a74 Bulls rising from slumber, stage set for rally…content.icicidirect.com/mailimages/IDirect_MonthlySectoral_July15.pdfBulls rising from slumber, stage set for rally… Domestic

ICICI Securities Ltd. | Retail Equity Research

June 25, 2015Monthly Technical

Bulls rising from slumber, stage set for rally…

Domestic equity benchmarks waded through extreme volatility in June 2015. Despite of the highly uncertain global environment the benchmarks Sensex & Nifty stood their ground and protected the important support bastion placed around 26300, 8000 (Sensex, Nifty) regions which corroborated our view of range bound market scenario as highlighted in the June edition of this report.

What we expect:

The closer evaluation of price and time behaviour during the recent correction signals changing market dynamics and points towards a possible turnaround if the benchmarks are able to enforce a strong close above 28100 / 8500 levels in the current up move. We believe that a faster retracement of the last down move (28070 to 26307) will be an ideal way to assert the resurgence of the bulls after a four month correction and open the room for a rally towards April 2015 high placed at 29094, 8844 levels over the next few months. Failure to post a faster retracement above 28100/8500 could lead to range bound consolidation between 28100 to 27200, 8500-8200 levels in the short term.

Changing market dynamics an early sign of turnaround??

The key observation which indicates changing market dynamics is that the current decline during May-June 2015 is smaller in magnitude as compared to the preceding March and April corrections while it has extended the time wise correction. The May-June fall (28071 to 26307) measured just 1764 points whereas each falling segment in March and April 2015 measured approximately 2700 points and time wise consumed 17 sessions. The fall getting smaller in magnitude is the first indication of waning downward momentum and serves as a precursor ahead of an impending reversal. Further confirmations to watch for calling a Trend Reversal

Going forward we would closely watch out for the following key triggers to signal a reversal of the entire corrective trend is place since March 2015 as listed below:

The Sensex has already cleared the first step by steering above the upper band of the falling channel marked by joining the monthly highs of March and April 2015. However the Nifty is yet to follow suit

Secondly the index needs to post a faster retracement of the last falling segment (28071 to 26307). The benchmarks fulfilling these two criteria during the current up move will signal end of the corrective phase and trigger a trend reversal

Historically it has been observed that major trend reversal bottoms are supported by faster retracement of the last falling segment. In simple terms, when a falling segment is overhauled in faster time it reaffirms the resurgence of bulls and triggers a major turnaround. The benchmarks have so far completed 8 sessions in current up move and already retraced more than 80% of the last falling segment which had consumed 15 sessions. We would be closely watching for the benchmarks to surpass their respective May 2015 peaks of 28071, 8489 in lesser time as that would confirm the reversal of ongoing corrective phase since March 2015.

Pictorially, the two distinct bottoms of May and June 2015 placed in the vicinity of 8000 region can be termed as a potential Double Bottom formation with confirmation pending above May 2015 high of 8489 levels.

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Indices Snapshot

% from 3-month 12-monthIndices 200 EMA % chg % chgSensex 27730 2.1 -0.8 9.1CNX Nifty 8361 2.0 0.2 11.6CNX Mid Cap 12949 5.5 1.4 19.8CNX Small Cap 5332 1.3 -1.2 1.2CNX IT 11347 0.5 -4.7 18.5Auto 18622 2.6 -3.3 22.1CNX Pharma 11986 5.7 -5.5 47.3CNX FMCG 19781 -0.2 0.5 15.0Banking 21047 4.6 0.9 20.4Oil & Gas 9889 0.6 6.2 -11.3Metal 9351 -9.4 -1.2 -28.6Capital Goods 17387 8.4 0.5 7.3Power 2030 -2.4 -4.6 -12.5Realty 1412 -12.9 -15.2 -32.0PSU 7691 -0.9 1.1 -10.9* Closing Price of June 24, 2015

Close

Source: BSE India, NSE India, ICICIdirect.com Research

* BSE has replaced IT, health care, FMCG, mid-cap and small cap indices with new ones. Due to lack of historical data, we have considered the CNX IT, pharma, FMCG, mid-cap and small cap indices for reference

