BANK NIFTY INDEX-Technical View

Research Desk –Stock Broking
India
ValueMax
AUGUST 01, 2016
ValueMax
Monthly Investment Ideas
ValueMax helps clients to take a long stance on stocks from the S&P BSE-100 universe. Comprising
monthly technical investment ideas, ValueMax will have 10 stock recommendations, which will be issued
at the beginning of every month. The selection and recommendation criteria will be based on technical
analysis.
ValueMax is a brief technical report on the ideas, justifying our view on the stocks and the reason for the
selection. The report is also available on Karvyonline.com. Book profit/exit messages will be
communicated through our trading platforms during the LIVE market under the head ValueMax.
Please find the ValueMax investment ideas for August 2016.
Stock
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
ASHOKLEY
AUTO
95.25
Buy
92
89
102
106
AXISBANK
BANKING
546.15
Buy
518
498
600
620
BPCL
ENERGY
592.65
Buy
568
540
650
685
FMCG
922.55
Buy
885
845
1000
1025
INFRATEL
TELECOM
395.4
Buy
380
360
435
443
LICHSGFIN
BFSI
520
Buy
495
480
565
580
PHARMA
829.95
Buy
790
760
900
930
METAL
355.05
Buy
332
320
390
405
IT
2619.3
Buy
2505
2400
2835
2920
CEMENT
3718.2
Buy
3500
3395
4095
4200
HINDUNILVR
SUNPHARMA
TATASTEEL
TCS
ULTRACEMCO
CMP: Current Market Price;
SL: Stop Loss;
Tgt: Target
Note: All charts are sourced from Spider Software.
1
ValueMax
Stock
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
ASHOKLEY
AUTO
95.25
Buy
92
89
102
106
Key levels
Moving averages
Support
Resistance
21 day EMA
95.39
93
99
50 day EMA
97.74
91
102
200 day EMA
94.34
89
106

ASHOKLEY has lost around 1.50% during the week whereas NIFTY AUTO has almost gained 2%. During the month,
the stock has given a negative return of 3.15%; significantly underperforming the Auto index i.e. NIFTY AUTO which
has gained 6.85% month on month basis. The stock is expected to outperform in the coming sessions.

The stock had fallen from its 52-week highs of 112.90 levels clocked in the month of April‟16 and slipped towards 8990 levels, where its 50-DEMA was placed on the weekly charts. The stock has taken support at the lower levels and
has built a base and is likely to resume its upward journey towards 102-106 levels in the coming sessions. The stock
has consolidated for around 2 months in the range of 90-100 levels. The volume witnessed in the stock during the
consolidation phase was decent, signaling accumulation in the counter at the lower levels.

The stock is trading above its 200- DEMA levels on the daily charts and above its 50/100/200-DEMA on the weekly
charts indicating strength in the counter.

Among the indicators, the 14-day RSI has already given a positive crossover with 9-day signal line and is pointing
northwards on the daily charts, clearly indicating bullishness in the counter is likely to continue in the near term. The
Parabolic-SAR is placed below the price on the daily charts, further indicating positive biasness in the counter.
Our take: The recent price action suggests that the positive momentum in the stock is likely to continue and the counter is
expected to trade higher in the coming sessions. Thus, we recommend buying the stock for the targets of 102-106 levels
and add further on any dip towards 92 levels with a stop loss placed below 89 levels.
2
ValueMax
Stock
AXISBANK
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
BANKING
546.15
Buy
518
498
600
620
Key levels
Moving averages
Support
Resistance
21 day EMA
545
530
560
50 day EMA
529
518
600
200 day EMA
489
498
620

Axis Bank has rallied a whopping 57% from its February lows of 365-370 in a span of five months outperforming the
bench mark index Bank Nifty, that has moved up around 42% in the same time period. The last month witnessed a
subdued movement in the counter with the largest fall coming in the penultimate week of July. However the positive
trend in the stock is still intact and the stock looks poised to continue its bullish trend in the near future.

