Highest Call & Put OI At 19,400 Strike | Trade Setup: September 1
Trade Setup | Incessant FII selling likely to keep #BankNifty subdued. #BQLive
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00:00 Good morning and thanks so much for tuning into The Trade Setup. It's Friday morning.
00:04 I'm Eijat Shah. Let's take stock of what the world markets did and the global news
00:08 flow thereof. So first, the US stocks, they had a, well, if you genuinely look at it,
00:14 first the global news flow, Asian stocks are mixed and the US futures are trading flat.
00:18 Oil is headed for a solid weekly gain as Russia is going to extend the export cuts. Brent,
00:24 as the last time I saw, which is about 7.30, was at 86-87 dollars per barrel. China is
00:30 going to cut the forex reserve or has cut the forex reserve requirement ratio by 2 percentage
00:35 points. And India's GDP growth accelerates to 7.8% in Q1 FY24. Yes, there are headwinds
00:42 ahead, but Q1 has been a pleasant surprise for sure. Now, the markets, the US markets
00:48 will first come up on your screen and let's look at what they did in the session overnight.
00:53 So about half a percent down for the Dow and the Nasdaq, about 0.11% higher in trade. So
01:00 a bit of a mixed day, but skittish, if you will, flattish, maybe with a bit of negative
01:04 bias and the futures were trading in the red, are trading flat, excuse me. The other cues,
01:10 no big changes there, almost equal to what they did, I mean, have been over the last
01:15 two or three sessions. The Gift Nifty might again be showing a flat start, but frankly,
01:19 this Gift Nifty start indication has become a bit meaningless, if you will. Let's see
01:24 what happens during the course of the day. Like, for example, yesterday, no one could
01:28 have anticipated looking at the Gift Nifty as to what the day will look like. And the
01:33 day didn't look all that great. If you just look at what happened overnight or rather
01:37 what happened in the session yesterday, the Nifty was down about 0.94% or 94 points, actually
01:46 about 4-8% in the session. The Bank Nifty decreased by about 0.55% to close at 4,399,
01:53 essentially half a percent downtick led by Bank of Baroda and State Bank of India. The
01:57 Nifty mid-cap and red-dog and small-cap stayed steady. And yesterday, I put up a data point
02:03 which spoke for how the last one month or the last two months as well, if you look at
02:07 the Nifty versus what the broader end of the spectrum has done, which is the mid-caps and
02:11 the small-caps, is a sea change. So don't get caught by looking at what the index is
02:16 doing. It's been rather flat for the last two months. But there's a lot of activity
02:21 happening at the broader end of the spectrum. And the small-cap index with this move has
02:25 now only widened that performance. Thank you, Virat, for pulling this up. This is the point
02:30 I was making. Look at the two-month performance as of yesterday. The Nifty was down about
02:35 0.82%, but the small-cap index was up 13%. The mid-cap index was up 8.5%. And the Nifty
02:41 at some point of time, this will reverse, right? I mean, I've heard now experts talk
02:46 about this for the last maybe 20 days that they're negative on the small-caps and the
02:51 mid-caps to an extent, and they're constructive on the large-caps. But hey, one of the notes
02:57 said this probably mid, not even mid-August, at the start of August. And in the next 25
03:04 days, the performance has even gotten more skewed. So at some point of time, it will
03:09 reverse. But come on, the party's on right now at the broader end of the spectrum, right?
03:13 And fund managers and PMS managers that I meet or I talk to on record, off record, all
03:17 talk about the fact that the broader end of the spectrum is where they are hunting for
03:22 ideas. They're not necessarily present at the large-cap end of the spectrum. Now, these
03:27 might be the famous last words. I hope not. And who knows, the mid-cap might start correcting
03:32 starting today. But for now, they've done really well. So the broader end of the spectrum
03:38 did well. And real estate index, yet again, third day on a trot now, up 0.65%. Nifty IT
03:43 yesterday contributed, which is a good sign too. But mid-cap index really contributed.
03:49 Frankly, if you look at the price volume buzzers of yesterday's session, a clutch of mid-cap
03:54 names, persistent 3.5%, liquid name up 3.7%, with two times the volume. Billasaw, two times
04:02 the average volumes up 3.5%. I mean, the stuff like MCAX, IDFC, First Bank, Hindustan Copper
04:07 also did well, but IT was certainly present there. So what's the trade set up? I mean,
04:15 if you look at the call in the putto eye, wedged at 19,400, just at that range. The
04:20 highest call in putto eye is at 19,400, the same strike, showing the tight wedge that
04:24 the index is in. And the incessant FI selling is likely to keep the bank nifty subdued to
04:28 my mind. And again, for today's session, this might not hold true because we're seeing selling
04:34 at high levels and buying at lower levels. We are close to the lower levels. You never
04:38 know, there might be a bit of a buying that could happen in the session today. Real estate
04:42 though is seeing strength. I don't know if it's an uptrend, because if you look at from
04:47 the March lows, the nifty realty index has outperformed the nifty massively. So could
04:52 that change? Remains to be seen. But individual companies, common free, all looking very,
04:58 very solid in that bucket. So let's wait and watch. Now, stocks to watch in the session
05:03 today before I get to individual names viewers. Watch out for Five Star Finance. Other media
05:08 have reports point out that there could be a bulk deal today, a large one at that, at
05:12 a slight discount. So if the season of bulk deals continues or block deals continues,
05:18 I didn't mean bulk, I mean a block. So that may happen and that may impact the stock today.
