- Where will #FinNifty close today on its weekly options expiry?
- Strong debut for #BLS e-Services. What's next?
Take stock of the derivative markets with Agam Vakil and Samina Nalwala on 'The F&O Show'. #NDTVProfitLive
- Strong debut for #BLS e-Services. What's next?
Take stock of the derivative markets with Agam Vakil and Samina Nalwala on 'The F&O Show'. #NDTVProfitLive
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TVTranscript
00:00 These stocks, metals come out as a top loser dragged by AP and Apollo.
00:04 And Paytm is up almost 6% after hitting lower circle in the last three sessions.
00:11 Meanwhile, Jio Financial Services denies reports of buying Paytm's wallet business.
00:15 And shares of Balpi et al trail over 2% higher on back of strong earnings.
00:21 Citi reiterates a buy call with an increased target price of 1270.
00:28 Prime Minister Narendra Modi kicks off poll campaign says BJP will get 370 and India 400
00:35 seats in the upcoming Lok Sabha elections.
00:54 Hello and welcome. This is Samina Narwala and you are watching the FNL show where we take you
00:58 through all the derivative action in the markets. But first up a quick check on how the benchmark
01:03 is trading. It's a flat sideways day of trade on the Nifty and the Sensex. The Nifty trades
01:07 up 21,800 and broader markets also performing in line with the benchmark. The breadth of the market
01:14 also is more or less a 50-50 picture, a whole bunch of stocks that are actually losing, but
01:18 we've also got a few that are gaining on the upside. In terms of the top stocks on the Nifty 50,
01:24 on the gaining side HDFC Life is up 3 odd percent, TCS is up 3 percent, Bharti Etel on back of
01:31 earnings looks good. BPCL continues its up way move, 2 percent gains on BPCL. So, OMCs, IT
01:37 are the bigs talking for and insurance counters also having quite a field day in today's trade.
01:43 On the sell side, ITC, Britannia, Hindalco, Apollo Hospitals, RIL are trading soft. Across
01:49 the broader markets the top stock of the day is Triveni Turbines. Tell a set of numbers,
01:54 the counter gets rewarded, trades the gain of 12 percent. Yes Bank is well up 8 percent, IOP,
02:00 Praj Industries, Paytm are all trading with a positive bias. On the sell side, a whole bunch
02:06 of names that are reacting to earnings, Suvain Pharmaceuticals, a huge miss on earnings, the
02:10 stock trades the 9 percent cut. Prince Pipes disappoints the street 6 and a half percent lower,
02:15 PSC as well, quarter on quarter those numbers don't look good and the stock gets a sell.
02:19 This morning down 5 percent. So, all in all it's all about earnings reaction. But again beyond that
02:26 the benchmark itself is missing and lacking cues, if not a price, a time correction very much on the
02:32 cards I'd imagine. Most certainly because Samina you hit the nail right on its head. It is
02:36 consolidation that we are looking at at the moment when it comes to the benchmarks. Remember
02:41 we've tested 22,000 twice in the last couple of weeks and we've seen the Nifty come off
02:47 and at the moment it does seem like there is stiff resistance around that mark. Well that said,
02:53 Nifty is flat at the moment but we are seeing a little bit of an increase in open interest towards
02:57 position building. Cannot necessarily determine if this is towards the long or the short side.
03:03 But moving on to the Bank Nifty, well there is a little bit of weakness coming through here.
