Another fine Friday start! Indices to open in green
The capabilities of the market seem to have improved this week with the indices playing along ever since the Union Budget was announced. The reasons may be beyond the budget but the momentum almost appears too good to be true for now. After breaking past the 1-month supply zone of 7225-7250 on Wednesday, the Nifty on Thursday sprung above its mid-point resistance of 7397 and also the 50DMA further strengthening the current upswing. Market participants will watch if the Nifty takes a shy at 7600 in the coming days.
The indices are expected to open on a positive note for the fourth time in a row. Asian markets are a bit subdued with Japan's Nikkei and China's CIS300 trading flat. Hong Kong's Hang Seng is up 0.6%, South Korea's Kospi is down 0.25% and Taiwan's TWSE has gained 0.3%. US stock indices recovered from early losses to end modestly higher on Thursday, marking a third successive day of gains for Wall Street.
Trading ideas (Time period: 1-3 days)
Axis Bank (BUY, above Rs415, Target Rs433, SL Rs407): Axis Bank on the daily chart gave a breakout from descending trendline as the price closed above the downward sloping trendline of Rs410. After consolidating for almost 10 weeks, stock has signaled breakout from this pattern. This corroborates strength and sustainability from here on and stock is expected to test its December peak. Similar breakout has also been confirmed in the RSI oscillator with a positive crossover. (Duration 5 days)
Derivative strategies (Time period: Till expiry)
² Buy Fut SRF March Above Rs1155 with SL of Rs1120 for target of Rs1225
Lot size: 400 Remarks: Net maximum profit of Rs28,000 and net maximum loss of Rs14,000
Corporate Snippets
² In a boost to firms like ONGC and Reliance Industries, the government plans to raise natural gas price by about 60% for their undeveloped gas discoveries in difficult areas. While domestically-produced gas is currently priced at an average of rates in gas-surplus countries like the US, Canada and Russia, for deep-sea discoveries yet to be developed, the government plans to price them at an average cost of alternative fuels -- naphtha and fuel oil as well as imported LNG. (BS)
² The Gujarat government prohibited the strike at the Tata Motors plant in Sanand and ordered workers, protesting the suspension of 28 colleagues, to resume work immediately. (BS)
² Essar Steel has emerged as the successful bidder in the first iron ore block offered for e-auctions in Odisha. A robust bidding helped the steel maker to bag the block, upstaging strong contenders like Tata Steel, Jindal Steel & Power Ltd (JSPL) and JSW Steel. (BS)
² TVS Motor announced the launch of its new four-stroke moped, TVS XL 100, in Andhra Pradesh and Telangana. (BS)
² Putting brakes on the vicious circle of loss funding to the power distribution companies across the country, the agreement for restructuring of loans under UDAY restricts the states signing up from availing any short-term loan from any bank or financial institutions. Further to it, the working capital of the discoms would be funded by states through loans which could be only 25% of the discoms' revenue from last year. The loans can be availed from state owned Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).
² Following the Budget proposal to levy infrastructure cess on automobiles, the country's largest passenger car maker Maruti Suzuki India said the ex-showroom prices of its models would go up in the range of Rs1,441 to Rs34,494 across its models. (BL)
² Tata Power, rolled out its third Tata Power Skill Development Institute (TPSDI), a Centre for Excellence for Power Plant Skills, at Maithon Power. The institute was inaugurated by Ashok Sethi, COO and executive director, Tata Power. (ET)
² Eveready Industries India plans to hive off its packet tea business. As per reports, Eveready Industries India will also collaborate with promoter group's plantation company, McLeod Russel India to scale its hived off packet tea business. (BS)
Economy snippets
² Telecom operators moved the Supreme Court against telecom regulator Trai's regulation for compensation for call drops. The hearing for the matter is expected to come up on March 4th. (BS)
² More than three hundred thousand jewellers are participating in the three-day pan-India strike to protest against the proposed re-imposition of one percent excise duty on gold and diamond jewellery. (BS)
² Opposing the Budget proposal to permit 100% FDI in food processing segment, traders body CAIT said the move would adversely impact farmers and will result into mass unemployment. (ET)
² Government plans to set up four new major ports at Tamil Nadu, Maharashtra, West Bengal and Andhra Pradesh at an investment of Rs320bn under PPP model. (ET)
Warm Regards,
Amar Ambani
IIFL
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