Trade Setup | Indices still seen as constructive; dips, if any, could be bought into. #BQLive
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00:00 Good morning and thanks so much for tuning into the Trade Setup. I'm Neelak Shah. Let's take stock
00:03 of the global news flow first. Asian markets are mirroring Wall Street's rally on a day of
00:08 Australia's July inflation numbers. So that's actually good news. Bitcoin and crypto stocks
00:14 have jumped after US court paves way for an ETF sharp up move there. Bitcoin in particular,
00:21 but all crypto stocks, all kinds of crypto stocks have moved higher. India's cumulative
00:25 monsoon rate fall 9% below normal as of August 29. This is a bit of a worry, particularly for
00:32 most monsoon related stocks, including FMCG. No wonder FMCG index was a bit soft in trade
00:39 yesterday. And Apple has set September 12th date for launch of the iPhone 15 as well as new watches.
00:46 These are now events unto themselves across the world, and I'm sure this time around
00:52 in India as well. Two Apple stores or maybe slightly more will be interesting to see what
00:58 happens there too. OK, now first, what happened to the US markets? Like I said, Asian markets are
01:05 mirroring Wall Street's rally, but Wall Street, we didn't have a thunderous rally, but 1.74%
01:10 for the Nasdaq, which is very strong. Suddenly people say that, hey, maybe the Fed will not make
01:15 a move. And that brings about a bit of a rally. Treasury is inched up as well. So yields would
01:20 have slid a little bit more. Let's bring them up. I haven't looked at the numbers, but I'm
01:23 presuming they'll be lower. 4.12 versus 4.18 at this time yesterday or as of 7.30 a.m. yesterday.
01:30 So definitely a pullback out there. Steady for the dollar index, steady for the VIX. So no big
01:35 changes there. The GIFT Nifty, well, you know, usually it indicates a flat start and then it
01:40 does something else. So I don't know if this is a real lead indicator, but let's wait and watch
01:44 how the markets behave. I suspect that it's probably a decent outing that we have in our hand
01:51 today. And well, it wasn't a great move, but it was a mildly positive move yesterday, 1.19%.
01:58 So you could argue it is a flattish move for the Nifty and the Bank Nifty for sure was very flat,
02:03 despite the fact that HDFC Bank was a gainer two days on a trot. But flattish moves for the last
02:09 couple of days, at least for the Bank Nifty, the Nifty has gained a little bit more. Broader
02:13 indices ended positive yesterday. Mid cap was up 0.3%, small cap index, but 0.54%. And that was
02:20 because of the fact that Nifty real estate has a big move. So mid caps and small caps, no large
02:25 cap representation per se right there in the strictest scheme of things, maybe say for DLF or
02:30 gold-rich properties. And, you know, Nifty really gained the most, followed by Nifty Metal, which
02:36 was up yesterday. And we are hearing all sorts of conversations around metal companies having
02:40 raised prices, cement companies having raised prices, chemical prices moving up. It's looking
02:45 very interesting. And therefore the trade setup, I mean, you know, there's Nifty closing marginally
02:52 above its 50-day moving average with metal and real estate stocks outperforming is actually a
02:56 positive sign. Indices, to my mind, are still seen as constructive and dips can equally be bought
03:03 into. Remember, all of the last few years, like a broken record, we've been saying that don't go
03:07 leverage short on the markets. It's not a great idea. And that's the reason because indices are
03:14 still seen to my mind as constructive. Beat-down sectors are starting to see traction selectively,
03:20 bringing focus on valuations. Now, why do I say that? Like I said yesterday, suddenly everybody
03:25 is talking about what's happening to chemicals, which have not done anything for the last few
03:29 months or quarters, if you will. Look at the kind of price volume action seen in some of these
03:35 stocks. Deepak Nitride up 6.5% with 7.6 times the volumes. RT Industries 5%, nearly 5%,
03:42 nearly 5 times the volume. Atul 4% higher, 3.5 times the volumes of the two-week average. Just
03:49 shows the kind of traction that is coming in into some of the pockets which had not moved at all.
03:54 You know, yesterday we were speaking to Pankaj Tibrewal of Kotak. He mentioned this that,
04:00 you know, over the next six months, you will see IT sometime in December starting to be lapped up.
04:06 They have bought into it selectively and they spoke that chemicals is a space that we had not
04:10 spoken in the conversation yesterday, but it was an important one to look at. I've heard two or
04:15 three people, including Mihai Vora of Max, Pankaj Tibrewal of Kotak. And I think I'll do this
04:21 conversation with Pankaj Burakh of Renaissance Investment Managers today as well. What to do
04:26 with chemicals now, but they're certainly starting to make a move. Yesterday, there was a Bakliwala
04:30 and Karani sales note which spoke about how phenol prices have risen and that might be
04:35 all going well for Deepak Nitride as well as a result of which the kind of move that these stocks
04:40 made. So, but be careful, you know, unless you understand these commodity chemicals space well,
04:46 and some of these have a larger proportion of commodity chemicals as well, in addition to the
04:50 speciality chemicals that they produce. So just be careful of, if you're trading them,
04:55 from an investment perspective, you know, most people say that the chemical stocks have done
04:59 so precious little in the last 12 to 18 months, while earnings have in certain cases caught up,
05:04 that you might see some bit of an uptick there. But if you're trading them, please be careful,
05:08 because you, unless you have a complete handle on how the movement in the chemicals impact the
05:15 underlying stocks as well. But strong moves yesterday in some of these. And in some cases,
05:19 like I said, with Deepak Nitride, there was a reason for that to happen, possibly because of
05:24 phenol prices inching up, which is such a large proportion of the business now, that there was
05:28 valid reason, but just be careful with chemicals per se in general. Then Zomato, SVF Growth offers
05:35 about 100 million Zomato shares in multiple blocks, floor prices set at about 94 rupees a piece.
