highlighting inherent strength in the trend Source: Bloomberg, ICICIdirect.com Research ICICI Securities Ltd. | Retail Equity Research Page 4 Trend Scanner Positive Trends Candlestick Patterns Scrip Name Close 50 days SMA 20-day SMA 5-day SMA Automotive Axles 754.8 718.7 731.2 725.4 47.80 Scrip Name Indian Hotel 120.0 109.4 118.0 118.3 70.20 Bullish Engulfing 1,361.9 1,314.7 1,364.3 1,336.3 63.10 Automotive Axles 261.9 245.2 248.0 252.2 40.20 Thermax Akzo Nobel India TVS Motors Delivery % 5 days Averge Bullish Reversal Pattern Bearish Reversal Pattern LTP Scrip Name Close 50 days SMA 20-day SMA 5-day SMA Delivery % 5 days Averge Biocon 417.2 453.1 446.3 425.0 37.80 RCOM 80.5 99.2 91.3 80.8 28.50 754.80 208.75 Bearish contunation pattern 301.50 Biocon 417.20 Exide Industries 176.50 RCOM 80.50 Union Bank 240.90 TVS Motors 261.90 Piercing Line Akzo Nobel India ICICI Securities Ltd. | Retail Equity Research Rallis India 1030.75 Bank of India Hathway Note: Positive / Negative Trend stocks are scanned on the basis of mechanical signal. Stocks which are trading above their 50 day simple moving average (SMA) and where 50 day SMA is rising for at least three sessions are considered in positive trend and further filtered for a momentum signal of a cross over between 5 and 20 period moving average. Opposite is true for Negative trending stocks. LTP Bearish Engulfing Bullish contunation pattern Negative Trends Scrip Name 349.90 1361.85 Note: For Candlestick pattern description please refer towards the end of the report. Page 5 Market Activity Commodities Sectoral Indices – Performance (%) INDICES Sensex Nifty Auto Banking Capital goods Current 27241.78 8200.7 18455.13 21253.3 15113.05 1Wk 1M 3M -0.5 -0.3 0.5 0.5 -1.8 -5.2 -4.8 -3.9 0.1 -7.9 1.7 2.1 3.4 17.9 4.4 Cons durables FMCG Healthcare IT Metal Oil & gas Power Realty BSE 500 BSE midcap BSE small cap 9359.5 7686.06 14409.51 10422.16 10562.54 9878.81 2032.64 1533.94 10562.71 10115.85 10894.89 -1.4 -0.3 0.1 -1.3 -0.5 -1.1 0.4 2.4 0.0 1.2 -0.3 -2.5 0.2 -3.9 -7.8 -7.1 -9.6 -6.0 -9.7 -3.3 -1.3 -3.8 -2.1 0.3 5.4 -1.2 -10.4 -9.0 0.1 -7.6 3.2 5.2 0.9 ICICI Securities Ltd. | Retail Equity Research Prev. Close 1195.80 1197.33 -0.13 Copper (tonne) 6361 6452.5 -1.42 Brent Crude (brl) 59.98 61.90 -3.10 Gold (ounce) %Chg Global Currency Spot Close Prev.close % Chg Rupee (|) 63.569 63.300 -0.42 Dollar Index 89.975 89.571 0.45 1.219 1.224 -0.42 Euro British Pound 1.557 1.5631 -0.39 Japanese Yen 120.580 119.420 -0.97 Australian ($) 0.8123 0.8145 -0.27 0.987 0.983 -0.42 Swiss Franc Global Treasury Yields Institutional Activity FII Previous Week -3548 MTD -1872 Oct to Dec quarter 10709 YTD 94146 *Previous week figure are povisional figure *MTD- Month till date *YTD- Year till date in US $ Close DII 1832 4678 12295 21484 Closing Yield (%) Previous Yield (%) India 10 year 7.98 7.96 US 10 Year EURO 10 Year 2.25 2.15 0.59 0.59 1.88 1.85 0.32 0.34 GBP 10 Year JPY 10 Year Page 6 • The share price of Corporation Bank has seen a strong up move from March 2014 to June 2014 during which the stock price almost doubled from 220 to 417 levels. The corrective decline from the higher levels saw the stock retracing its previous rally by 61.8% and formed a basing pattern around the curial retracement level thus providing base for the next up move  Corporation Bank (CORBAN) CMP – | 330.45 Buying range: | 320.00 – 326.00 Target: | 390.00 Stop loss: | 298.00 Exhibit 3: Corporation Bank – Weekly Candlestick Chart A positive follow up to the bullish hammer candlestick pattern signals a reversal of trend and the stock is likely to start a fresh up move and test the 78.2% retracement of the major decline from 417 to 292 which also coincides with the falling trendline joining the previous major highs 495 417 • The important observation in the weekly chart of Corporation Bank is that the formation of bullish Hammer Candlestick pattern at the 61.8% retracement of the previous up move from 220 to 417. A hammer candle formed during a correction near an important support area highlights the receding downward momentum and emergence of strong buying support 78.2% retracement @ 390 61.8% retracement at 290 • A positive follow up to the bullish hammer candlestick pattern during the previous week signals a reversal of trend and start of a fresh up trend thus offering a