A person who keeps patience is sure to win in share market - Suresh Rathi
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A person who keeps patience
is sure to win in share market.
Wealth Creator thru Systematic Investment
Suresh Rathi
Suresh Rathi
Wealth Creator thru Systematic Investment Daily Research Reports
Disclosures and Disclaimer : This report must be read with the disclosures in the Disclosure appendix,
and with the Disclaimer, which forms part of it. This document does not contain any investment views or opinions.
Suresh Rathi Market Forecast Thursday
Wealth Creator thru Systematic Investment
22nd July, 2021
Good Morning & Welcome to Thursday’s trading action at Dalal Street INDICES
dated 22nd of July 2021.
Nifty 15632 -0.76%
The good news judging by SGX Nifty’s early action is that Dalal Street is likely to Bank Nifty 34415 -1.89%
swing to a positive session —— especially from its last two-session’ rout.
Nifty Auto Index 10222 -0.86%
That brings us to the 3-big questions of the day:
Nifty FMCG Index 36230 0.14%
1. Will Nifty rise and shine? Nifty Infra Index 4413 -0.59%
2. Will stocks pick up momentum again? Stocks to buy? Nifty IT Index 29253 -0.04%
3. Or will it be selling on any early excessive strength? Nifty Media Index 1745 -2.58%
Nifty Midcap Index 7503 -1.67%
Our call of the day suggests that there is a light at the tunnel for benchmark
Nifty. Nifty Metal Index 5194 -2.34%
The positive catalyst: A rebounding Wall Street. Nifty Pharma Index 14479 -1.30%
Nifty Reality Index 389 -2.53%
That said; confirmation of strength only on any close above Nifty 15725 mark.
Investors who hold onto the benchmark above 15725 mark may stand to benefit. Nifty Smallcap Index 10304 -1.41%
Alternatively, if Nifty is unable to move above 15725 mark then traders should sell 52199 -0.68%
Sensex
first and then ask questions later.
SGX Nifty 15689 0.51%
Now with regards to stocks, market history says the answer is both No and Yes.
Traders can expect more short-term volatility. But for investors with a little
patience, the bullish signals are quite enticing with inter-month perspective and Outlook for the Day
look more solid. Well, Pidilite and Grasim are our preferred bets on the buy side. Buy on dips
What comes next for Nifty and Bank Nifty?
• Preferred trade on Nifty (15632): Buy between 15600-15625 zone.
Targets at 15728/15837 mark and then aggressive targets at 16001 mark Nifty Outlook
with strict stop at 15411.
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Suresh Rathi
Intraday Neutral (15601-15851)
• Preferred trade on Bank Nifty (34415): Sell between 34901-35101
Medium Term Positive (15151-16250)
zone. Targets at 34001/33849 and then aggressive targets at 32523 mark
with stop at 35611. Long Term Positive (13501-16501)
• BULLISH STOCKS: PIDILITE, GRASIM, BERGER P[AINTS, AUROBINDO
PHARMA, LUPIN, MCDOWELL, ITC.
• BEARISH STOCKS: ADANIPORTS, BANDHANBANK, BHARAT FORGE,
Key Levels to Watch
METROPOLIS, IRCTC, INDIGO. Nifty Support 15591/15449
• Our chart of the day is bullish on stocks like PIDILITE and GRASIM with Nifty Resistance 15857/16027
interweek perspective.
• SHOW ME THE MONEY: Momentum Call: Buy PIDILITE July Futures for Pivot Level
0-3 days at CMP 2314 for an objective of 2351/2393/2451. Stop 2243.
Nifty 15411
Alert: BREAKOUT PLAY.
