Trade Setup: 26 August 2021

Trade Setup: 26 August 2021

[Music] good morning welcome to the trade setup right here on bloomberg queen live i think we got um some glitch in the earlier one but this is now we’re going live with the trade setup so good morning and um it it appears to be a fairly placid day for the world markets at large nothing uh major happening in either direction first what the us markets did overnight precious little again um required as she goes and i think but you can argue they needed record eyes but it’s a very quiet day i think the futures as of now are pointing towards a quiet start as well now something that got our attention and i tweeted about it earlier any which ways but look at this chart it shows how for the last 10 months now the snp 500 has not had a very sharp drawdown five percent pullback that’s what the chart is saying so in in the period of 2016 to 18 so for a better part of 2017 it was a less volatile world not a single five percent pullback uh for 20 months now uh it gets extended to about 10 months so it’s not as long as the previous one but 10 months is a really long time without having a big large pullback now this is what boys people into thinking that oh a pullback is around the corner hey guys what if it gets extended the way it did in 2017 uh who knows yeah i i think that the point that vegas kmari was making it was making from an indian concept on text but everybody expects this 10 drawdown what if that ten percent drawdown doesn’t happen in sixteen thousand five what happens at seventeen thousand five hundred who knows right you could argue you could smoke you could scoff at it but from fifteen thousand odd levels i’ve been waiting and i’ve been hearing about this pullback news it doesn’t really happen anyways let’s wait and watch um asia today again i would reckon that would be very very quiet so no big move big moves uh well even even the cosp which is corrected about half a percent has not really had a big move remember south of south korea did raise uh interest rates uh it it’s now become the first major asian economy to hike rates now that is why the conversation around whether a rate hike in india also is coming soon or other than later will get very very low and naturally so there’ll be a courageous earlier it was what norway new zealand and some of the other central bank select central bank state now korea gets added to that list and therefore the quotas for oh what if the rate hikes happen will become louder but let’s wait and watch i think again out here the chorus has been very loud for a long time it hasn’t happened till date so let’s wait and watch uh sx nifty would probably indicate a start which is flattish yeah but twenty three odd points in the red it could well be in the green but a flat is not anticipated i frankly believe that that’s frankly the order of the day uh so let’s first get the trade setup up and out and then we’ll probably try and have a look at some individual charts too so fun i mean i personally believe that markets will unlike unlikely that it’ll make any dramatic moves out of the jacksonville frankly for the snp final two viewers yesterday was the uh in terms of volumes the second lowest day in the last five years that tells you how quiet the markets are ahead of jackson hole uh when when looks at our own markets and considering that we are now expiring the the market wide rollovers were higher than averages 77 percent if i’m not wrong was the 75 but the tech rollovers were definitely higher than anticipated or higher than average is sorry not anticipated higher than averages which shows that people are comfortable rolling over the long positions in technology to the next series so some confidence out there and i think yesterday there was some bit of tinkering with sugar the frp increase happened a lot of people thought oh is that the death nail frankly such a measly uptick in in the in the frp any which ways so it’s it’s in line with expectations it’s not a negative surprise to my mind other than that something that i’ve tried to do today it may not happen every time but oil and gas had a bunch of news so i just tried to bunch them up together into what would be the oil and gas pointers to be monitored today so demand for atf apparently is moved up higher and therefore i reckon that the price surge might also happen uh because of pickup in tourism uh in india so the aviation turbine fuel has has er has inched up higher because of india tourism demands that is part one oil has steady today after a three day move u.s stockpiles have fallen and i think a bunch of very smart money managers are now bracing themselves for a revision in gas prices uh and therefore they’re doing long positions in upstream oil you sought some bit of positioning there in all india now this may well fizzle out too but keep in mind if the price i price hikes or the price divisions are ogc says maybe 60 some people say about 100 percent if they’re between 16 and 80 percent that’s a significant bump up in prices and therefore earnings for upstream gas providers ongc is the mothership really in terms of gas production all in is a much smaller plate but as a proportion gas could be interesting for them as well so do watch out for some of these oil and gas related pointers um yesterday a bunch of stocks moved uh in the market but it was okay ho-hum really but you got to watch out for what’s happening within pharmaceuticals uh because that was the pocket that was active in trade yesterday as well we had a bunch of these city gas distributors being active too in trade yesterday so those are the nature of the stocks that were okay yeah the mov function now as i said the one client ratio fairly decent and if you just look at the set of winners all over the place right when keys went up suddenly great eastern shipping went up suddenly general insurance getting new idea insurance about seven percent but a mixed bag as you see on the gaining side on the losing side again um haven’t because of that note from bofa corrected about five percent canada bank post qip three percent rj’s name didn’t do anything to it in devil’s real estate connected about three percent so a mixed bag of trade you never know which way it would turn up in the session today some stocks that you should keep in mind party it will firmly in focus the announcement yesterday was a bit of a surprise