03:08 Down 0.6 percent for the index and 6 percent added towards open interest. What could potentially be
03:15 deciphered as shorts but that is still yet to be determined. Now in today's day of trade,
03:20 even as the Nifty hovers around 21.7, 21.8 hundred, well we are seeing a little more activity,
03:29 rounded up around 21.3, 21.4 hundred. A little bit more call, pardon me, put writing coming
03:35 through out there. Where does that stack up in terms of Max OI? Well overall, this is of course
03:40 the Bank Nifty and we are watching out for 46,500 on the higher end. That's where we have Max OI as
03:47 far as calls go and in Max OI puts it's around 46,500 point range between today and tomorrow
03:56 because since tomorrow is the Bank Nifty expiry, we will be watching out for that one as we move
04:00 in through the course of the next couple of sessions. That said, let's take a look at stocks
04:06 and see how things are panning out there and we do have shorts building up in Ashok Leyland,
04:10 but besides that, IPCA Lab, Alchem Lab, SAIL and ONGC, pharma companies and oil and gas companies
04:18 are looking at an up move, further up move with longs building in there. In terms of stocks,
04:23 we are seeing unwinding, let's pull that up as well for all the stocks which are seeing a decline
04:27 in open interest, short covering for IGL, UPL, Pedalite, Bharat Forge and SPI Life. So, we
04:33 continue to keep an eye on this and of course, potential consolidation on the cards for the
04:38 benchmarks for now, Samina. Right, those are of course all the market movers in trade this morning,
04:43 but BLSE services has listed at a 129% premium just a few minutes ago. So, the resting comes in
04:53 on a day when the markets are actually not looking to buy into. Well, listen in to what the management
04:58 has to say. We did catch up with them earlier in the day. They talked about the growth trajectory
05:02 going ahead. Here's a slice of that conversation. BLSE services is in the business prime of digital
05:11 India. We are providing services under digital India across the length and breadth of the country.
05:16 We have more than 98,000 touch points spread across all the states and union territories of
05:21 India. In this business, we provide services under three segments. First is the business
05:26 correspondent to major public sector banks and private sector banks within India, where we work
05:31 for banks like State Bank of India, Bank of Baroda and in private sector, we work for banks like HDFC,
05:37 Karur Vyasa amongst other banks. We work with more than 15 banks now, wherein people in upwards of
05:44 24,000 centres spread across India, people come for banking transactions like opening a bank
05:49 account, deposits of money, transfer of cash. This infrastructure is mainly provided in the
05:56 semi-urban and rural part of the world, part of India, for making in road into the unbanked
06:03 population of the country. Then we have a segment which is the e-governance segment. How we work in
06:09 our parent company in visa outsourcing. Similar kind of model is adopted here, wherein we work
06:15 with different states in India like UP, Rajasthan, Karnataka, West Bengal, different kind of government
06:21 services like birth certificate renewal, driving licenses, arms licenses, Aadhaar, PAN card,
06:26 things are outsourced to us by the local state government department on exclusive basis, wherein
06:31 we operate the centre. We have a steady footfall of customers that come exclusively to us to avail
06:37 these services. And then the third segment is assisted e-services. Now we have a footfall of
06:43 around 4 lakh people that come to our centres every day for availing either the business
06:48 correspondent services or the e-governance services. So we were thinking what way we can
06:53 upsell and cross sell different kind of products or services like insurances, deep bank account
06:59 openings, bank KYCs to the existing customer base. So that is the third segment, assisted e-services.
07:04 Shikhar, going forward, is this mix likely to change? Where is the bulk of the latest demand
07:11 coming in? What businesses is it coming in? I know you have already elaborated to a certain extent
07:16 banks, I reckon they are the largest clientele, but going forward, how does FI25, FI26 look like?
07:24 Correct. So if you see last year, the business correspondent contributed around 66 percent,
07:35 followed by 24 percent from our e-governance and the rest of business came from our fairly new
07:40 assisted e-service business. This is mainly because we acquired certain companies in the
07:45 last one or two years that led to a boost in revenue in this particular segment of business
07:51 correspondent. But having said that, going forward, we see good growth coming in from
07:57 all the segments wherever we are operating. In the business correspondent segment, if you see now,
08:02 we started working with only one major public sector bank, now we have impaneled many other
08:07 banks. We are in the process of expanding into different banks, expanding the reach across
08:12 the additional network. Even banks are now adding additional products. So we are getting
08:18 incremental revenue from the same touch points. So we see good growth coming in from the business
08:23 correspondent sector. Also the e-governance sector, if you see the model is phenomenal,
08:28 we open centres at our own cost, people get services in a timely manner, government is
08:34 happy, customers are happy. So we see this model evolving into different states. Land
08:39 Accord registration services have been outsourced to us in West Bengal. Other states are also
08:43 considering outsourcing. So we see good growth coming in from all the segments of the company.
08:48 Shikhar, from what I understand, you guys are net free cash flow positive. You guys are debt free.