Top picks for July 2015

• Larsen & Toubro

• Mahindra & Mahindra

• Bosch

• BEML

• Union Bank of India

• Welspun India** * All stock recommendations have been initiated on i-click to gain prior to releasing of report. Exact timings mentioned at bottom of the rationale ** Booked 50% profit in Welspun India on June 22, 2015 at | 615.00 and trail stop loss to | 570.00 Research Analyst Dharmesh Shah [email protected] Nitin Kunte , CMT [email protected] Dipesh Dagha [email protected] Pabitro Mukherjee [email protected]

Vinayak Parmar [email protected]


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Therefore we believe a faster retracement above 28100, 8500 levels would cement the major bottom around 26300, 8000 mark and open the doors for a rally towards April 2015 high of 29094, 8844 levels in the coming months. The placement of 80% retracement of the entire decline from March to June 2015 (30024 to 26307) at 29280 levels makes this the next key barrier for the index in the coming months.

Seasonality trends also favour bottoming out in second quarter

The historical seasonality trends play an important role in any given market scenario. In the case of Sensex there is credible historical evidence which suggests that markets form important bottoms in the second quarter of each calendar year and the subsequent three and six month performance has largely yielded positive returns. A look back at the historical data of last 15 years from 2000 to 2014 corroborates the second quarter seasonality trend of Sensex as follows:

On 11 out of 15 occasions the Sensex has delivered positive three month and six month returns from the bottom made in the second quarter of each year as highlighted in the adjoining table.

Out of the four instances where it has delivered negative three month returns, on two occasions the six month returns have been positive

The aforementioned observations clearly highlights the seasonality factor of our domestic markets which have tended to bottom out in the second quarter of every calendar year and also gels with our observations of changing market dynamics in the present scenario

Short-term base to shift upwards to 27200, 8200 region

Going forward, we believe any cool off towards 27200, 8200 region should be used as a buying opportunity as any dips towards this region will result in higher bottom formation. The confluence of key technical factors converging near 27200, 8200 region makes this a firm support region for the benchmarks where fresh demand will emerge based on the following observations:

The 200 day EMA is currently placed at 27186, 8200 levels The bullish gap area formed on the weekly charts during current

weeks trade is placed at 27202 - 27115 , 8257-8224 levels The 50% retracement of the current rise from 26307 to 27948

levels is also placed around 27127, 8200 region Momentum Oscillators

Among oscillator, the 14 week RSI took support precisely at its bull market support threshold of 38 – 40 readings during the recent decline as it made a low of 40. The resulting pullback has seen the RSI generate a bullish crossover above its 9 period average which suggests build up of positive momentum and favours continuation of the current up move over the coming month

Seasonality Trends: Returns from low of 2nd Quarter

Year Sensex low in Q23M return

%6M return

%

2000 3832 6.7 3.7

2001 3097 -9.2 5.3

2002 3098 -3.4 9.0

2003 2904 53.3 101.1

2004 4228 32.1 56.2

2005 6141 40.6 53.0

2006 8799 41.5 56.7

2007 12426 39.2 63.3

2008 13406 -4.1 -28.0

2009 9546 79.4 83.0

2010 15960 25.7 28.5

2011 17314 -5.0 -10.7

2012 15749 19.1 23.4

2013 18144 6.8 16.7

2014 22198 20.0 23.9

Source: BSE India, ICICIdirect.com Research


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BSE Sensex CMP- 27730

Exhibit 1: BSE Sensex – Weekly Candlestick Chart

Source: Bloomberg, ICICIdirect.com Research

The 14 week RSI rebounded from its bull market support reading of 40 and has generated a bullish crossover above its 9 period average suggesting build-up of positive momentum

Potential Double Bottom formation at 26300 levels would be confirmed upon a strong close above 28100 levels.