Wealth Creator thru Systematic InvestmentSuresh Rathi Market Forecast
Wealth Creator thru Systematic Investment
• FY21-22 Q1 earnings to trickle in this week:
Technical Strategy
• Thursday, 22nd July 2021: HINDUSTAN UNILEVER, ULTRATECH CEMENT,
BAJAJ AUTO, AGRO TECH FOODS, BAJAJ HOLDINGS & INVESTMENT, AUROBINDO PHARMA 966
BIOCON, CAN FIN HOMES, CHENNAI PETROLEUM CORPORATION, CSB
Action BUY
BANK, HEIDELBERGCEMENT INDIA, HINDUSTAN ZINC, ICICI LOMBARD
GENERAL INSURANCE COMPANY, INDIAN ENERGY EXCHANGE, IIFL Target 1063
SECURITIES, INDIAMART INTERMESH, INDIA PESTICIDES, LLOYDS
STEELS INDUSTRIES, BANK OF MAHARASHTRA, MAHINDRA EPC Support 917/863
IRRIGATION, MPHASIS, PERSISTENT SYSTEMS, MUSIC BROADCAST,
SHIVA CEMENT, SOUTH INDIAN BANK, STERLITE TECHNOLOGIES, AND Resistance 1063/1201
WOCKHARDT
Holding Period 60-90 days
• Friday, 23rd July 2021: AMBUJACEM, YESBANK, RELIANCE, JSWSTEEL,
FEDERALBANK. Aurobindo Pharma Ltd. was incorporated in the year 1986 and now
commands a market cap of Rs. 58,215 Crores. Founded by Mr. P. V.
• Jubilant FoodWorks, reported a net profit of Rs 63 crore for the first quarter Ramprasad Reddy and Mr. K. Nityananda Reddy, the firm is a market leader in
Semi-Synthetic Penicillins, and also has a presence in key therapeutic
ended June (Q1FY22), as compared to a net loss of Rs 74 crore reported segments such as neurosciences, cardiovascular, anti-retrovirals, anti-
diabetics, gastroenterology and cephalosporins. The positive triggers:
during the corresponding period in FY21. The results were above street • 7th Largest generic company by revenue globally.
expectations. • 2nd Largest listed Indian pharmaceutical company by revenues.
• 2nd Largest generic company by Rx dispensed in the US.
• Havells posted a 268.5 percent year-on-year (YoY) rise in its consolidated • Amongst top 10 Generic companies in seven out of 11 countries in
Europe.
net profit at Rs 235.78 crore for the June quarter of the current fiscal year • $3.3 billion global revenues in FY 2027 Manufacturing & packaging
faclilities globally. 90% of its revenues derived from international
(Q1FY22). operations.
• 36 billion + diverse dosage forms manufactured in FY 20.
• 23000+ employees
Outlook for Thursday: Consolidation likely to be the • Aurubindo has just made a favorable announcement as has decided to
transfer its generic injectables and ophthalmics manufacturing unit to
its wholly owned unit Eugia Pharma Specialities for Rs 876 crore in a
preferred theme after last 2-sessions rout. slump sale. The unit had revenues of Rs 926 crore in FY21 and
accounted for 5.86 per cent of the company’s turnover on a standalone
basis. Separately, it was also decided to transfer unit-10 business
There’s still plenty to worry about. The theme at front pages suggests that the undertakings to APL Healthcare, a wholly-owned subsidiary, for Rs
1,315 crore. The proposed slump sale will provide flexibility for value
virus unlikely to go away despite widespread vaccinations. New restrictions are creation opportunities including exploration of alliances with focused
partners to enhance capabilities/growth prospects in injectables
being imposed This could be problematic for sectors like travel which were business. . The generic injectable are expected to reach US$700mn by
FY24.
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Suresh Rathi
expected to benefit the most from the reopening of the global economy. • Aurobindo injectable business is trading multiple is around 10x. We
suspect, there is a large upside as injectables is a fast growing business
and this way the valuation of that business would be discovered. The
Earnings and rising coronavirus cases around the world remained in focus for injectable business is just 9% of their sales and so they would still have
the bulk of the sales left in their listed entity.
investors.
• The medium term growth drivers for Aurobindo are likely to be Vaccine
and PLI scheme and niche product basket instead of large acquisition.
Now, here are other key things to know before today’s market opens: • The API revenue is expected to double over the next 3 years. To meet
the demand, the management has planned expansion of API capacity
and purchased land in Vizag for the same.