08:56 Given the kind of plans that you guys have on the anvil, will your internal accruals be enough for
09:03 you to go ahead and expand or would you in fact perhaps look for some sort of debt going forward
09:09 sometime in the future? See at BLS, first of all, I would like to mention that we like these kind
09:15 of businesses. We like running companies that are mostly debt free, negative working capital
09:20 business, upfront cash collection. The similar model we followed in BLS e-services, it is a
09:25 negative working capital business. It is throwing money. We are generating good profits, cash flows.
09:31 But we are looking at different kind of investments within the company,
09:36 also expanding on inorganic basis. So definitely the money that will be raised through the IPO,
09:43 certain parts will be used in inorganic expansion. The money that will be generated from the profits
09:49 of the company will also be used for further growth, be it acquisitions or investment within
09:54 the company. Well, that's the management of BLS e-services talking to us about what the future
10:01 holds. And it is looking good at the moment, at least as far as the debut is concerned, 140%
10:07 higher than its issue price currently at Rs. 323 per share. But with that, we should focus back
10:14 to the futures and options space. Let's get in our experts for today. We have Ruchit Jain of
10:18 5pesa and we also have with us Dhvani Patel of Finversify, who's joining us on the show. Thank
10:26 you so much for joining in, both of you. Dhvani, I start with you. Your view on the benchmarks
10:30 right now, consolidation on the charts. Do you expect some sideways movement in the near term?
10:36 Good morning, Agha. And talking about the benchmarks right now, we definitely saw Nifty
10:43 making an all-time high, but post that we could not sustain those levels. And from there, we are
10:48 seeing a slide down in the past three days. I'm holding a cautious view over here on the benchmark.
10:53 The next level that I'm looking on the downside to act as a good support is 21,675 on the spot level.
11:00 If we break those levels, then there is more profit booking coming in on the index. But for now,
11:06 21,675 is an important, crucial level on the intraday chart as well, which is noteworthy and
11:13 has to be washed out for. Bank Nifty, if you're talking about, has seen more pain as compared to
11:18 Nifty. We are seeing the fall being very intense over here. We failed to make an all-time high on
11:24 the Bank Nifty, so it was lagging in performance and that is shown in the numbers as well. On the
11:29 downside in Bank Nifty, the next level I would watch out for is 45,120 on the spot levels. Once
11:35 45,120 is broken on the lower side, we'll see further pain coming in. But till the time that
11:41 level is being intact on Bank Nifty, I'm holding a positive view. On the defence sector side,
11:47 we are seeing FMCG taking some beating today, but IT has to be on the focus towards the defensive
11:54 sectors. Richit, how are you feeling about the index? Bank Nifty has been conspicuous by its
11:59 absence in the last few days in terms of participation. And it almost feels like until
12:04 they don't provide the support, the Nifty is going to remain sideways. Do you agree? And if you do,
12:09 then what would the trade on the Nifty and Bank Nifty be? Yes, I have a good morning, Samina.
12:14 Very good morning, Agam. Well, if you look at the benchmark index, I'll start with the Nifty first.
12:19 So Nifty technically has formed a double top and a shooting star reversal pattern on the DG charts,
12:24 which is definitely not a good sign. And this is an indication that we may go through some
12:28 corrective phase in the short term. Now, generally there are two types of corrections. One is a
12:33 price-wise correction or a time-wise correction where index may not see significant down move,
12:38 but we may see some consolidation phase in the short term. Now, the 20 DMA support in Nifty
12:43 is placed around 21,630, which is an important level to watch out for. In case if we break that,
12:48 then only we will assume that some price-wise corrections would come in the near future.
12:53 Otherwise, 21,630 to 22,000, 22,100, this would be the range where the market would continue to
12:59 consolidate. Yes, you rightly pointed out that Bank Nifty has been the spoil spot because the
13:03 private sector bank especially has not seen any kind of long build-up happening over there. Although
13:08 many of the PSU space has shown a good outperformance, but it's not the heavyweights
13:12 are more of private sector from the private sector. And that's why there's a relative
13:15 underperformance has been seen. Now, 45,500 is important from a closing basis. And in case if
13:21 we see any close below that 45,500 mark, then I think the Bank Nifty has potential to correct
13:27 further because 45,500 put options have about 27, 28 lakhs of open index outstanding, which could
13:33 unwind in case if we see the index closing below that. And if you look at the options activity,
13:38 then more of all writing has been happening in Bank Nifty where the highest open interest of
13:42 44 lakhs is in 46,000 call option. Even 45,000 call option has seen about 35 lakhs of OI outstanding.
