Nifty outlook and top trading ideas by Devang Shah for today

NIFTY
CLOSE- 11557.10 (24.08.2018)
The market closed the 5th consecutive week in positive territory. It has achieved my short term targets levels near recent high as expected. It made a high of 11,620.70 levels on Nifty & 38,487.63 levels on Sensex during the week. It looks like extension case further as per short-term wave count chart. Any kind of short-term consolidation or correction is stock specific buying opportunity till short-term reverses.

Stock Picks:

DHFL - BUY
CLOSE – Rs 655.50
TARGET – Rs 700-740
DHFL closed the weekly in negative territory. Its consolidated in a narrow range during the week. Its daily momentum indicators are in BUY. It is trading above 20DMA. One can BUY with a stop loss of Rs-626 for the target of Rs 700-740 levels in short-term.

POWER GRID - BUY
CLOSE – Rs 190.20
TARGET – Rs 198-205
POWER GRID closed the weekly in positive territory. It looks like the end of short-term correction. It managed to hold 20 DMA. Risk Reward is favourable to BUY at current levels. Its daily momentum indicators are in BUY. One can BUY with a stop loss of Rs-185 for the target of Rs-198-205 levels in short-term.

L&T - BUY
CLOSE – Rs 1342.60
TARGET – Rs 1380-1400
L&T closed the weekly in positive territory. It looks like the end of short-term correction. Its daily momentum indicators are in BUY. It closed above 20DMA. One can BUY with a stop loss of Rs-1280 for the target of Rs-1380-1400 levels in short-term.

L&T gains on order win of Rs 1,600 crore from HPCL

Larsen & Toubro (L&T) was up 1.4% at Rs 1,207 on the BSE in early morning trade after the construction & engineering giant said that its arm L&T Hydrocarbon Engineering  (LTHE) has won order worth of over Rs1,600 crore from Hindustan Petroleum Corporation Limited (HPCL).

The project is part of HPCL Visakh Refinery Modernisation Project (VRMP) and involves engineering, procurement, construction and commissioning of 3.053 MMTP full conversion hydrocracker project.

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L&T Finance falls on buzz that Citigroup is selling stake

L&T Finance Holdings Ltd fell as much as 3.9 per cent in early trade to its lowest level in a week on the buzz that Citigroup was planning to sell 39.2 million shares, or 2.15 per cent stake in the company, worth Rs 737 crore, according to an IFR report.

Citigroup, according to the report, is selling shares in the range of Rs 180.50-188.05 apiece, a discount of as much as 4 per cent to the stock's Monday close.

More than 33 million L&T Finance shares would be changing hands on the NSE in a single block deal, besides several other block deals in stock.

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Stock recos from Prabhudas Lilladher: Buy L&T, Bajaj Auto & Bank of India

STOCK MARKET - Nifty outlook and few trading ideas by Vaishali Parekh, Research Analyst - Technical Research at Prabhudas Lilladher
NIFTY VIEW:
Nifty has shown resistance at around 10500 levels and has witnessed some volatility with profit booking in some counters. As of now, Nifty has taken support at 10250 levels, which is also where the significant moving average of 34WMA lies. However, the support for the week lies at 10120 while resistance lies at 10460. As said earlier, a decisive breach of 10200 can bring about fresh selling and we may see more downside.

BUY BANK OF INDIA    
CMP: Rs 196.35      
TARGET: Rs 250    
STOP LOSS: Rs 185
The stock has been consolidating after the huge spurt it gave 2 weeks back and now it has been gathering potential and strength to rise further and we anticipate a level upto 240 -250 can be achieved in the coming days. The volume has been significant and on the improving end and with RSI and MACD on the rise, a positive bias has been maintained in the stock. We recommend a buy in this stock for an upside target of 250 keeping a stop loss of 185.

BUY LARSEN & TOUBRO
CMP: Rs 1,264.95    
TARGET: Rs 1,380    
STOP LOSS: Rs 1,220
The stock was in a consolidation phase for some time at around 1210- 1230 range and now it has produced a positive bullish candle formation in the daily chart regaining strength and it signifies potential to rise further still upward in the coming days. The RSI has shown a steep rise with a trend reversal and also support our view of a positive bias. With volume activity on the rise in recent times, we recommend this stock for an upside target of 1380 keeping a stop loss of 1220.

TCS, Polaris, LTI, MphasiS, KPIT Techno, Nucleus Software hit 52-week highs

Shares of information technology (IT) companies were trading higher for the second straight day on the bourses with Nifty IT index and S&P BSE IT index hit their respective fresh 52-week highs in otherwise range-bound market.

At 10:30 AM; the S&P BSE IT Index (up 0.74% at 10,769) and Nifty IT index (up 0.90% at 11,273) up nearly 1% as compared to a marginal 0.1% rise in the S&P BSE Sensex and Nifty 50 index.

Tata Consultancy Services (TCS), Polaris Consulting Services, MphasiS, LTI (L&T Infotech), KPIT Technologies and Nucleus Software Exports hit 52-week highs on the BSE.

Among the individual stocks, Polaris Consulting Services rallied 8% to Rs 329 in intra-day trade, after the company reported 75% year on year (y-o-y) jump in its consolidated net profit at Rs 72.3 crore in September quarter (Q2FY18).