Fibonacci retracements drawn from the high of 654.90 to the low of 366.75 indicates that the stock has closed above
the 61.8% mark on the weekly chart suggesting the correction in the counter is probably over. This move is
accompanied by above average set of volumes, re iterating that the stock is being bought into at lower levels making it
an excellent opportunity to enter the stock at current levels.

Adding to the above technical parameter, the price pattern is forming higher highs and higher lows on the daily chart
and is well placed above the major moving averages buoyed by volumes, reiterating our positive stance in the counter.
With the current chart structure and recent correction witnessed in the counter along with the lucrative risk reward
ratio, the stock can be bought to gain from a short term perspective.

An upward slopping support trend line drawn from the low of 374 on the weekly chart is holding as strong support and
has not been negated indicating the upward momentum is likely to continue. On the indicator front the daily RSI is
mirroring the price pattern move and the weekly RSI is on the verge of generating a bullish crossover providing further
technical evidence.
Our take: Going forward, with the current technical set up of the stock, we expect the positive run to continue in the
counter. Therefore, we recommend to „BUY‟ for the target of 600 and then 620 with stop loss placed below 498 for the
month.
3
ValueMax
Stock
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
BPCL
ENERGY
592.65
Buy
568
540
650
685
Key levels
Moving averages
Support
Resistance
21 day EMA
565.10
580
601
50 day EMA
533.9
565
632
200 day EMA
472.16
541
690

BPCL is one of our preferred counter in the oil and gas space The counter has been an outperformer on the monthly
basis and generated more than 1.5 times more returns in comparison to the benchmark Nifty Energy. The stock is
making higher highs and higher lows on daily and weekly charts and also the stock surged nearly 10.50% in the past
one month

The stock is making higher highs and higher lows on all major time frames and also has given breakout from a broad
range of between 480-380 levels and made its all time high of 601.85 which indicates buyers overpowered the sellers
and surged the stock to the higher levels on closing basis.

The stock has given breakout from “BULLISH FLAG PATTERN “near 458 levels and retested the said levels and
made its all time high of 601.85 on daily chart with more than average volume confirmed the pattern significance. The
stock has seen strong buying interest from past two months and outperformed its peer group significantly suggest
strength in the counter.

The Bollinger band (20, 2) is also rising on weekly chart and price is trading above its upper band of the Bollinger band
and there is no sign of any reversal in the stock suggest the strength in the counter. The stock is also trading well
above its 21/50/100/200 day EMA levels on daily charts as well.

Among the indicators, parabolic SAR (Stop & Reverse) in daily charts is trading below the price, suggesting buying will
remain intact with the counter in near term. Among the oscillators front, the 14-week RSI (70.37) and there is no sign
of any reversal this supports our bullish stance in this counter.
Our take: Considering all the above data, we recommend traders to enter the stock at the current levels for targets of 680
and 685 levels and any correction towards 572 can be utilized to average the stock keeping stop loss below 540 levels on
end of the day basis.
4
ValueMax
Stock
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
HINDUNILVR
FMCG
922.55
Buy
885
845
1000
1025
Key levels
Moving averages
Support
Resistance
21 day EMA
906.51
895
950
50 day EMA
891.53
870
980
200 day EMA
859.71
850
1030

HINDUNILVR Ltd. is India‟s largest FMCG Company, with leadership in various categories. In the long term stock
price is in a secular bull trend, with typical behaviour of intermittent price correction after a steady run, eventually
which gives an excellent opportunity to accumulate stock.

The stock price clocked an all time high of 981 in the beginning of March‟15, post which stock entered in to a
prolonged consolidation mode, tested the patience of market participants. Structurally, in the phase of consolidation
stock price retraced almost 50% of move started from the swing low of 537 to an all time high. In the last few months‟
stock formed a higher-high, higher-low in short to medium term price chart, exhibiting revival in the stock movement.
Also month on month basis moreover stock moved in line with NIFTY FMCG Index.