fresh entry opportunity to ride the next up move with a favourable risk reward equation • The overall technical set-up suggests the stock is likely to embark upon its next up leg and retrace its June 2014 - December 2014 decline (417-283) by at least 78.2%, which projects an upside towards | 390. This also coincides with the trendline joining the highs of 2013 (| 495) and 2014 ( | 417) placed at 490 levels • Among oscillators, the MACD is sustaining above the trigger line and is on the verge of moving above the signal line thus supports the positive momentum in price 220 Bullish Hammer candlestick pattern at the 61.8% retracement at the of the major rally from 220 to 417 signalling reversal of trend after recent corrective price action MACD is sustaining above the trigger line and is on the verge of moving above the signal line thus supports the positive momentum in price Source: Bloomberg, ICICIdirect.com Research (Call Initiated on i Click -2-Gain on December 26, 2014 at 11:25) ICICI Securities Ltd. | Retail Equity Research Page 7 • The share price of Garware Wall Ropes is in a secular uptrend characterised by series of higher high and higher lows on all time frames • During Friday’s trade, the stock has given a breakout above the 13 weeks trading range (| 187-153) signalling continuation of the positive trend • At the October and December 2014 low of | 153, the stock retraced its preceding up move (| 137 - 187) by only 61.8%, which also coincided with the rising 21-week moving average, that has acted as a key support for the stock during secondary corrective declines. The stock is seen breaking out the consolidation range after forming a decent basing pattern around the confluence of the key technical support around | 153 suggesting resumption of the upward momentum • Time wise the stock consumed almost double time (13 weeks) in the consolidation phase while retracing just 61.8% of the preceding seven week rally. Larger time consolidation and limited price correction is the primary indicator of a healthy corrective action and highlights the underlying strength in the trend  Garware Wall Ropes (GARWAL) CMP – | 199.05 Exhibit 4: Garware Wall Ropes – Weekly Bar Chart The stock during Friday’s trade has given a breakout above the 13 weeks trading range signalling continuation of the positive trend. The stock is likely to start a fresh up move and test 235 levels being the 161.8% extensions of the previous up move 187 137 61.8% retracement at 153 The stock formed a basing pattern at the 61.8% retracement of the previous up move (137-187) and rising 21 weeks EMA currently placed at 160 levels Strong volume during price rally and breakout from consolidation range suggests larger participation in the direction of the trend • The volume behaviour supports the positive trend in price as the breakout from the consolidation range has seen strong volume of more then four times the 50 weeks average volume of (1.5 lakh shares per week) signalling larger participation in the direction of trend • Going forward, we expect the share price to test | 235 levels being the 161.8% extensions of the previous up move from | 137 to | 187 as projected from recent higher bottom of | 153 Buying range: | 180.00 – 186.00 Target: | 235.00 Stop loss: |160.00 Bullish crossover of the 14 periods RSI above its nine period’s average thus validates positive trend in price Source: Bloomberg, ICICIdirect.com Research (Call Initiated on i Click -2-Gain on December 26, 2014 at 12:38) ICICI Securities Ltd. | Retail Equity Research Page 8 Dow Jones (18053) The US equity benchmarks extended gains to settle at record life highs in a truncated week. The Nasdaq index climbed to a 14 year high to end the year on a positive note. The DJIA settled at 18053, up 249 points or 1.4% for the week. Global Market Exhibit 5: Dow Jones Weekly Candlestick Chart The DJIA closed at record highs indicating continuation of uptrend. Index is expected to head towards 18344 in the short term while December lows of 17067 remains a support 17991 17350 The price action formed the bull candle, which settled near its high. In the process, prices closed above the rising blue channel that encompassed the entire price action since mid-2013. It maintained positive bias with higher high and higher low Support @ 17067 15855 @ 61.8% The DJIA recovered its seven session decline in flat five sessions, thereby indicating positive price structure and Dow Theory up trend signal with rising peak and trough formation. 