Weekly Snippets

Research Desk Stock Broking

March 26, 2016

MARKET ROUNDUP
NIFTY (7716.50): Markets ended with a positive bias for the
fourth consecutive week on account consistent buying from
foreign institutional investors (FIIs) and increasing hopes of rate
cut by Central bank in the upcoming monetary policy slated on 05
Apr 2016. Nifty gained 112 points or 1.47% to close at 7716.50
and Sensex gained 384.82 points or 1.54% to close at 25337.56.
Overall breadth of market remained positive, where Banking, IT &
Commodity stocks outperformed the market, whereas Pharma
stocks remained underperformer during the week.
On the domestic front in truncated week market remained choppy
and ended at its highest note. Global market remained choppy
amid geopolitical concerns after militants targeted Brussels airport
and a city metro station on last Tuesday. Meanwhile, correction in
Crude oil prices kept risk appetite in check ahead of the long
Easter break.

Technically, Nifty is well placed above its 21 & 50-DEMA, approaching toward its major 200-DEMA which is currently placed near 7780
levels. The India VIX index a measure of volatility continued to dip to settle at 16.34 levels indicating the strength in the underlying move. In
the coming week with expiry of March contract, markets are likely to trade with positive bias and likely to head towards 7780 -7800 above
which next resistance is pegged around 7860-7900 levels. On the downside, supports are placed near 7600 levels followed by 7500-7540
area. Therefore, we recommend trade with positive bias in the range of 7600-7900 levels and any dip towards support levels can be utilized
as a buying opportunity.

Index Strategy

Report Highlights
Street Buzz, Corporate Actions, Economic events

Pg. 1-2

TECHNICAL PICK : NBCC

Pg. 5

HYBRID STRATEGIES

Pg. 5

DID YOU KNOW??- ?? NON CONVERTIBLE

DEBENTURES (NCDs)

Pg. 6

CALL RATIO SPREAD IN NIFTY

Buy one lot NIFTY March 7700 CE @ 68; Sell two lots of Nifty
March 7800 CE @ 20 | Max Gain: Rs 5400 | Max Loss: Rs. 2100
& Unlimited above UBEP | UPPER BREAK EVEN POINT
(UBEP): 7872 | LOWER BREAK EVEN POINT (LBEP): 7728 |
Time Frame: Expiry

STREET BUZZ...
The country's foreign exchange reserves surged by $2.539 billion to touch an all-time high of $355.947 billion in the week ended March 18,
on account of a rise in foreign currency assets (FCAs), the Reserve Bank has said.
The government said India will appeal against the World Trade Organizations (WTO) verdict over its policy relating to solar power
equipment. India had, as part of its National Solar Mission, imposed a stipulation that solar cells and solar modules be locally sourced. The
U.S. had filed a case against India at the WTO demanding a level-playing field for Indian and foreign solar component manufacturers. The
world body ruled in favour of the U.S.
Jewellery industry body AIBJSF on Friday decided to continue their strike for an indefinite period against imposition of 1% excise duty on
non-silver jewellery and announced plans to hand over keys of their shops to Finance Minister Arun Jaitley. AIBJSF and other local
associations, particularly those in Delhi- NCR, Rajasthan, Uttar Pradesh, Chhattisgarh and Madhya Pradesh, were against calling off the
strike.

Weekly Snippets

March 26, 2016

CORPORATE ACTIONS DURING THE WEEK

Company Code

Ex Date

Record Date

Purpose

TWL

28-03-2016

29-03-2016

Interim Dividend - Re 0.80/- Per Share (Purpose Revised)

CYIENT

28-03-2016

29-03-2016

Interim Dividend - Rs 4/- Per Share (Purpose Revised)

DLF

28-03-2016

29-03-2016

Interim Dividend - Rs 2/- Per Share (Purpose Revised)

HDFC

30-03-2016

31-03-2016

Interim Dividend

ECONOMIC EVENTS DURING THE WEEK

Event

Date

Prior

Survey

Foreign Reserves (MAR)

01/04//2016

$353.41B

Deposit Growth YoY (Q4 )

01/03/2016

10.60%

Japan Unemployment Rate (FEB)

29/03/2016

3.20%

3.20%

Germany Inflation Rate YoY

30/03/2016

0.20%

0.20%

NIFTY 50 V/S GLOBAL INDICES

SECTOR SNAPSHOT

2.00%

6.00%

1.00%

4.00%

0.00%

2.00%

-1.00%

0.00%

-2.00%
-3.00%
-4.00%

SECTORAL SNIPPETS
NIFTY BANK has closed the week with a positive gain of 1.49% and
outperformed the Nifty. The Index has bounced from the lower band
of Bollinger band and posted a V shape recovery on weekly charts.
Going ahead the Index may find resistance around 16000 levels and
any bounce above the said levels will enhance the confidence
amongst the market participants and can take the Index to the
immediate high of 16250 levels. The Index is likely to face resistance
around 16250 levels and support is placed around 15700 levels.
Hence we are expecting positive momentum is likely to continue in
the Index in coming week.