Dec’14 26469

30024

28071

52 week EMA

29094


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Bank Nifty (18347) Buy in staggered manner for upside to 19500…

Exhibit 2: Bank Nifty Generic Futures– Weekly Bar Chart


• The Bank Nifty traded highly volatile in June as it crumbled under heavy selling pressure after RBI cut key policy rates while raising the inflation forecast for January 2016. However the index made a steady come back in the second half of the month to recoup most of the losses to end the June series on a flat note

• The monthly price action resembles a Long

legged Doji candle with a negligible real body and a large lower shadow. The two back to back monthly candles carrying large lower shadows highlights the presence of strong value buying in the vicinity of 17200 levels

• The selling climax in June halted precisely near

the 52 week EMA (then placed at 17278) which also coincided with May 2015 low of 17286. The ensuing pullback highlights that the index is absorbing all the negatives while fortifying its earmarked support placed around 17200. We believe this is a positive sign and the index should eventually resolve higher from the two month broad consolidation band of 18800 to 17200 levels and head towards 19500 levels in the coming months. Therefore from a positional perspective staggered buying can be considered from current levels upto 18000 levels for eventual upsides towards 19500 over the coming months

• We expect the current up move to retrace the

entire January to June fall (20934 to 17138) by atleast 61.8% which is placed around 19500 levels. The congestion area of February and March 2015 is also around 19500 making this a key short-term hurdle for the index

• The immediate support for the index is pegged

around 18000 levels. The 38.2% retracement of the current rise from 17138 to 18480 is placed at 17970 levels while the current weeks opening bullish gap area is placed around 19726 levels. Any throwbacks towards 18000 region are expected to garner fresh buying interest

• Among oscillators, the 14 week RSI held onto

its bull market support zone of 40-44 during the June correction and the ensuing pullback has seen the oscillator generate a positive crossover above its 9 period average suggesting strength in the current up move

Bank Nifty held its 52 week EMA support despite high volatility highlighting strong buying support in the vicinity of 17200 levels.

The 14 week RSI has generated a bullish crossover above its 9 period average after holding its bull market support reading of 40 during recent correction

61.8% @ 19500

20934

Identical bottoms near 17200 in May & June

52 week EMA


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BSE sectoral merry-go-round

In this section, we focus on the relative performance of the BSE sectoral indices. The adjacent scatter chart highlights the relative performance of the BSE’s 11 major sectors relative to the Sensex with the y-axis plotting the relative price momentum over the past 12 months and the x-axis plotting the relative price. The chart is then subdivided into four quadrants.

Leadership quadrant: Top right is “Leadership” quadrant, which represents a sector that has strengthened in relative price and momentum vis-à-vis the Sensex.

Weakening quadrant: Bottom right is the “Weakening” quadrant where a sector’s relative price has started to deteriorate and momentum has started to slow.

Lagging quadrant: Bottom left is the “Lagging” quadrant where the sector’s relative price has become negative with momentum suggesting underperformance vis-à-vis the benchmark.

Improving quadrant: Top left is the “Improving” quadrant where a sector’s relative price trend has started to rise with momentum.

In summary, if a sector appears in the top right quadrant, it indicates the sector is trending higher and outperforming the benchmarks. If a sector appears on the bottom left it indicates it is trending lower. Sectors appearing on the bottom right indicate they are underperforming the benchmark while if they appear in the top left it suggests an improving price momentum.

Note: BSE has replaced IT, health care, FMCG, midcap and small cap indices with new ones. Due to lack of historical data, we have considered the NSE IT, pharma, FMCG, mid-cap and small cap indices for reference Exhibit 3: BSE sectoral indices relative performance


Sector rotation monitor

What each quadrant indicates

Sectors in the top right quadrant indicate strong trending sectors

• Resurgence of Oil & Gas: The BSE Oil & Gas index hogged the limelight and exhibited strong outperformance on both price and momentum front. The sector is back on investors radar following prolonged period of consolidation and is expected to maintain its positive impetus in the coming months

• The BSE capital goods index continues to consolidate its position in the Leadership quadrant highlighting relative outperformance even in volatile market conditions

• The banking index has shown some pick up

in momentum after slipping into the weakening quadrant suggesting a fight back after recent underperformance

• The BSE PSU index is the second major

mover on relative price and momentum terms and has surged into improving quadrant suggesting that the ongoing consolidation has approached maturity and the sector should participate in the up move

• The BSE health care index has lost its leadership position and slipped all the way into weakening sphere suggesting profit bookings and implies relative underperformance in coming months

• The BSE IT index has lost further ground and

slipped into lagging quadrant implying relative underperformance along with the realty index. The BSE auto index continues to languish in weakening quadrant suggesting further consolidation going ahead


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Sectoral performance – Relative to benchmarks In order to closely gauge the underlying strength in the respective sectors vis-à-vis the benchmark, we analyse the Relative Strength Comparative (RSC) indicator. As the name suggests, it is a comparative measure of strength vis-à-vis a benchmark or a sector. While the RSC line is rising, the sector is outperforming the general market, i.e. it is either rising faster than the benchmark in an up trending market or going down less, in a down trending market or even rising. While the RSC line is falling, the sector is underperforming the broad equity market. If the market is going up, the sector is going up less or may be even going down. If the market is going down when the RSC line is falling, the sector is going down more than the market. A flat RSC line indicates in line market performance going up or down by the same magnitude. The purpose of this exercise is to identify those sectors that are outperforming and avoid the sectors that are underperforming.