• Technically speaking, the intraday support seen at 15591 mark and a break
• Aurobindo has applied for 3 products under PLI scheme and expects to
below shall lead to more declines towards Nifty’s biggest support at 15449 spend.
• The firm will be filing 2 biosimilars in FY22 and FY23 with the first launch
mark. If Nifty slips below the 15449 mark then it’s safe to assume that rising expected in Fy23.
inflation risks are spoiling the party at Dalal Street with targets at 15151- • Net cash balance sheet and strong operating cash flows.
• Aurobindo is likely to deliver 15% earnings CAGR over FY20-22E, led
15201 zone. by new launches /increased market share in key markets of the US/EU
and lower financial leverage.
Confirmation of strength above Nifty 15725 mark. Only a clear breakout • The positive triggers for Aurobindo are (a) capability to build a niche
portfolio in the Injectables/Biosimilars/Inhaler space, (b) established
above the magical Nifty 16000 will be seen as super-bullish. presence across the manufacturing value chain in the US market, and
(c) improving trajectory of profitability in the EU market.
Simply buy at CMP, and on dips between 907-921 zone, targeting
Nifty’s 200 day EMA at 14249 mark. The price action for Nifty for this week’s 1063/1107 mark and then at psychological 1200 mark. Holding
Period: 3 Months+
trade is suggesting that we are likely to see a 15,500- 16000 range in near
term.
Wealth Creator thru Systematic InvestmentSuresh Rathi Market Forecast
Wealth Creator thru Systematic Investment
• Nifty and Sensex have scaled fresh all-time-highs in the week gone by, but the foreign institutional investors continue to be the
in the sell side taking money off the table. FIIs have sold to the tune of Rs 11,957.28 crore in the month of July.
• The options data for July series suggests Nifty is likely to be in a trading range of 15500-16000 as maximum Call OI is at 16000
followed by 15800 strike price. Maximum Put open interest stands at 15000 levels followed by 15500 levels. Call writing was
seen at 15700 and then at 15600 strike price, while there was meaningful Put writing at 15600 and then at 15200 strike prices.
• The slight optimism for our stock markets is also on backdrop of the fact that the volatility index is seen hovering at 13.20
levels. Well, a lower VIX level is seen bullish for stocks.
• The yield on the benchmark 10-year Treasury rose Wednesday to 1.267%.
FII/DII & OPTIONS DATA:
• The Put-Call Open Interest Ratio was at 1.17 for Nifty.
• As per Friday’s provisional data available on the NSE, FIIs sold shares worth Rs. 466.30 crores in the Indian Equity Market. DIIs
on the other hand bought shares worth Rs. 666.07 crores in the Indian Equity market.
• As per Monday’s provisional data available on the NSE, FIIs sold shares worth Rs. 2198.71 crores in the Indian Equity Market.
DIIs on the other hand bought shares worth Rs. 1047.66 crores in the Indian Equity market.
• As per Tuesday’s provisional data available on the NSE, FIIs sold shares worth Rs. 2834.96 crores in the Indian Equity Market.
DIIs on the other hand bought shares worth Rs. 873.14 crores in the Indian Equity market.
• Stock banned in F&O segment: CADILA, CANBK, IBULSHSGFIN, NATIONALUM, NMDC, SUNTV.
ECONOMIC CUES:
• Auto finance companies are expected to post a sharp rise in bad debts due to Covid-19-related shutdowns announced by
various State governments in April and May. The auto loan business of Bajaj Finance--the first non-banking finance company
to announce results for June quarter--has reported a sharp rise of 19 per cent in bad debts in the June quarter, led by defaults
in the two- and three-wheeler segments.
• Powell repeats view of ‘Transitory Inflation’, but also highlights the role inflation expectations play as an
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Suresh Rathi
input to central-bank policy. Powell said that central-bank officials will continue to discuss their timeline to
reduce the pace of its bond purchases at coming meetings.