to most people most intelligent minds let me put it that way they’ve said that there is a board meet on august 29th to consider capital raising options via equity or equity linked and or debt instruments is a big surprise now um why could this be happening could it be for 5g could it be for getting ammo for v and acquiring more customers from v or vodafone or could it be in this and i think all possibilities out there all nature of instruments out there and whether it is used for dead refinancing that is also out there now who’s to assume i don’t know but we thought the jeffries not summed it up very well so here’s what jefferies is saying when it comes to the party at an announcement and they too are expressing it as a bit of a surprise that they’re saying that the capital raising announcement has come as a bit of a surprise uh now it may to enhance capacity and anticipation of large market ships from vie of v and that should be seen positively according to them any state bought in the stars may be seen negative keep this at the back of your mind this template at the back of your mind of course they will just do dead refinancing is what somebody else also told me so you never know um for a stock that was supposed to do really well and i usually see this happening with airtel 625 630 tends to hit a bit of a air pocket and then mounts back this is what’s happened this time around as well maybe this announcement could be taken negatively do watch out for the stock today uh palm oil prices are in focus they are at record highs and therefore a bunch of these companies would be in focus maricopa gets impacted negatively and they’d mention in the interview as well that they believe that the palm oil prices have bottomed out clearly for now they don’t seem to be doing that uh britannia is the other one which is in focus again gets impacted negatively aggro it gets impacted positive reviewers but in the con call they said that the entire benefit of this palm oil price uptick doesn’t get uh reflected in their books because some of it gets eaten up some higher taxes what have you so if you are going naked long godrich aggravate logically you should but uh the results and the con call summary suggests that it doesn’t quite play out that way so please be intelligent if you’re going out and either shorting a mavic or going long and angry it may not necessarily play as per script but these are the companies that usually get impacted because of higher palm oil prices now png hygiene and healthcare the numbers were a bit disappointing viewers the revenue numbers were very strong up 24 much higher than estimates but evita recurring back all significantly below estimates gross margins were okay but every margins were very poor um recurring battles are very poor and both note out there is decent i think it sums it up well i’m bringing this up because it’s the only result that has come out today or rather overnight and naturally so because the result season is over so booty also says that while valuations at 44 times are in line with stable peers it has a stronger top line in earnings track record best of breed structural earnings growth potential and of course maybe rose that will improve so they maintain the buy rating with the target price of 15 530 targets about 50 times september 23 eps if you believe in this maybe you want to go out and buy it’s a very stable company by the way much uh more like how in the typical fmcg names are they don’t necessarily move the rate off or not so to say so quite maybe for png but the numbers certainly below estimates if it reacts negatively i think the doubt will have a big negative reaction but if it does you know why um the interesting one is the kochintan pharma the cfo resign yesterday one would have thought that maybe there was some reaction yesterday but that pharma was in the green yesterday but today the anchor book lock-in opens we know what happened to zomato could the same happen to that chinton i don’t know people are sitting on things so you might well see the stock uh see some intense selling pressure today i don’t know if it will happen or not maybe the anchor investors don’t want to sell so matter was a different kettle of fish i have no idea really who knows by the way right who knows but yeah it says it’s a stock to keep in mind if it starts reacting negatively you know that there’s some bit of selling pressure look at the volumes look at the kind of pattern that happens today uh you will get the answer so that’s one more interesting name and i just thought one brokerage call was was was pretty good and i wanted to bring it out to you there was also a call on gujarat gas but i’m leaving that out because that didn’t matter uh as much if you will right so gujarat guys we’ve spoken about it yesterday as well on the city not remember uh that city is bought on gujarat cash so that was interesting but have a look at the note on old tasks so jeffries has come out of the note on old tasks and they are saying and i quote that buy and the target price has been raised to 1200 rupees uh they said that voltas has announced the world bank jv uh within a large outlay uh and it will be viewed as a material value creator only over four to five years and now believe are close to the turning point their estimates factor world or world back reaching pvd break even by a 525 they raise their 520 to 24 eps by two to five percent to reflect their use losses it’s not a near-term trigger but they they’ve rated a y and the target price has been raised to 1200 do watch out for world tasks today lastly what stood out for me was the massive collections on the nfo by sbi mutual fund the balance advantage fund closed yesterday they collected 12 000 crores in their fun retail is active and how of course the balance advantage fund balances between equity and debt but no doubt a large portion of this money will be deployed in equities boy i tell you indian retail is very very active maybe that’s good news nevertheless some viewers thanks so much for tuning in today stay safe watch out if the fnx party dates it’s a bit of a high risk zone if you are trading uh futures on the index so please be careful and if you’re stepping out be even more careful and stay master [Music] you
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Trade Setup: 26 August 2021

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