BSE Auto Index BSE Auto Index continues to trend down in a falling channel. Lack of faster retracement of last falling segment in June suggests further consolidation ahead. On relative terms, index is expected to perform in line with benchmarks, barring Tata Motors which is a weaker link

Exhibit 4: BSE Auto Index – Weekly Bar Chart


Exhibit 5: BSE Auto Index vs. Sensex – Relative Comparison


Relative Strength Comparative: Evaluating

the underlying strength

RSC line moving sideways for several weeks indicating market performance of Index

BSE Auto index bounced off its key support near 17900. Index is however expected to remain under consolidation in 18000-19200 range

BSE Auto Index and relative to Sensex

Auto index is expected to continue its short term consolidation amid lack of faster retracement of last

falling segment.

Weekly RSI is seen rebounding from its bull market support threshold of 40-45

20386

Key support marked by - 52-week EMA - December 2014 lows - Lower band of channel

17907


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NSE Pharma Index The Pharma index held its key support at 11000, however on relative terms the performance has been below par against benchmark. Going forward, the index is expected to enter a consolidation phase which would lead to an under performance on relative terms

Exhibit 6: NSE Pharma Index Weekly Bar chart


Exhibit 7: NSE Pharma Index vs. Nifty – Relative Comparison


BSE Capital Goods Index The sector out performed benchmarks in most part of June and is expected to extend it’s out performance given the robust price structure. Breach of the falling trend line signals resumption of up trend while RSC line reflects overall out performance from medium term perspective

Exhibit 8: BSE Capital goods Index Weekly Bar chart


Exhibit 9: BSE Capital goods v Sensex – Relative Comparison


BSE Capital Goods Index and relative to Sensex

Pharma index is expected to under perform on relative basis while holding its support of 11000 mark

Capital goods index is expected to resolve higher after the recent consolidation as it is poised at

important support on both price and relative terms

Pharma index bounced back after taking support at 52-week EMA and 80% retracement of preceding rally

The RSC line breached a trend line support which indicates that the strong out performance over medium term is lost. Sector may witness a pull back however out performance is unlikely

The RSC line is moving in a rising channel which signals a well structured uptrend. Such behaviour signals out performance on relative terms which is expected to continue in coming months

CG index held above its support at 16000 mark and expected to head towards 18000 in the short term

NSE Pharma Index and relative to Nifty

Weekly RSI has approached its historical bull market support reading of 50

52-week EMA

18796

10356 Key support @ 11000 -80% @ 11088 -52-week EMA

14020

34-week EMA

Support @ 16000


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NSE FMCG Index The FMCG index continued to form lower high and lower low before bouncing off October lows at 18740. As reflected from adjacent chart, on relative terms index is expected to under perform, weighed down by ITC. On absolute terms, a pull back towards 20000 is likely

Exhibit 10: NSE FMCG Index Weekly Bar Chart


Exhibit 11: NSE FMCG Index v Nifty – Relative Comparison


NSE IT Index The IT index is seen hovering near its key support of 11000 mark. While index is posing a pull back from the support, on relative terms index is expected to remain under performer for a while. Major index heavyweights are expected to remain in a consolidation in short term while maintaining medium term bullish structure

Exhibit 12: NSE IT Index Weekly Bar Chart


Exhibit 13: NSE IT Index v Nifty – Relative Comparison


FMCG index is expected to underperform in relative terms even as price wise it is placed at important

support and may pose a pullback

IT index is expected to remain under consolidation. While pull back from current levels is in offing, on relative terms index is expected to under perform

The FMCG index is expected to hold October lows and pose a pull back towards 20000 levels

RSC line continues to languish in a narrow consolidation range suggesting relative underperformance

The RSC line is seen trudging sideways reflecting lacklustre price action. Index is expected to under perform in short term

IT index witness sharp pullback from its 52 weeks EMA indicating buying near key supports

NSE FMCG Index and relative to Nifty

52-week EMA

Weekly RSI is seen approaching its own support near reading of 40-45 zone

NSE IT Index and relative to Nifty

22716

17029

October lows @ 18740


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BSE Oil & Gas Index The oil & gas space witnessed fresh buying interest as the index approached long term support trend line. We expect sector to continue enjoy upsides in coming months. On Relative terms, a bout of out performance in the short term is likely.