GLOBAL STOCK MARKETS:
Overnight at Wall Street, U.S stocks rose following a rebound in Tuesday’s session as investors focused on earnings and looked
beyond the economic impact of rising coronavirus infections across the globe.
Wall Street had ended on a negative note in last week’s trade after surging inflation led to an unexpected decline in U.S. consumer
sentiment in early July.
The small-cap Russell 2000 RUT is seen flirting near 2,124 mark. A close below 2,124.15 would mark a pullback of 10% from its
recent high, meeting the widely used definition of a market correction.
Denting sentiments were reports that Japan is struggling to host the Olympics amidst a pandemic.
In the week gone by, the Dow saw a 0.5% weekly decline, while the S&P 500 had a 1% weekly loss and the Nasdaq fell 1.9% for the
week. The small-capitalization Russell 2000 index dropped 5.1% for the week in its third straight weekly loss. Interestingly, Dow
registered an all-time high at 35090, S&P 500 hit at 4375.09 and Nasdaq’s high was at 14803.6.
Wealth Creator thru Systematic InvestmentSuresh Rathi Market Forecast
Wealth Creator thru Systematic Investment
IPOs and Listing:
• Investors will also eye at the IPO share allotment of Zomato, which is expected on July 22. The Rs 9,375-crore public issue has
received more than Rs 2 lakh crore of bids in three days - July 14-16, including over Rs 1.5 lakh crore of bids only by qualified
institutional buyers, helping the issue get subscribed 38.25 times. The funds will be refunded around July 23.
What Technical Tells Us on Nifty/Sensex:
In Tuesday’s trade, the bears were seen tightening grip further. The negative take away was that Nifty slipped below its 9th July low
at 15632 mark.
Key support levels were rattled in today’s trade as the benchmarks witnessed another down day at Dalal Street. Nifty breached key
intraday support at 15632 mark but managed to end at the same level.
In the broader markets, the BSE MidCap and SmallCap indices slipped 1.3% and 1.4%, respectively.
The other key highlights of Tuesday’s trade:
• Nifty gave up 15700 mark.
• Only 10 of 50 Nifty stocks ended the day in the green.
• Top Index gainers: ASIANPAINT (+5.47%), ULTRACEMCO (+1.77%), HUL (+0.97%)
• Top Index losers: HINDALCO (-3.72%), INDUSINDBANK (-3.19%), TATASTEEL (-2.72%).
Daily chart of Nifty:
Wealth Creator thru Systematic Investment
Suresh Rathi
Wealth Creator thru Systematic InvestmentSuresh Rathi
Wealth Creator thru Systematic Investment
TOP PICKS (F & O)
It's like having investment binoculars !
Pidilite: A Screaming buy. Aggressive targets at 2475 mark.
STOCKS LTP S1 S2 R1 R2 BIAS TRADING STRATEGY
Interweek Strategy: Buy between 846-851 zone,
targeting 881 and then at 901-907 zone. Stop below 837.
BERGERPAINTS 865 846 829 881 907 Positive BERGER PAINTS enjoyed a strong session in Tuesday's
trade, up 3.55%. The sequence of higher high intact on
all time frames.
Interweek Strategy: Buy at CMP, targeting 1621 and
then at 1691-1701 zone. Stop below 1535. GRASIM is
GRASIM 1574 1539 1509 1621 1701 Positive signalling a breakout from a probable 'flag pattern' on
daily charts.
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Suresh Rathi
Interweek Strategy: Buy at CMP, targeting 2351/2389
PIDILITE 2315 2271 2332 2351 2475 Positive and then at 2450-2475 zone. Stop 2271. PIDILITE is
signaling a massive breakout on the daily charts. Key
support seen at 2271 zone.
Interweek Strategy: Sell on any early strength between
BHARAT FORGE 799 795 769 821 833 Negative 807-813 zone, targeting 795/783/769. Stop 839.
Overbought technical conditions prevail.
Interweek Strategy: Sell between 467-471 zone,
LIC HOUSING 453 454 437 475 489 Negative targeting 454/437. Stop 491. Bearish reverse
divergences on daily charts.