15341 @ 61.8 14551 December lows at 17067 remains key short-term support while the index is expected to head towards 18344 being 138.2% retracement of the recent decline. (17991-17067) 52-week EMA RSI inched up however is yet to catch up price and shows early signs of possible negative divergence The 14 period RSI continues to trend up , however flags possibility of negative divergence in momentum with price For the coming week, the DJIA has support at 17950, 17750 while resistance is placed at 18170, 18350. Source: Bloomberg, ICICIdirect.com Research ICICI Securities Ltd. | Retail Equity Research Page 9 German Dax (9922) The Dax inched up in a truncated week to end the year on a positive note Exhibit 6: German Dax - Weekly Candlestick Chart The Dax is expected to challenge its life high in the short term and head towards 10300 levels. The price action for the week resulted in a bull candle with higher high and higher low thereby maintaining positive bias Multiple tops @ 10050 After the strong recovery earlier in the week, the German Dax gained on both sessions in a short week helped by strength in global markets. We expect the index to challenge its life-time high at 10093 and head towards 10300 being 123.6% retracement of recent decline (10093-9219) 9148 52-week EMA Immediate support for the index is now placed at December 2014 lows of 9219 levels 8354 Among oscillators, the weekly RSI has reacted lower below its 9 period average indicating end of positive momentum and correction decline For the coming week, the index has support at 9770, 9600 while resistance is at 10090, and 10170 RSI took support at its 9 period average suggesting continuation of positive momentum Source: Bloomberg, ICICIdirect.com Research ICICI Securities Ltd. | Retail Equity Research Page 10 US$-INR (63.57) The rupee slipped to fresh yearly low as FIIs continue to exit equities in a year-end profit booking mode and US dollar index remain firm at seven year high against major global currencies US$-INR Outlook Exhibit 7: US$-INR - Weekly Candlestick Chart The US dollar closed at highest level in a year amid profit booking in equities and strength in US dollar index against major currencies The price action, a bull candle that remained contained within the prior week’s large bull candle, indicates a slowing down of positive momentum for US Dollar after strong gains early during the month 63.30 The US$-INR pair closed firmly above 63 mark for second week on a closing basis shifting short term trajectory to 62-64 The strength in greenback is on expected lines as the entire up move since May 2014 remains in a well defined rising channel (blue). The US$INR pair hit the upper band of the channel during last week. While the bias for the US dollar remains positive above 62 mark on immediate basis, we expect US$INR pair to consolidate in 62-64 range over next few weeks 52 week EMA Weekly RSI is in rising trajectory highlighting positive momentum for US dollar The weekly RSI is in rising trajectory and is seen turning away from its 9 period average indicating positive bias in the near term For the coming week, US$INR support is placed at 63.10, 62.70 whereas resistances are at 63.90, 64.20 Source: Bloomberg, ICICIdirect.com Research ICICI Securities Ltd. | Retail Equity Research Page 11 Gold International Spot– ($1196.10) International gold prices fell to a three-week low of $1170 at the start of the week amid broad based dollar strength. The bullion prices recovered the losses in the last trading session to close marginally higher at $1196.10 levels Gold Outlook Exhibit 8: Gold International (spot) --- Weekly Bar Chart The gold prices continue to mark time in the broad range of $1140 to $1230 levels over past seven weeks. We expect bullion prices to resume downward journey after the current consolidation and remain on course towards our medium term target of $1000 levels The price action for the week formed a long legged Doji candle signalling indecision at current levels amid a range bound consolidation since last seven weeks The bullion prices are seen marking time between the broad range of $1140 and $1230 in the last seven