Technically, stock is well poised above its 200 & 50-DEMA and meandering above its 21-DEMA. Notably, during an
entire phase of consolidation 14-period weekly RSI managed to sustain in bullish territory 40-level, and that is also
being supported by price action, where we see more of time consolidation and less of price correction; and currently
RSI is poised to surge towards overbought territory. Also on the weekly time frame chart MACD (12/26/9) has
witnessed Bullish Crossover above signal line, reaffirming underlying strength in the counter.

Based on above technical observations we expect prices to retest it‟s all time high and eventually move in to an
uncharted territory, over the coming month.

Our take: The stock price found support above its 50-DEMA and surging with spurt in volume indicates bullish momentum
is likely to continue over coming sessions, which may take prices higher to retest its life time high and eventually enter into
an uncharted territory over the coming month. Hence one may consider buying stock at current market price and average
the stock price on any dip towards 885 levels for the upside target of 1000 and 1025, placing a stop loss below 845 levels.
5
ValueMax
Stock
INFRATEL
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
TELECOM
395.4
Buy
380
360
435
443
Key levels
Moving averages
Support
Resistance
21 day EMA
364.83
380
443
50 day EMA
636.49
374
435
200 day EMA
374.76
360
420

INFRATEL has been making higher highs and higher lows on the weekly chart and given a downward trend line
breakout on decent volumes suggesting upward movement from the current level.

The stock has moved above its 200 DEMA on the daily charts, breaching its immediate resistance of 410 and moved
higher. There was some correction seen on the last trading sessions from the high indicating good opportunity for
taking position in the stock. Similarly, on weekly chart the stock is trading above 21 DEMA/50 DEMA/ 100 DEMA and
200 DEMA.

On the Bollinger Band set up on weekly chart, the stock has touched its Bollinger band upper band and the band is
widening indicating the volatility has increased and the price action supports the current positive momentum is likely to
continue in the stock.

Among the indicators, the 14-day RSI has reached the overbought zone mirroring the price movement. The Parabolic
SAR on the same time frames is comfortably trading below the price which reflects the buy in the counter will remain
intact in near term.

On the derivative front, rollover in the current expiry is close to its 3 months average with positive price trend. Closure
of around 25% can be seen in the stock merely on the account of profit booking and the upcoming buy back. Further,
fresh longs have been witnessed in the August series suggesting positive momentum to continue.

Our take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the
current levels for targets of 443 and while any correction into the said trading range can be utilized to average the stock
keeping stop loss below the consolidating range of 360.
6
ValueMax
Stock
LICHSGFIN
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
BFSI
520
Buy
495
480
565
580
Key levels
Moving averages
Support
Resistance
21 day EMA
508.18
5005
550
50 day EMA
493.85
495
565
200 day EMA
469.92
480
580

The stock is in uptrend and making higher highs and higher lows on the weekly charts. The stock has made the life
time high of 538 levels and witnessed a profits taking from the said levels after the announcement of Quarter results
on 15 July 2016. The profits taking from the high of 538 levels has placed the counter to the low of 501 levels in span
of three trading session.

Thereafter, the stock has bounced and currently trading in the consolidation range of 510- 524 levels, the bounce
above the said consolidation range will enhance the confidence among the market participants.

The stock has closed the month with the gain of 5.05% and outperformed the Nifty which has closed the months with
the positive return of 4.23%. The stock has given the breakout above the 515 levels on the monthly charts and closed
the months well above the same. The recent development and the breakout on the monthly charts is the fresh trigger
to the stock which suggests the stock is well placed to take it up move.

Among the indicators, the 14-day RSI and MACD line is pointing northwards where the RSI has given the positive
crossover with 9 days signal line on daily charts indicating the strength. Whereas the MACD is trading above the
equilibrium line and trading comfortably in the buy territory which enhance the confidence in the buy side of the stock.