Exhibit 14: BSE Oil & Gas Index Monthly Bar Chart


Exhibit 15: BSE Oil &Gas Index vs. Sensex – Relative Comparison


BSE Metal Index The Metal index lost 2% for the month against 1% gain on benchmarks reflecting continued under performance. Going forward we expect index to hold drift towards February 2014 lows before posing any recovery. On relative terms under performance is expected to continue

Exhibit 16: BSE Metal Index Weekly Bar Chart


Exhibit 17: BSE Metal Index v Sensex – Relative Comparison


Oil & Gas index is expected to out perform in coming weeks led by Reliance industries

Although the price may enter short-term consolidation, relative underperformance will

persist

The index is seen bouncing off the long term trend line support and expected to resolve higher in the short term

Relative comparison ratio seen bouncing off the down slopping trend line indicating out performance in the short term

The RSC line continues to trend down forming lower low indicating relative under performance over medium term

The index is seen consolidating at the lower band of the rising channel and Feb 2014 lows

BSE Oil & Gas Index and relative to Sensex

BSE Metal Index and relative to Sensex

14102

6354

Feb 2014 lows


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Stock Picks

Larsen & Toubro (LARTOU) Buying Range: 1730.00 - 1757.00 Target: 1980.00 Stop loss: 1630.00

Exhibit 18: Larsen & Toubro – Monthly Candlestick Chart


Mahindra & Mahindra (MAHMAH) Buying Range: 1250.00 - 1270.00 Target: 1475.00 Stop loss: 1145.00

Exhibit 19: M&M – Weekly Bar Chart


1401

The stock has formed a bullish Morning Star candlestick pattern on monthly chart after taking support at lower band of the rising trend channel

61.8% @ 1550

Monthly RSI is seen consolidating in a narrow range above its bull market support of 50 reading

• The capital goods behemoth Larsen & Toubro

remains in a firm up trend since the beginning of 2014. Recently the stock displayed outperformance in turbulent markets and bounced back from the lower band of long term rising channel as highlighted in the monthly chart

• The supportive price action near the lower band of the channel was validated by the formation of bullish Morning Star candlestick pattern on the monthly chart. A morning star candle formation during correction near an important support area highlights reversal of the current corrective price action and start of a fresh uptrend thus offers fresh entry opportunity to ride the next up move in the stock

• We expect the current up move from support levels to extend towards | 1980 levels in the coming months being the price parity with previous up move from | 1450 to | 1893 as projected from recent trough of | 1544

Recommendation has been initiated on i-click to gain at 09:26 on June 23, 2015

Price parity with previous up move at 1980

12 Months EMA

820

The share price is seen forming base at the 52 weeks EMA and is likely to resolve higher and test | 1510 levels in the coming months

50% @ 1130

Weekly RSI is seen forming base at the bull market support area of 40 and thus supports the positive trend in price

123.6% retracement @ 1510

52 Weeks EMA

• The share price of M&M is seen emerging out of a prolonged phase of consolidation as it has displayed strength during the recent corrective trend in broader market. The stock has formed a strong bull candle on the monthly charts at the major support levels signalling resumption of the primary uptrend

• The recent bottom of | 1130 is placed at an important value area being the confluence of the following technical parameters: a) The lower band of the rising channel in

originating since May 2013 is at | 1160 b) The 50% retracement of the previous major

up move from | 820 to | 1433 is placed at | 1130 levels

c) The stock has the tendency of bottom formation around the 52 weeks as can be seen in the adjacent chart which is currently placed at 1205 levels