13:49 So call writers are more focused on writing call options of Bank Nifty, which clearly
13:54 indicates that the relative underperformance which is there in the banking index could continue.
13:59 Okay, well stay with us. We will be slipping into a short break. But
14:04 on the other side, we get your stocks and a lot more. Stay tuned in.
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17:18 Welcome back. You are watching the FNO show. The markets like we said are having a sideways kind of morning,
17:24 but stock specific action continues to drive the straight.
17:27 Richard, I want to talk to you about Bharti. I know the move may not be significant, but it's still up
17:33 nearly 3% and it's a heavyweight, let's not forget. On the charts, what does Bharti look like?
17:39 Earnings of course, on the fundamental side were given a thumbs up.
17:43 So overall, I think the broader trend still remains positive because we have often seen that high top,
17:49 high bottom structure, but I think the prices have already seen a decent up move in last one or two series
17:54 where the stock was consolidating around that 950 mark. From that, the stock prices have already seen a recent
17:59 high of 1200 mark. There could be some short term corrections in the stock, but corrections could be used
18:04 as a buying opportunity if the stock comes around, I would say, 1080, 1070 kind of range where major
18:10 support would come in. So one should keep a buy on dip strategy in Bharti Airtel as far as short to medium term is concerned.
18:17 Okay, it's a buy on dip strategy for Bharti Airtel. That's the view coming in from Richard.
18:22 Dhvani, let's take a look at all the trading ideas that you have for us today. What are you recommending?
18:29 I have two trading ideas over here. The first one which I have is on Siemens, we are already seeing that
18:36 on a short term structure, the stock is showing a reversal and the buying action is coming in
18:41 in this particular counter. It's a trading call, so a short target over here of 4,280 to 4,330 has to be chased
18:49 with a stop loss of 4,105. The next one I have is on Oberoi Reality. The stock has seen a beating up coming in.
18:57 It's a more of a mean reverting trade. So you buy at the current price, target is of 1390 and a stop loss of 1299
19:05 has to be maintained. In both the cases, the risk reward is more than one.
19:10 What about your picks? What are your top trades that you're recommending to our viewers this morning?
19:17 Richard, I'll start with the short one, which is a short call in Crompton Consumer.
19:26 So a low top, low bottom sector technically and even if you look at the derivative segment,
19:30 a decent amount of ROI has been seen along with the price correction today, which clearly indicates
19:35 that the short formations have been going on in the stock. So I think keeping a stop loss about 297,
19:41 one can go short on Crompton Greaves for potential targets around 275. And Ipca Lab is the stock on the buy side
19:48 where long formations are seen, price up moves supported by rise in open interest.
19:52 Stock prices have already seen a consolidation of about a month. It just seemed to be a time wise correction
19:57 within an uptrend and today's breakout indicates just a resumption of that uptrend.
20:01 So Ipca Laboratories one can buy on some dips in the range of 1180 to 1170,
20:05 keeping a stop below 1140 for potential targets around 1250.
20:10 Richard, two to three stocks that I want to bring up with you, Tata Chemicals.
20:15 Numbers were a huge disappointment. The stock was very active in the F&O space over the last few days.
20:20 Tata Motors, again, back of numbers spectacular, but action packed even before the earnings came through.
20:27 Though, Anusha, of course, while we are at it, if you've got a view on Paytm, after a 50% fall,
20:33 it is trying to find a bottom at these levels. What's your take on these three stocks?
20:39 So I'll start with Tata Motors first, where the broader trend continues to remain positive.
20:44 We have seen within the auto space, if you compare the stock with other names,
20:47 then definitely there has been a good outperformance in this thing.
20:50 And I think there are no signs of reversal. So this outperformance could continue going at as well.
20:55 Of course, from a risk-award perspective, since the stock has already seen a rally,
20:59 so I would suggest that in case if you get any dips, then one should look for buying opportunities and declines.
21:05 But if any existing long positions are there from mid to long term perspective,
21:08 then those investors should continue to ride on this trend. Tata Chemicals, a bit of underperformance has been there.
21:14 Some, I think, short formations were there in the stock, but today there are some signs of those shorts getting covered from lower levels.