Revenues stood at Rs 672 crore, registering 31.8% growth as compared to Q2FY17. In dollar terms, revenues stood at $104.4 million, a growth of 38.0% y-o-y and 21.4% quarter on quarter (q-o-q). On a constant currency basis, revenue increased by 38.0% y-o-y and 21.4% q-o-q.

EBITDA (earnings before interest, taxes, depreciation and amortization) margins during the quarter under review improved at 16.2% compared to 12.1% in Q2 FY17.

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L&T up 3% on order win of Rs 3,551 crore

STOCK MARKET - Larsen & Toubro (L&T) was up 3% at Rs 1,243 on the BSE after the company announced that its construction arm has won orders worth Rs 3,551 crore across various segment. The stock had rallied 6% on Wednesday.

“The company’s transportation infrastructure & water effluent treatment business have jointly bagged an order worth Rs 1,123 crore from a prestigious government client for design and construction of smart trunk infrastructure with roads, storm water drains, water supply network, sewerage network and others,” L&T said in a press release.

The company’s transportation infrastructure business has won engineering, procurement & construction (EPC) order worth Rs 777 crore from the Public Works Department, Delhi for the construction of integrated transit corridor development plan in and around Pragati Maidan, it added.

Water & effluent treatment business has received EPC orders worth of Rs 572 crore, while building & factories business has secured an order worth of Rs 866 crore and smart world & communication business has bagged an order amounting of Rs 213 crore, the company said.

At 10:40 AM; the stock was trading at Rs 1,236, up 2.6% on the BSE, as compared to 0.31% decline in the S&P BSE Sensex. A combined 2.2 million shares changed hands on the counter on the BSE and NSE so far.

Larsen & Toubro nears 52-week high on good Q1 results

STOCK MARKET - Larsen & Toubro (L&T) gained 4% to Rs 1,206 on BSE in early morning trade after the engineering giant reported a 46% year-on-year (Y-o-Y) jump in consolidated net profit at Rs 893 crore for the quarter ended June 2017 (Q1FY18). Consolidated revenues rose 10% to Rs 23,990 crore on Y-o-Y basis.

The stock is trading close to its 52-week high of Rs 1,223, touched on May 30, 2017 in the intra-day trade. It hit a record high of Rs 1,262 on March 4, 2015.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) margin declined to 8.1% from 9.2%, primarily due to job mix and cost overruns on extended stay in a few projects, L&T said in a press release.

Order inflow, however, fell 11% to Rs 26,352 crore over the previous year quarter.

“Order inflow reflects muted capex environment. The trend of higher public sector outlay vis-a-vis reduced private sector capex continues,” it added.

The order pipeline across segments remains strong though. The orders backlog at Rs 262,900 crore logged 2% growth during the quarter.

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5 Nifty companies announce bonus shares in 2017; highest in 11 years

MARKET NEWS - Engineering & construction giant Larsen & Toubro (L&T) and state-owned oil marketing company, Bharat Petroleum Corporation (BPCL) from the Nifty50 index in last week declared bonus shares in the ratio of 1:2 i.e. 1 new bonus equity share for every existing 2 equity shares.

Besides these two, total five companies including ICICI Bank, Wipro and Gail (India) from the index announced bonus shares thus far in the current calendar year 2017 (CY17). The number of companies from the Nifty50 index rewarding bonus shares to their shareholders is the highest in past 11 years.

Earlier, during the entire calendar year 2006, total seven companies – Cipla, Tata Consultancy Services (TCS), Infosys, Dr Reddy’s Laboratories, L&T, Oil and Natural Gas Corporation (ONGC) and HCL Technologies – from the benchmark index had issued bonus shares.

In 2015 and 2010, five companies from the Nifty 50 issued bonus shares, but Aurobindo Pharma in 2015 and Bajaj Auto and Zee Entertainment in 2010, were not part of the index in that particular year.

In last calendar year 2016, three companies – ONGC, BPCL and ITC – issued bonus shares, while in CY2015, Tech Mahindra, HCL Technologies, Infosys and Kotak Mahindra Bank had declared bonus shares, according to data compiled from CapitalinePlus.

Thus far in 2017, the equity markets have recorded its best ever start during past eight years, with the Nifty 50 index gaining 17.5% between January and May, 2017. In 2009, the benchmark index had rallied 50% during the same period.

Meanwhile, in first five months of CY17, as many as 36 companies announced bonus to their equity shareholders, against 25 firms declared bonus shares in the same period of CY16. In CY13, total 114 companies announced bonus shares, followed by 49 in CY14, 59 in CY15 and 69 in CY16.

BPCL had issued bonus shares for the past two consecutive years and third time in five years. In May 2016 and in May 2014, the state-owned oil marketing companies declared bonus shares in the ratio of 1:1 i.e. one bonus shares for every one share held.

Market observers say bonus shares are being given to improve liquidity, besides rewarding the shareholders. After the issue, the stock price gets adjusted according to the bonus ratio. The total market value of the company, however, remains the same.

A bonus share issue also indicates that the company is confident about the business’s capacity to generate value for a larger number of investors. That apart, it also helps in boosting the trading volume at the bourses, as more number of shares are traded.