05:40 They seek 114 million, this could largely, I reckon this could be amongst the last of the
05:47 blocks. So do watch out for Zomato. The floor price also is at 94, which is not too much further
05:53 down from the current market price. If absorbed, you could see some upsides today in Zomato. If
05:58 absorbed well, I suspect that it will be absorbed well. These stocks are in a bit of a frenzy of
06:02 late, and maybe with reason. Jupiter Wagons, remember the wagon stocks have been smashed
06:08 in the last couple of days. On Monday, we had spoken about how the monthly wagon data was not
06:12 too promising. Two days on a trot now, TDAG has gone down, Jupiter has gone down yesterday,
06:18 Texmaco, which had gained 11% the previous day, has gone down as well. Now, Jupiter Wagons is
06:22 saying that there's a board meet on September 5th, six days from now, for considering a proposal for
06:28 raising funds through the QIP route. Does this give a bit of a floor and a bit of a spurt to the
06:33 stock? Maybe it could. So keep a keen eye out for that. Zee might be in focus today, Sackville here,
06:39 going as a field against SEBI's confirmatory order on Wednesday. Don't know which way the order could
06:43 come out and what it will do, but watch out for Zee. Watch out for GR Infra projects, subsidiaries
06:48 execute concession agreement with NHEI for two projects in Karnataka worth a total of 1.457
06:53 crores. Do watch out for this one. We know that the promoter Rahul Gupta sold 15 lakh shares in
07:00 APL Apollo tubes. Would they want to sell more? Who knows? But in Amir Organics case, there is
07:05 some more data out here. So a gentleman called Girish Kumar Chowdhury sold about 6.2% shares,
07:10 6.2 lakh shares, sorry, 1.7%. And Morgan Stanley bought that. The key is, is there more supply in
07:17 store? Well, Mr. Chowdhury had about 25.95 lakh shares as of June 2023. He had reduced it from
07:26 8.5% in March to 7.12%. Now, assuming that nothing's happened since then, 1.7% gone,
07:33 which means that there's some more stake that Mr. Chowdhury has and therefore that pressure on Amir
07:37 Organics, who knows, might stay as well. It's a business which is doing really well from the
07:43 looks of things and from what I read from brokerage notes. The question is, can this
07:47 technical factor remain in overhang on the stock? Maybe it could. So keep an eye out for that as
07:54 well. Now, some brokerage notes, if you will, let me see what have I missed out on. Give me a minute
08:03 just to, if I not sorted. So yeah, there is some talk of Zomato or HSBC having raised
08:17 the target prices on Zomato. So that is certainly to be watched out for. On SBI cards,
08:27 there is a Morgan Stanley note with an overweight rating. We're at a target price of
08:33 1155. In July 2023, credit card statistics plus the high frequency August 2023 data
08:42 makes Morgan Stanley constructive on SBI cards. Like I said, the target price is 1155,
08:50 which means that there is a 40% upside to the current market price as per Morgan Stanley. So
08:57 do watch out for that as well. And just trying to get that note from HSBC. HSBC has a buy rating
09:11 with a target price of 120, has been raised to 120 from 102 rupees per share. So keep that in
09:18 mind. Citi on Pyramal Enterprises has downgraded the stock to a sell. The target price has been
09:24 cut to 1010. So that's the other one to watch out for. There's two or three names to be kept in mind.
09:33 Be mindful of that. Motihab Asal has a note on Z, by the way. Target price is 320. So do watch
09:42 out for that as well. That's the long and short of the trade setup today. Like I said, Pankaj
09:48 Murarka of Renaissance would be here. We'll talk to him in detail about the chemical sector for
09:52 sure, because that's starting to make some waves. So that's one conversation for sure. There is BLS
09:57 International, which has posted decent numbers and the growth outlook is promising. So the
10:02 management joins in at 130, Shikhar Agarwal and normal conversations on Trick Talk with Vivek
10:08 Karwa and Rajesh Balvia. And to everybody, and of course, the Mutual Fund Show, Bharat Panig of
10:14 ICICI Securities and Prabhdeep Bajpai of FinFix joining on the Mutual Fund Show today to talk
10:20 about the state of NFOs and sectors from which new offerings are coming in and what to do with
10:27 some of those. So that's an interesting, that promises to be an interesting conversation as
10:31 well. To everybody in India, wishing you a very happy Rakshabandhan and thanks so much for tuning
10:38 in to the trade setup today.
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