NIFTY IT has posted the gap on 17 March before resuming its up

move on daily charts. The bounce in the stock has given the V shape
recovery and maintained its bullish bias last week with supportive
volume on daily charts. Going ahead the Index may find the support
around 10850 levels and resistance is paged around 11300 levels.
We are holding the view of sideways to positive on the Index for the
coming week.

NIFTY METAL has closed the week with the gain of 3.76% and
outperformed the Nifty. The Index has given the breakout above
1875 levels. Prior to that, the Index has bounced from the lower band
of Bollinger band after making low of 1450 levels with notable volume
which reflects the near term trend in the index is up and moment in
the Index will remain intact for near term. The Index may find support
around 1800 levels and above that resistance is placed around 2050
levels.

NIFTY FMCG has closed the week with flat to positive node with the
gain of 0.38% and underperformed the Nifty. Currently the Index is
trading near its mean on the Bollinger band and expected to
consolidate for coming week. Going ahead the Index may face
resistance around 19960 levels and support is placed around 19080
levels. On the other side the bounce above the 19960 will open the
room above around 20100 levels in near term.

Weekly Snippets

March 26, 2016

FII ACTIVITY IN DERIVATIVES

In the truncated week passed by FIIs continued to remain net buyers in Index future, while they remained sellers in stock futures and this
trend has been continuing since the beginning of this month. FIIs bought index future to the tune of 1190.83 crore, while they sold stock
futures to the tune of 2286.83 crore.
In the week they added 8458 long Index future contracts, and reduced their short position to the tune of 9592 contracts.
In the stock futures, long unwinding witnessed to the tune of 17922 contracts while 29187 short contracts were added during the week.

INDEX FUTURES
362
360
358
356
354
352
350
348
346
344

Index Fut. OI

STOCK FUTURES

Index Fut. Net Buy

800
700
600
500
400
300
200
100
0

Stock Fut. OI

1054
1053
1052
1051
1050
1049
1048
1047
1046
1045
1044

Stock Fut. Net Buy

0
-200
-400
-600
-800
-1000
-1200

INSTITUTIONAL ACTIVITY IN CASH

Foreign institutional players remained buyers for the fourth consecutive week and bought securities worth around Rs. 3469 Crore in cash
segment. The FIIs have bought securities worth Rs. 12677.35 crore during the month of march as compared to negative figure in February
of Rs.16146.03 Crore. In the year 2016 till date, the FIIs have been net sellers to the tune of Rs. 10723.10 Crore.
While on the flipside, our domestic institutions have sold securities worth Rs. 2571.72 Crore for the just concluded week and for the month
they have sold securities worth Rs. 8884.12 Crore. They were positive for the month of February where they were buyers of more than Rs.
10000 Crore worth stocks. In the year 2016 till date, the DIIs have been net buyers to the tune of Rs. 14482.39 Crore

Time Frame

FII/FPI

DII

1500
FII/FPI

1200
Month Till Date (Mar)

16,146.03

-8,884.12

Last Month (Feb)

-12,513.12

10,491.61

Year Till Date (01/01/1623/03/16)

-10,723.10

14,482.39

For the CY ended 2015

-17,512.09

67,412.64

DII

900
600
300
0
-300
-600
-900
-1200

21-Mar-16

22-Mar-16

23-Mar-16

Weekly Snippets

March 26, 2016

OI CHANGES DURING THE WEEK - STOCKS

Top OI Gainers with increase in Price

Top OI Closures with increase in Price

Long Accumulation

Short Closure
OI (in
lakhs)

OI Chg
(%)

PRICE
Chg (%)

TORNTPHARM

2.95

-22.23

6.49

2.04

AJANTPHARM

3.68

-10.60

4.63

18.93

1.34

IGL

11.48

-10.00

6.16

53.82

18.58

6.04

CONCOR

13.73

-9.80

6.39

8.34

17.95

3.39

BOSCHLTD

0.93

-9.08

7.69

Stock

OI (in
lakhs)