Our take: The above said breakout with supportive volume in the stock is a fresh trigged to the stock which reflects that
the stock is well placed to take it up move. Hence, we recommend buy in the stock keeping stop loss of 480 for the target
of 565- 580 levels.
7
ValueMax
Stock
SUNPHARMA
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
PHARMA
829.95
Buy
790
760
900
930
Key levels
Moving averages
Support
Resistance
21 day EMA
790.83
810
870
50 day EMA
783.76
790
915
200 day EMA
808.31
760
930
th

SUNPHARMA is the World‟s 5 largest specialty generic pharmaceutical company and one of our preferred counter
from the pharma space. The stock has outperformed NIFTYPHARM during the last month and has generated 8.76%
return whereas the NIFTYPHARM closed with a positive return of 4.98%. Currently the stock is trading well above its
21/50/100/200 DEMA levels on daily chart as well as on weekly chart exhibiting strength in the counter in all time
frame.

The stock has seen significant bounce towards 839.80 levels after making low of 710.15 levels on 07 June 2016,
which is nearly 18% reflecting uptrend in the stock will remain intact in near term. The bounce from the above said
level has taken support of lower band of Bollinger band on weekly chart. Currently the stock is trading above mean
price and the price action heading towards the upper band of the Bollinger band, support our bullish view in the
counter.

Among the indicators and oscillators, the 14-day RSI is trading above its 9-day signal line and is pointing northwards,
clearly indicating the bullish trend in the stock is likely to continue and the counter is expected to head higher in the
near term. The Parabolic SAR (Stop & Reverse) is placed well below the price on daily chart, suggesting buying will
remain intact in the counter in near term.

From the above observations it is evident that stock is likely to surge higher and outperformed its peers in coming
trading weeks and heading towards the mention targets.
th
Our take: The recent price action suggests that the positive momentum in the stock is likely to continue in the coming
trading sessions as well. Hence, we recommend buying the stock for target of 900-930 levels in the near term keeping
stop loss of 760 levels.
8
ValueMax
Stock
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
TATASTEEL
METAL
355.05
Buy
332
320
390
405
Key levels
Moving averages
Support
Resistance
21 day EMA
351.97
340
370
50 day EMA
340.53
332
390
200 day EMA
309.42
320
405

TATASTEEL is one of our preferred counters from the metal space. The stock has bounced back from the lows of
around 200 levels and since then is in the cycle of higher highs and higher lows. The stock is expected to trade higher
in the coming sessions towards 390-405 levels. The stock surged more than 10% during the last month.

On the weekly chart, the stock has witnessed a “Cup & Handle” pattern breakout which was well supported by robust
volumes suggesting strength in the counter to continue. Also, in the last trading week the stock has retested its
neckline making an opportunity for investors to buy the stock at lower levels for greater returns. On the oscillator front,
the 14 day RSI is trading around 60 levels supporting the bullish stance in the counter.

On the daily chart, the stock is placed well above the unfilled gap which was made on 13 July 2016, around 343-345
levels and is also placed above most of its major moving averages indicating inherent strength. On the other hand, the
stock is placed at the mean of the Bollinger (20,2) placed at 350 levels on the daily chart suggesting it to be a strong
support for the stock and also affirming our bullish stance on the counter from short to medium term perspective.

On the derivatives front, rollover in the current expiry is close to its 3 months average with positive price trend. Closure
of more 20% can be seen in the stock merely on the account of profit booking.
th
Our take: The recent price action suggests that the momentum in the stock is likely to continue and the counter is
expected to trade higher in the coming sessions. Thus, we recommend buying the stock for the targets of 390-405 levels
and add further on any dip towards 332 levels keeping a stop loss placed below 320 levels.
9
ValueMax
Stock
TCS
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
IT
2619.3
Buy
2505
2400
2835
2920
Key levels
Moving averages
Support
Resistance
21 day EMA
2534.08
2550
2680
50 day EMA
2526.83
2505
2835
200 day EMA
2485.50
2400
2920

TCS has been one of the outperformer in the overall IT pack after it declared better than expected quarterly results in
comparison with its large cap peers. The stock has been trading with positive bias since then even in the volatile
market conditions. The stock has taken support around 2400-2420 levels which was its pervious swing low made in
the month of April 2016 and continued its northward journey in the last month.