FINANCE
Wealth Creator thru Systematic InvestmentThursday
Suresh Rathi EQUITY DERIVATIVES 22nd July, 2021
Wealth Creator thru Systematic Investment Looking into the future from present.
Derivatives Strategies
Changes in Open Interest (OI) in yesterday’s trade.
Future Call: BUY MPHASIS JULY FUTURES at CMP 2377.65.
Nifty Spot 15632.10 (-0.76%)
Targets at 2417 and then at 2466. Stop: 2327. Holding Period:
Intraday. Analyst’s Remark: Momentum Play (MPHASIS JULY Bank Nifty Spot 34415.45 (-1.89%)
Futures CMP 2377.65)
VIX 13.205 (+4.14%)
Option Call: SELL NIFTY 29th JULY CE Strike Price 15600 at CMP Premium -02 vs +09
91.05. Maximum Profit: Rs. 6,828.75/-. Loss: Unlimited. Stop: Exit Nifty Future OI 0.95 crores (+4.08%)
Call Option if NIFTY moves above 15775. (NIFTY JULY Futures
CMP 15630). Bank Nifty Future OI 23.10 lakhs (+8.32%)
Market Summary: Cash Volumes Day Before
Yesterday
(INR in Cr.) Yesterday
• Nifty July Futures ended Tuesday’s session at a discount of -02 vs
premium of +09. BSE Cash Vol.
6558 8193.52
(Rs. in Cr)
• The 22nd July expiry Put-Call Open Interest Ratio was at 0.52 for
NSE Cash Vol.
Nifty whereas it was 0.45 for Bank Nifty. 63,940.35 65,921.66
(Rs. in Cr)
• The 22nd July expiry Put-Call Volume Ratio was at 0.88 for the Nifty NSE Derivative
and 0.98 for Bank Nifty. 57,05,481.09 44,36,548.76
Vol. (Rs. in Cr)
• For Nifty, Maximum Call Open Interest (OI) stands at 15800 Strike
Price, followed by 15700 Strike Price for 22nd July Series. Long Derivatives Vol. No of Turnover
unwinding was seen at strike prices 15900-16000. (INR in Cr.) contracts (Rs. In cr.)
• Maximum Put Open Interest (OI) was seen at strike price 15500
Index Future Volumes 3,75,120 30,805
followed by 15600 strike prices for 22nd July series. Short covering
was seen at strike prices 15700-16000. 8,29,511 67,065
Stock Future Volumes
• For Bank Nifty, Maximum Call Open Interest (OI) stands at 36000
Strike Price and Maximum Put Open Interest stands at 33500 Strike Index Option Volumes 5,56,23,208 53,52,529.50
Price.
Stock Option Volumes 30,13,225 2,55,081.04
• As per Tuesday’s provisional data available on the NSE, FIIs sold
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shares worth Rs. 2834.96 crores in the Indian Equity Market. DIIs on Total 5,98,41,064 57,05,481.09
the other hand bought shares worth Rs. 873.14 crores in the Indian
Equity market.
Major Changes in Nifty Options (OI)
• Long Buildup: ACC, ASIANPAINT, PIDILITE.
Calls in lakhs (% Change)
• Short Buildup: TATAPOWER, HDFCBANK, VEDL, M&MFIN,
15500 2.84 (+114%)
JINDALSTEL.
15600 17.46 (+577%)
• Short Covering: TCS, HUL, AARTIIND, MPHASIS.
15700 54.28 (+272%)
• Long Unwinding: JSWSTEEL, HCLTECH, BEL, DLF.
• Stocks banned in F&O segment: CADILA, CANBK, Puts in lakhs (% Change)
IBULSHSGFIN, NATIONALUM, NMDC, SUNTV. 15700 15.75 (-47%)
• New in Ban: CANBK. 15800 16.48 (-27%)
• Out of Ban: PNB, SAIL. 15900 7.36 (-40%)
Wealth Creator thru Systematic InvestmentSuresh Rathi
Wealth Creator thru Systematic Investment
The Navigator
…Sailing global trend
Wall Street: Concerns about the Delta covid variant and higher inflation are weighing on sentiment.