OI Chg
(%)

PRICE
Chg (%)

TVSMOTOR

43.48

42.37

7.67

PTC

88.32

20.66

UCOBANK

111.20

JETAIRWAYS
GRASIM

Stock

Top OI Gainers with decrease in Price

Top OI Closures with decrease in Price

Short Accumulation

Long Closure

Stock

OI (in
lakhs)

OI Chg
(%)

PRICE
Chg (%)

Stock

OI (in
lakhs)

OI Chg
(%)

PRICE
Chg (%)

LUPIN

56.96

56.86

-16.26

PETRONET

41.70

-16.01

-1.08

ANDHRABANK

124.32

47.86

-2.49

DIVISLAB

23.12

-10.14

-2.04

BIOCON

23.91

16.01

-5.36

EICHERMOT

1.72

-9.77

-7.95

CADILAHC

32.42

-8.97

-0.96

HDFC

97.68

-8.57

-2.69

NIFTY OPTIONS
PCR OI V/S NIFTY

x 100000

NIFTY OPTIONS OI
70
60
50
40
30
20
10
0

CALL
PUT

7400

7500

1.20

OPEN INTEREST

7600

7700

7800

1.15

7900

8000

On the options front, Nifty 7600 PE has highest OI standing at more than
53 lakh shares which may act as good support for the Index. On the other
hand, the upside has been capped around 7800 levels where highest Call
writing is witnessed. Therefore, the range would be 7600-7800 levels with
bias on the bullish side opening the doors for 7850-7900 levels as well.

7800.00
PCR OI

NIFTY 50

7700.00

1.10

7600.00

1.05

7500.00

1.00

7400.00

0.95

7300.00

The Put Call Ratio has been trading continuously above the psychological
mark of 1 throughout the last trading week. Currently, the PCR ratio
trading around 1.17 levels indicating the strength in the market with more
aggressive Put writing. On the other hand, till the PCR ratio is holding
above 1 level, one may remain bullish on the market taking a caution note
if it breaches 1.30-1.40 levels.

Weekly Snippets

March 26, 2016

PICK OF THE WEEK BUY NBCC | CMP: RS 941.60

ACT

BUY

ENTRY

940

SL

810

TGT

1100-1130

TIMEFRAME

4-6 months

The stock has given the breakout of downward sloping trend line drawn from the high of 1320 levels. Prior to that, the stock has seen sharp cut from
the high of 1320 levels and the selling pressure in the stock has placed the stock to the low of 852 levels. Thereafter, the stock spends
approximately six week in the consolidation range of 850-990 levels before giving breakout. The breakout has placed the stock above the all its
major moving averages which reflect the strength in the counter.

The move started from the low of 852 levels has placed the stock above the cluster of resistance placed in the range of 1005-1085 levels. The
recent development in the stock suggests inherent strength in the stock and the stock is well placed to test its all time high levels which are pegged
at 1320 levels in near term.

The parabolic SAR has triggered the fresh buy signal on the weekly charts and the price is trading well above the same. Which reflects the uptrend
in the stock will remain intact in the near term.

The stock is trading comfortably above the 50% of the retracement levels drawn from the high of 1320 to the low of 852 levels. The above discussed
price action suggests strength in the counter and the stock is well placed to take it up move for the immediate target of 1320 levels (all time high)
and above in near term. Hence, we suggest buy in the stock keeping stop loss of 890 levels for the target of 1400- 1450 levels in 4-5 months.

HYBRID STRATEGY

HYBRID STRATEGY

COVERED CALL IN LT

CALL LADDER IN BAJAJ-AUTO

LT has been trading with a bullish bias in the last trading week
and has breached the stiff rsistance zone of 1220-1225 levels.
The stock also has filled the gap area around 1235-1240 levels
and closed well above the same. We recommend one may build
covered call strategy with stop loss placed below 1230 levels

BAJAJ-AUTO has been trading with bullish bias in the last trading
week and has breached the stiff rsistance zone of 2350 levels.
Stock is in short-term up trend forming higher highs and higher
lows. On derivate front, the stock has seen a long addition in OI in
the previous week with increase in price. Hence, we
recommended a Call Ladder strategy.

Buy one lot of LT March Futures @ 1245 and sell one lot of
LT March 1260 CE at 10 | Maximum Profit: 7500 | Maximum
Loss: Unlimited | Break Even Point: 1235 | SL: Below 1230 |
Time Frame: Expiry.