21:21 So at least a pullback move could be there for 2020, where 2030 would become the next resistance on pullbacks.
21:28 So not a great place to go short or go contra in this stock over here.
21:33 But I think 2020, 2030 pullback move would be there where one can again take a review on the stock.
21:38 And Paytm, of course, we have seen that four consecutive days of lower circuit, the circuit opened today and the price is already higher.
21:46 But frankly, in technical analysis, just one day of a move is not enough to consider it as a trend reversal,
21:52 but rather a series of high top, high bottom such as it starts forming in the near future.
21:57 Then I think one should take a view for any buying interest in the stock.
22:01 So as of now, it will be just a pullback move. The trend has not changed technically for now,
22:06 but hence no fresh buying recommendations in Paytm.
22:10 Okay, Dhwani, I wanted to come in on Coal India. Of course, it's been seen a staggering up move.
22:18 In fact, it's doubled in the last six months, if I'm not mistaken, currently at 442 odd.
22:23 That's where the cash market number is. But it is an F&O stock.
22:27 What's your view here and how would you deal with Coal India? Can you initiate fresh lungs even at these levels?
22:33 Talking about Coal India, we've already seen that the stock has given a good run up over here.
22:39 So the broader structure over here stands on the bullish side.
22:42 We have seen good volume participation also coming in on the upward rising green candles on the daily chart.
22:48 What we're seeing on an intraday chart is interesting over here, where 450 is acting out as a resistance.
22:54 So for me to initiate a new trade over here, 450 needs to be taken out in the spot level on immediate lookout.
23:01 And after that, we can expect further move coming in on this particular counter.
23:06 Derivative data also suggests that 450 over here is acting out as a resistance because we are seeing good amount of call open interest being built up over here.
23:17 So on immediate basis, first 450 is to be looked out for. Once we break above that, we'll see fresh lungs coming in here.
23:24 OK, that's the view coming in as far as Coal India is concerned. And the other stock that I wanted to address was BPCL.
23:31 Now, BPCL has also been on a tear off late, hasn't it? And this is going from strength to strength.
23:38 In fact, all the OMCs are. So it's HPCL, IOC, BPCL, all of them looking at strong momentum building off late.
23:46 If you consider how things are panning out over the course of the last few weeks as well, you know, there has been a lot of strength coming through.
23:53 Dhwani, your view on any of these OMCs, BPCL perhaps, if you could give us your view here, how would you address it?
24:00 So talking about BPCL over here, we are already seeing that in this week's session, yesterday's move has given a breakout above its previous highs over here.
24:10 So the stock is definitely holding strength over here. And over on derivative side also, we are constantly seeing that there is a good amount of open interest addition.
24:19 Currently, we are having about 4% of open interest addition in today's session itself.
24:24 So definitely longs can be hold out on this particular counter. Fresh entry is not suggestive over here.
24:31 We will see some profit booking coming in. But for the ones who are already holding longs over here, the next stop loss that one needs to maintain is of 570.
24:39 Right. A couple of other names that are catching attention is it Veni Turbine, Yes Bank, IOB, Praj on the upside, Zenzar, Ipca Labs, of course, which is already mentioned.
24:52 Anything on IT, Richit, that you are looking, which is looking constructive to you at this stage?
24:58 One pick from the IT pack that you would maybe play for the Feb series?
25:03 Wipro looks quite interesting within the IT space. So during the results in the mid-Jan we witnessed a good price volume breakout in Wipro.
25:11 Second half of the January series was more of a consolidation where some correction was seen but not a very high volume sell of VFC.
25:19 Secondly, this entire consolidation which has happened post results, the 20 DMA has not been breached.
25:24 So the 20 DMA has acted as a good support for the stock.
25:27 So I think till the stock is trading above this 470 mark, looks quite interesting for the rest of the Feb series in case if the IT shows a good support for the market.
25:38 Then Wipro could be one stock which could head towards the result day high of 525-527.
25:43 So one can look for buying opportunities in Wipro with stock below 470 for potential targets around 527.
25:49 Okay, well we have run out of time on the show. So I'm going to take a moment to thank both our experts, Dhvani and Ruchid for joining us and taking us through their views on the markets.
25:59 And on that note, it's a wrap on the F&O show. But lots more lined up. Stay tuned to NDTV Profit.
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