weeks. This seven week consolidation against one week decline indicates a corrective consolidation and highlights the underlying weakness in the trend. The horizontal trendline placed at $1240 has acted as a stiff resistance in the recent consolidation. We expect bullion prices to resume downward journey after the current consolidation and remain on course towards our medium term target of $1000 levels The price equality of the July-October 2014 decline ($1346 to $1183=$163) measured from the breakdown point of $1180 projects downsides towards $1014 over the medium term which also coincides with breakout area of 2010 placed around $1000 levels Among oscillators, the weekly stochastic is seen struggling below its bear market resistance reading of 70 over the past several weeks highlighting the underlying weakness in the trend $1434 $1392 $1346 52-week EMA $1180 The weekly stochastic is seen struggling below its bear market resistance reading of 70 over the past several weeks Source: Bloomberg, ICICIdirect.com Research ICICI Securities Ltd. | Retail Equity Research Page 12 Brent Crude Futures – ($59.45) Brent crude extended the decline and closed lower for a fifth consecutive week as supply glut and strength in the US$ kept the prices under pressure. The spot Brent crude prices ended 3% lower at $59.45 levels Brent Crude Outlook Exhibit 9: Brent Crude Futures Continuous --- Weekly Bar Chart 128 The weekly price action formed a sizable bear candle which maintained a lower high for eighth consecutive week indicating continuation of the bearish trend 115 Crude oil prices continue to remain under tremendous selling pressure defying the record oversold conditions on the momentum oscillators. The overall price structure remains weak. However, after the spate of rapid price decline, however we expect the crude price to enter a short term consolidation phase 88.49 Crude prices extended decline for fifth consecutive week. On long term price charts, the prices are now approaching a major rising support trendline which is currently placed around $54 levels On long term price charts, the crude prices are now approaching a major rising support trendline which traces its origin way back since 1999. The value of this trendline over the coming months is placed around $54 levels, which is expected to provide some respite to the prices. The placement of 80% retracement of 2009-10 rally near $54 mark makes this a crucial support level for Brent crude In the last 25 odd weeks decline, the crude prices have not given a close above previous weeks close barring just one instance. A sustained close above previous weeks high ($63) would be required to signal waning downward momentum MACD remains in sell mode below its trigger line and is seen diverging from its 9 period average highlighting underlying weakness Source: Bloomberg, ICICIdirect.com Research ICICI Securities Ltd. | Retail Equity Research Page 13 Previous Week’s Performance Date 28-Nov 19-Dec 19-Dec Scrip Tata Chemical JBF Industries Maruti Product Cash Cash Cash Strategy Buy Buy Buy RP 433.00 249.00 3405.00 Target 485.00 299.00 3940.00 SL 405.00 225.00 3148.00 Gain/Loss % -3.00 Comment Open Exit at 241.50 Open Nifty Stocks Pivot points for the Week (December 29 – January 02) Company NIFTY SENSEX ACC CMP 8200.70 27241.78 1393.50 Pivot S1 S2 R1 R2 8237.80 8110.85 8021.00 8327.65 8454.60 27394.75 26938.41 26635.03 27698.13 28154.47 1393.67 1376.03 1358.57 1411.13 1428.77 AMBUJACEM 226.05 227.32 222.83 219.62 230.53 235.02 ASIANPAINT 727.05 733.35 715.70 704.35 744.70 762.35 AXISBANK 494.45 495.65 485.30 476.15 504.80 515.15 BAJAJ-AUTO 2480.70 2490.93 2442.87 2405.03 2528.77 2576.83 BANKBARODA 1068.20 1060.22 1040.53 1012.87 1087.88 1107.57 BHARTIARTL 354.30 351.90 346.40 338.50 359.80 365.30 BHEL 251.55 257.10 244.50 237.45 264.15 276.75 BPCL 645.70 645.98 629.47 613.23 662.22 678.73 CAIRN 241.85 243.48 237.17 232.48 248.17 254.48 CIPLA 622.80 623.93 611.42 600.03 635.32 647.83 COALINDIA 378.35 381.75 370.15 361.95 389.95 401.55 DLF 136.20 134.33 131.77 127.33 138.77 141.33 3168.75 3082.50 3030.90 3220.35 3306.60 DRREDDY GAIL 3134.10 439.88 427.77 417.88 449.77 461.88 GRASIM 3382.25 437.65 3417.38 3319.87 3257.48 3479.77 3577.28 HCLTECH 1564.65 1524.85 1454.80 1344.95 1634.70 1704.75 HDFC 1116.15 1124.75 1083.60 1051.05 1157.30 