On the daily charts, the counter has been forming higher highs and higher lows from past few trading sessions and is
on the verge of giving sloping trend line breakout above 2630-2650 levels drawn from the all time high levels of
2839.70.On the other hand, the stock is also rolling on the upper band of the Bollinger indicating the positive
momentum in the counter is likely to continue in the near term.

On the weekly time frame chart, the stock is looking bullish and has formed two long bullish candles with good trading
volumes indicating strong hands has started picking the counter around lower levels.

Among the indicators, parabolic SAR 14 day RSI is trading in the comfortable zone suggesting positive sentiment in
the counter. Even the stock is trading well above its major short to medium term moving average indicating inherent
strength.

On the other hand, we expect the counter to continue its upwards momentum in the coming weeks as well and may
enter the uncharted territory surpassing its all time high levels. We also expect the stock to outperform its peers in the
coming trading month on grounds of good earnings in the last quarter.
Our take: On the basis of the above mentioned technical data, the counter is looking bullish for the time frame of 3-4

weeks and may test 2835-2920 levels. On the other hand, any dips towards 2505 levels may be an excellent opportunity
for the short to medium term traders to average the stock keeping strict stop loss at 2400 levels.
10
ValueMax
Stock
ULTRACEMCO
Sector
CMP
Action
Average
SL
Tgt 1
Tgt 2
CEMENT
3718.2
Buy
3500
3395
4095
4200
Key levels
Moving averages
Support
Resistance
21 day EMA
3546.91
3400
3860
50 day EMA
3421.77
3200
4100
200 day EMA
3134.55
3070
4250

UltraTech Cement Limited is India's biggest cement company and India‟s largest exporter of cement clinker based
in Mumbai, India. The company is part of the Aditya Birla Group and division of Grasim Industries. It has an annual
capacity of 64 million tonnes. The export markets span countries around the Indian Ocean, Africa, Europe and
the Middle East. The stock has outperformed NIFTY during the last week and has generated 2.16% return whereas
the NIFTY was up by 1.14%.

UltraTech Cement has moved higher to its new high at Rs 3,739, up 2.6% on the National Stock Exchange (NSE) in
otherwise subdued market, after it announced that it won two coal linkages from Dipka Mines (SCDG) in Chhattisgarh
after participating in the auction of coal linkages.

Currently the stock is an uptrend and trading well above its 21/50/100/200 DEMA levels on daily chart as well as on
weekly chart exhibiting strength in the counter in all time frame.

Among the indicators and oscillators, the 14-day RSI has already given a positive crossover with 9-day signal line and
is pointing northwards, clearly indicating the bullish trend in the stock is likely to continue and the counter is expected
to head higher in the near term. 60 day CCI is plotting well above the 100 levels at 187 and 30-day MFI is plotting at
75 levels indicating the bulls are active in the stock. The Parabolic SAR (Stop & Reverse) is placed well below the
price on daily chart, suggesting buying will remain intact in the counter in near term.
Our take: From the above observations it is evident that stock is likely to surge higher and outperformed its peers in
coming trading weeks and move towards its resistance levels over coming month. Therefore one may consider buying at
current levels and average the stock price on any dip towards 3500 levels for the upside target of 4095 and 4200 over
coming month, keeping stop loss below 3395 levels.
11
ValueMax
KARVY RESEARCH DESK – STOCK BROKING
JK Jain
Head Research
QUERIES & FEEDBACK
Toll-Free: 1800 419 8283
Email ID: [email protected]
Karvy Stock Broking Limited
“Karvy Centre”, Avenue-4, 2nd Floor, Road No: 10, Banjara Hills, Hyderabad – 500 034. India.
Tel: 91-40-23312454; Fax: 91-40-23311968
.
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accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly
related to the specific recommendation(s) or views contained in this research report.
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company for any other assignment in the past twelve months.
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rendered as Registrar and Share Transfer Agent, Commodity Broker, Currency and forex broker, merchant banker and underwriter, Investment Advisory
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12
ValueMax

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13