20000

Buy one lot of BAJAJ-AUTO March 2350 CE @ 34 and Sell

one lot BAJAJ-AUTO March 2400 CE @ 13 & Sell one lot of
BAJAJ-AUTO March 2450 CE @ 4.50 | Max Gain: Rs 6700 |
Max Loss: Rs.3300 & Unlimited above UBEP | Upper Break
Even Point: 2483.50 | Lower Break Even Point: 2366.50 | SL:
2310 | Time Frame: Expiry

10000
0

-40000
-50000
-60000
-70000

Payoff at Expiry

-10000
-15000
-20000
-25000

2600

2550

2500

2450

2400

2350

2300

2250

2200

-5000

2150

-30000

2100

0
2050

-20000

2000

5000
1950

1440

1400

1360

1320

1280

1240

1200

1160

1120

1080

1040

-10000

10000

Weekly Snippets

March 26, 2016

Did You Know?? NON CONVERTIBLE DEBENTURES (NCDs)

CONCEPT
A mode of raising capital for the companies, Non Convertible Debentures allows an entity the option of borrowing money from the
public without having to dilute the stake in ownership as seen in equity. Non convertible debentures form the debt category of the
Balance Sheet of a company that can be secured or unsecured in nature. Depending upon the market scenario and liquidity
condition in the economy, the interest rates are arrived at which are offered by the NCDs. As a norm the interest rates offered
are slightly higher than fixed interest bearing instruments like fixed deposit. But as these are Tax Bearing instruments the interest
rate cannot be compared in absolute terms and must take into account the probable tax pay out by the participant. Interest on
NCDs is paid at different time period like quarterly, semi-annually or annually. They also have an option of cumulative interest in
which case interest is cumulated & paid on maturity.
MODE OF INVESTMENT
NCDs can be accessed by investors in similar fashion as is done for equities.

Public Issue: During the public issue of the bonds, you can invest in them by submitting a physical form furnishing the
details as requested.
Exchange: NCDs bonds are listed on NSE or BSE or at times on both after the Public Issue. You can invest in these
bonds through your trading account like the way you invest in shares. However, NCDs have liquidity risk. Even if NCD
get listed, low volumes can deprive investors of any opportunity in exiting prematurely.

BENEFITS OF NCDs

Credit Rating: It is mandatory for companies seeking to raise money through NCDs to get their issue rated by agencies
such as CRISIL, ICRA, CARE and Fitch Ratings. Ratings by a third party assess the quality of the issue in terms credit
performance providing the potential NCD holder with valuable insight. NCDs with higher ratings are safer but carry lower
interest rate as this means the issuer has the ability to service its debt on time and carries lower default risk and vice
versa.
Liquidity: Listing of NCDs on exchanges like NSE & BSE provides liquidity to your investments
Tenure: The tenure on NCDs can be between 2 years to 20 years making for excellent long term investment plan.
TDS: Tax Deducted at Source is not applicable on listed debentures.
Easy Monitoring: As NCDs can be purchased and sold like shares in Demat Form they provide easy monitoring.

TAXATION
Tax treatment is exactly similar to any other interest income such as interest income from FDs. Interest income from NCDs will be
subjected to tax at normal rates by including it in Income from other sources. The principal amount received on maturity is not
taxed at all. But if you decide to sell NCDs on stock exchange where it is traded, then capital gains arises.
Short Term Capital Gains Tax is applicable depending on the tax slab you fall into if the instrument is sold before a year.
Long Term Capital Gains Tax is applicable at 20% with indexation & 10% without indexation

CURRENT TREND

As per the provisional data with Securities and Exchange Board of India (Sebi), Indian firms have raked in a mammoth total of Rs
58,533 crore through NCDs in the current fiscal (2015-16) as on march 14 which is much higher compared to Rs. Rs 9,713 crore
garnered in the entire last fiscal. Experts believe that due to the volatile market conditions have forced many companies to opt for
NCD route to garner fresh capital. Most of the funds have been mobilised for expansion, to support working capital requirements
and for other general corporate purposes.

Weekly Snippets

March 26, 2016

KARVY RESEARCH DESK

QUERIES & FEEDBACK

JK Jain

Toll-Free: 1800 425 8283

Head Research

Email ID: service@karvy.com

KARVY STOCK BROKING LTD

KARVY STOCK BROKING LTD| Karvy Millenium | Plot No : 31| Financial District |Gachibowli | Hyderabad - 500 032

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