1198.45 HDFCBANK 948.65 HEROMOTOCO 3096.40 954.57 935.18 921.72 968.03 987.42 3106.60 3051.20 3006.00 3151.80 3207.20 HINDALCO 152.00 153.48 148.12 144.23 157.37 162.73 HINDUNILVR 750.35 755.22 739.63 728.92 765.93 781.52 ICICI Securities Ltd. | Retail Equity Research Page 14 Company CMP ICICIBANK 350.95 Pivot 353.65 S1 S2 R1 R2 345.40 339.85 359.20 367.45 IDFC 154.65 155.20 151.55 148.45 158.30 161.95 INDUSINDBK 784.45 780.78 767.77 751.08 797.47 810.48 1963.07 1904.23 1856.22 2011.08 2069.92 370.93 363.42 358.88 375.47 382.98 INFY ITC 1952.25 367.95 JINDALSTEL 149.30 KOTAKBANK 1253.05 146.22 141.53 133.77 153.98 158.67 1253.35 1234.70 1216.35 1271.70 1290.35 LT 1490.20 1501.55 1459.20 1428.20 1532.55 1574.90 LUPIN 1406.95 1420.53 1378.47 1349.98 1449.02 1491.08 M&M 1255.30 1254.83 1225.87 1196.43 1284.27 1313.23 MARUTI 3333.10 3361.03 3298.07 3263.03 3396.07 3459.03 150.90 NMDC 144.50 144.35 141.15 137.80 147.70 NTPC 139.30 139.77 135.68 132.07 143.38 147.47 ONGC 344.45 347.93 337.57 330.68 354.82 365.18 PNB 222.25 222.75 218.50 214.75 226.50 230.75 POWERGRID 137.10 136.98 134.22 131.33 139.87 142.63 RELIANCE 888.85 891.88 876.97 865.08 903.77 918.68 SBIN 307.65 307.83 303.17 298.68 312.32 316.98 SSLT 207.50 208.58 200.37 193.23 215.72 223.93 SUNPHARMA 811.15 811.17 799.98 788.82 822.33 833.52 TATAMOTORS 485.15 488.52 475.58 466.02 498.08 511.02 82.08 79.57 77.98 83.67 86.18 399.32 389.03 379.82 408.53 418.82 TATAPOWER TATASTEEL 81.15 398.25 TECHM 2566.70 2561.25 2506.55 2446.40 2621.40 2676.10 TCS 2505.00 2502.22 2467.78 2430.57 2539.43 2573.87 ULTRACEMCO 2602.95 2588.33 2512.67 2422.38 2678.62 2754.28 WIPRO 547.40 548.15 539.35 531.30 556.20 565.00 ZEEL 376.90 378.22 372.73 368.57 382.38 387.87 ICICI Securities Ltd. | Retail Equity Research Page 15 Forthcoming Economic Events Calendar Date US Event 29-Dec Dallas Fed Manf. Activity 30-Dec S&P/CS Composite-20 YoY 30-Dec Consumer Confidence Index 31-Dec Initial jobless claims 31-Dec Bloomberg Consumer Comfort 31-Dec Pending Home Sales MoM 2-Jan Markit US Manufacturing PMI 2-Jan Construction Spending MoM 2-Jan ISM Manufacturing 2-Jan ISM Prices Paid India 31-Dec Bloomberg Dec. India Economic Survey 31-Dec Fiscal Deficit INR Crore China 31-Dec HSBC China Manufacturing PMI 1-Jan Manufacturing PMI 3-Jan Non-manufacturing PMI UK 30-Dec Nationwide House PX MoM 2-Jan Net Consumer Credit 2-Jan Mortgage Approvals 2-Jan M4 Money Supply MoM/YoY 2-Jan Markit UK PMI Manufacturing SA ICICI Securities Ltd. | Retail Equity Research Page 16 NOTES: • Please execute the recommendation within the prescribed range provided in the report • Once the recommendation is executed, it is advisable to keep strict stop loss as provided in the report on closing basis. • We adapt a trading strategy of booking 50% profit when the position is in profit by 3-5% and trail stoploss on remaining position to the entry point • In recommendations where it is advised to buy on declines, if the target price is hit before activation of the call in prescribed range then the recommendation is considered not initiated. • The recommendations are valid only for the week and are to be squared off by the end of the week. In case we intend to carry forward the position, it will be communicated through separate mail. Trading Portfolio allocation • It is recommended to spread out the trading corpus in a proportionate manner between the various technical research products • Please avoid allocating the entire trading corpus to a single stock or a single product segment • Within each product segment it is advisable to allocate equal amount to each recommendation • For example: The ‘Daily Calls’ product carries 3 to 4 intraday recommendations. It is advisable to allocate equal amount to each recommendation ICICI Securities Ltd. | Retail Equity Research Page 17 Recommended Product wise Trading Portfolio allocation Products Allocations Product wise Max allocation allocation in 1 stock Return Objective Number of Calls Frontline Stocks Mid-cap stocks Duration Daily Calls 8% 2-3% 3-4 Stocks 0.50-1% 2-3% Intraday Short term Delivery 6% 3-5% 7-10 p.m 4-5% 7-10% Opportunity based Weekly Calls 8% 3-5% 1-2 Stocks 5-7% 7-10% 1 Week Weekly Technical 8% 3-5% 1-2 Stocks 5-7% 7-10% 1 Week Monthly Call 15% 5% 2-3 Stocks 7-10% 10-15% 1 Month Monthly Technical 15% 2-4% 5-8 Stocks 7-10% 