Instrument LTP S1 S2 R1 R2 Bias TRADING STRATEGY
Interweek Strategy: Establish buy positions only above 1829 zone.
GOLD $ 1803 1787 1753 1849 1881 Neutral Targets 1849/1881 mark with stop at 1776.
Interweek Strategy: Establish buy positions only above 26.69 zone.
SILVER ($) 25.15 24.69 23.67 27.45 30.55 Neutral Targets 27.45/30.55 with stop at 24.41.
WTI CRUDE Interweek Strategy: Establish buy positions at CMP. Targets 71.05/75 and
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Suresh Rathi
70.23 67.75 65 71.05 75 Positive then at 77.50 zone stop at 67.05.
OIL ($ )
Interweek Strategy: Establish short positions between 1.1855-1.1875
EUR/USD 1.1801 1.1721 1.1698 1.1929 1.2251 Neutral zone. Targets 1.1721/1.1698 with stop at 1.1949.
Interweek Strategy: Establish buy positions at CMP. Targets 93.05/94.25
US Dollar Index 92.79 91.79 90.00 93.05 94.00 Neutral with stop at 91.49.
Overbought technical conditions prevail. Interweek Strategy: Establish
DOW JONES 34771 32596 31789 35289 36219 Positive buy positions at CMP. Targets 35289 and then aggressive targets at
36219 mark with stop at 32119.
Wealth Creator thru Systematic InvestmentSuresh Rathi Group
DISCLAIMER: This is solely for information of clients of Suresh Rathi Group and does
not construe to be an investment advice. It is also not intended as an offer or solicitation
for the purchase and sale of any financial instruments. Any action taken by you on the
basis of the information contained herein is your responsibility alone and Suresh Rathi
Group, its subsidiaries or its employees or associates will not be liable in any manner for
the consequences of such action taken by you. We have exercised due diligence in
checking the correctness and authenticity of the information contained in this
recommendation, but Suresh Rathi Group or any of its subsidiaries or associates or
employees shall not be in any way responsible for any loss or damage that may arise to
any person from any inadvertent error in the information contained in this
recommendation or any action taken on basis of this information.
Technical analysis studies market psychology, price patterns and volume levels. It is used
to forecast future price and market movements. Technical analysis is complementary to
fundamental analysis and news sources. The recommendations issued herewith might
Suresh Rathi be contrary to recommendations issued by Suresh Rathi Group in the company research
undertaken as the recommendations stated in this report is derived purely from technical
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analysis. Suresh Rathi Group has based this document on information obtained from
sources it believes to be reliable but which it has not independently verified; Suresh Rathi
Group makes no guarantee, representation or warranty and accepts no responsibility or
Suresh Rathi Group liability as to its accuracy or completeness. The opinions contained within the report are
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Suresh Rathi
Mobile no. 9649654000 based upon publicly available information at the time of publication and are subject to
change without notice. The information and any disclosures provided herein are in
Email: info@sureshrathi.in summary form and have been prepared for informational purposes. The
Web: www.sureshrathi.com recommendations and suggested price levels are intended purely for trading purposes.
The recommendations are valid for the day of the report however trading trends and
volumes might vary substantially on an intraday basis and the recommendations may be
subject to change. The information and any disclosures provided herein may be
considered confidential. Any use, distribution, modification, copying, forwarding or
disclosure by any person is strictly prohibited. The information and any disclosures
provided herein do not constitute a solicitation or offer to purchase or sell any security or
other financial product or instrument. The current performance may be unaudited. Past
performance does not guarantee future returns. There can be no assurance that
investments will achieve any targeted rates of return, and there is no guarantee against
the loss of your entire investment.
POTENTIAL CONFLICT OF INTEREST DISCLOSURE (as on date of report)
Disclosure of interest statement – • Analyst interest of the stock /Instrument(s): - No.
• Firm interest of the stock / Instrument (s): - No.
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