05:22 So watch out for Five Star Finance. Then Jet Airways, it's a BQ exclusive. SBLL lenders
05:28 to Jet Airways receive 100 crores from the Jalan Kalrock consortium. This could be, well,
05:35 I mean, it's difficult to call what could the stock do per se. I don't track Jet Airways
05:39 at all. It's an airline, yes, but without too much of an ops to talk about. But it's
05:47 seeing some bit of revival. It's great for customers, by the way, to have more options
05:51 because otherwise currently it's all dominated by one airline and a few other shorts by maybe
05:57 Air India or an Akasa, but it's Indigo all the way. I was in Bengaluru and I took a photograph
06:03 of the notice board out there which said what flights are at what time. Eight out of the
06:08 10 flights on that board were all Indigo flights. So I'm very happy as a consumer to see more
06:15 airlines coming in. Hopefully Jet Airways sees some revival. It was a brilliant airline
06:19 in its peak. I'm not saying it'll go back to that, but it'll be interesting to see if
06:23 this indeed leads to a revival of Jet Airways. More from a consumer perspective, but maybe
06:27 the stock also has some impact to it.
06:29 ITD Cementation will certainly have an impact. The company's backed a Marine contract worth
06:33 3,290 crore rupees. So watch out for ITD Cementation today. I reckon we'll start off a gap up.
06:39 Genius Power will probably start off a gap up. That stock has done really well, by the
06:43 way, really, really well. But its subsidiaries received an LOA for an additional 2,247 crore
06:48 rupees order for appointment of advanced metering infrastructure service providers. This one
06:54 continues to bag orders. Left, right, center, the book to bill ratio, very, very solid.
06:59 Hopefully we're going to talk to the management today. We placed a test. Let's see if they
07:04 are talking to media, they'll talk to us. It'll be interesting to see what this means
07:08 for them.
07:09 Shakti Pumps. Yesterday they announced an order. I don't know if it's the same one, but yesterday
07:14 they announced an order doing market hours. The stock has been really active the last
07:17 few days. And the company says that I think post-market hours, the official announcement
07:21 received an order from Haryana Renewable Energy Department as well. So let's see if there's
07:26 some more steam or some more Shakti for Shakti Pumps. Excuse for that corny joke.
07:33 Balajiya means it intrigued me when they postponed the results saying that they are busy with
07:39 the IPO of the subsidiary. It was a lame reason the stock got punished. Now the numbers have
07:43 come out with such a lag and the numbers are looking very wobbly. Revenues down 30 percent,
07:49 EBITDA down 54, margins at 21 versus 32, net profit down 57 percent. It is not a great
07:57 quarter and independent of what the stock may have done in the recent past, I do think
08:01 there will be some reaction and negative reaction today. So watch out for Balajiya means.
08:07 TV18, Network18. Network18, I mean TV18 also holds a very small stake in YFOM18 now, but
08:14 it does. And both those businesses may benefit from sentimentally and even from a business
08:20 perspective maybe. But YFOM18 has banned both the TV and digital rights for Indian cricket
08:25 teams. I think home series for the next five years with a cumulative bid of approximately
08:29 6000 crores. Now, you know, again, from a consumer perspective, we're so used to seeing
08:35 Star and Sony dominate this that there is now a firm new third player in the fray. They
08:44 anyways hold the IPL rights and the rights for the women T20 league. Now, Indian cricket
08:53 teams home series will be on Sports18. Certainly a formidable bouquet that YFOM18 and Network18
09:00 and TV18 now have within them. So watch out. Maybe there could be a bit of a reaction into
09:05 these stocks. Sula Binyaj yesterday had seen a large deal now amongst other buyers. HDFC
09:11 Mutual Fund seriously bought into it. Through its three funds, it's bought a combined 35.2
09:17 lakh shares or 4.2% stake in Sula. Boy, is somebody convinced about the prospects of
09:22 this one? HDFC Mutual Fund certainly is. I faintly remember vaguely remember Andrew Holland
09:28 being constructive on Sula as well. A lovely talk to him today as he joins us on Talking
09:32 Point to talk, I mean, not about Sula, really about markets per se. But I will invoke this
09:39 question about Sula Binyaj as well. I don't know if he'll be able to answer stock specific,
09:43 but no, I'm trying to get that perspective from him. Do tune in for Talking Point today.
09:47 It could be an interesting conversation. Still runs the largest CAF, I believe. So would
09:54 be interesting to see what Andrew has to say. Just before we wrap up, though, some brokerage
09:57 calls. I think Emami has been raised to a buy at Citi. So do watch out for that one.
10:07 Just trying to see what else in terms of brokerage calls or something that I have missed out.
10:20 So, okay. Ethos. There's a board meet today to raise funds. Watch out for that one. Incred
10:31 has come out with a note on BCL Industries, a high conviction buy with the target price
10:34 of 925. Jeffries on property, residential property markets. They of course talking about
10:41 how DLF is the preferred pick for them. So do watch out for each of those as well. Anything
10:47 else that I have missed? No, largely, largely these names. Let's see how it goes. Great.
10:58 Have a great day, everyone. Thank you so much for tuning into the Trade Setup. Have a great
11:04 weekend too. And do join in for Talking Point and a few other shows at 8.30. My colleagues,
11:09 Alex and Hiral will be talking to Jonathan Barat on the group price uptick as well as
11:14 some key stocks in news. So you are on for that as well. Have a great weekend.
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