10-15% 1 Month Techno Funda 15% 5-10% 1-2 Stocks 10% and above 15% and above 6 Months Technical Breakout 15% 5-10% 1-2 Stocks 10% and above 15% and above 3-6 Months Cash in Hand 10% - - - - - 100% ICICI Securities Ltd. | Retail Equity Research Page 18 Candlesticks Glossary: Candlestick patterns describe the market sentiment for the specified period. Some of the formations suggest reversal of sentiment (trend) and, therefore, are important for a chart reader. By themselves, the patterns do not carry any price target but only an indication of change in market behaviour. More importance needs to be given to the placement of the pattern within larger trend Morning Star: Potential bottom reversal pattern made of three candle lines. The first sizeable black candle reflects a market in which the bears are in complete charge. The next candle line--the small real body--shows a slight diminution of the bearish force. The white candle that makes up the last part of the morning star visually displays the bulls are gaining the upper hand. Lowest low amongst three candles becomes technical support Bullish Engulfing Line: A potential bottom reversal pattern. This pattern typically appears at the culmination of a decline or downtrend. The market falls, and a black candle forms (ideally a small black candle). Next, a white real body wraps around the prior session’s black body. Low of the pattern becomes short term support for prices Piercing Line: Potential bottom reversal pattern. A black body forms in the downtrend. The market continues moving south on the next session’s open but that session culminates in a white real body that closes (e.g. pierces) than half way or more into the prior black body. Lowest low between two candles is referred to as technical support for prices Hammer: A candlestick line which, during a downtrend, has a very long lower shadow and small real body (black or white) at the top end of the session’s range. There should be no, or a very small, upper shadow. Pattern suggests buying support during declines and needs confirmation in terms of sustainability of prices above head of the Hammer in following session Evening Star: Potential Top reversal pattern made of three candle lines. Comparable with a traffic signal. First white candle reflects a market in bullish trend. The next candle line--the small real body—warns waning momentum. The black candle that completes the evening star visually exhibits that prior up trend has stopped or reversed Bearish Engulfing Line: Potential top reversal signal. This two candlestick pattern emerges during a rally. A black candle real body wraps around a white real body (classically a small white candle) Highest high between two candles becomes resistance level for prices for future reference Dark Cloud cover: A dark cloud cover forms a top reversal pattern. The first session should be a strong, white real body. The second session’s price opens over the prior session’s high (or above the prior session’s close). By the end of the second session, it closes near the low of the session and should fall well into the prior session’s white body. Pattern suggests that market has a poor chance of rising immediately Shooting Star: A single candlestick line during a rally in which there is a small real body (white or black) at the bottom end of the session's range and a very long upper shadow. The candle line should also have little or no lower shadow. Pattern suggest the trouble for prices overhead ICICI Securities Ltd. | Retail Equity Research Page 19 Pankaj Pandey Head – Research [email protected] ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai – 400 093 [email protected] ICICI Securities Ltd. | Retail Equity Research Page 20 Disclaimer ANALYST CERTIFICATION We /I, Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Terms & conditions and other disclosures: ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which are available on www.icicibank.com. ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. 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Accordingly, neither ICICI Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. It is confirmed that Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report. Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. 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