• We believe the stock has concluded a healthy corrective phase and is set to embark upon its next up move. We expect the stock to move above its all time high (| 1433) and head towards | 1510 levels over the coming months. The 123.6% retracement of the previous decline from | 1433 to | 1102 projects upside towards | 1510 levels



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Bosch (MICO) Buying Range: 21600.00 - 22000.00 Target: 24450.00 Stop loss: 20200.00

Exhibit 20: Bosch – Weekly Candlestick Chart


BEML Buying Range: ` 1250.00 –1263.00 Target: ` 1465.00 Stop loss: ` 1145.00 Exhibit 21: BEML – Monthly Bar Chart


14840

The share price poised at an attractive value area after the recent corrective decline near the confluence of the major support thus offers a good entry opportunity from a medium-term perspective

61.8% @ 19900

Weekly RSI has given a trend line breakout of its own joining previous highs thus supports the positive trend in price

• The price correction over the last four months has brought the share price of Bosch near attractive value and provides a good entry opportunity from a medium-term players to ride the larger uptrend

• The overall price structure remains positive as depicted by rising peaks and troughs on long term price charts. The last major up move from | 14840 to | 27990 took four months. The stock has already taken four months to retrace just 61.8% of the preceding rally. The slow pace of retracement highlights overall positive price structure

• The stock has recently bounced back from a major value area of | 19800-20000 being the confluence of the following: d) The long term trend line support in place

since April 2014 is placed at 19800 levels e) The rising 52 weeks EMA is currently

placed at ` 19850 levels f) The 61.8% retracement of the preceding

rally from | 14840 to | 27990 is also placed at 19900

• We expect the stock to resolve higher from here on and rally towards | 24800 in the coming months being the 61.8% retracement of the entire decline from | 27990 to 19625



52 Weeks EMA

27990

• The strong up move in June 2015 has steered the stock past the neckline of major Rounding pattern comprising the entire price movement since 2010 till date. The resolution past the long term rounding bottom panning out over more than 4 years indicates a structural turnaround and opens further higher avenues for the stock going forward

• Volume behaviour supports the overall bullish price structure as sharp surge in volumes during price rallies and low volumes during intermediate corrections signifies larger participation in the direction of the primary trend

• We expect the stock to rally towards | 1470 levels in the coming months being the price equality with the previous up move from | 540 to | 1200 as projected from the recent trough of | 806 levels

• Among oscillators, the monthly MACD remains in

strong rising trajectory and is seen diverging from its signal line highlighting the underlying strength in the uptrend in price


The breakout above major Rounding pattern comprising the price movement of over 4 years signals a long term turnaround

Price parity with previous up move @ 1470

Monthly MACD in uptrend diverging from its signal line

1195

Rising volumes and rising prices highlights a firm bull trend


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Union Bank of India (UNIBAN) Buying Range: ` 144.00 – 148.00 Target: ` 175.00 Stop loss: ` 133.00 Exhibit 22: Union Bank of India – Weekly Bar Chart


Welspun India (WELIND) Buying Range: ` 560.00 – 570.00 Target: ` 650.00 Stop loss: ` 510.00

Exhibit 23: Welspun India – Weekly Bar Chart


470

Price seen breaking out of a bullish Flag pattern indicating resumption of medium term up trend and offers fresh entry opportunity to ride the up leg towards 650 levels


14-week RSI is in rising trajectory highlighting the overall positive momentum

• The sharp decline off January 2015 high | 253 halted precisely at the major support area of |130 levels in May 2015. The 80% retracement of 2014 rally (| 100 to | 258) placed at | 131 levels and the previous major breakout area of |130 levels

• The sharp pullback from the support level has shown characteristics of trend reversal as the stock posted a faster retracement of it last falling segment by overhauling the preceding three week decline in just one week. The stock is currently seen forming a higher bottom near |140 levels and provides a good entry opportunity to ride the next up move

• We believe the stock has concluded its corrective phase and is set to embark upon its next up mover over the coming months. We expect the stock to retrace its 2015 decline (| 253 to | 130) by minimum 50% over the coming months which projects upsides towards |189 levels.

Recommendation has been initiated on i-click to gain at 11:44 on June 22, 2015 • The stock has registered a breakout from bullish

Flag pattern during previous weeks up move signalling continuation up the primary uptrend after a brief pause and thus provides fresh entry opportunity to ride the next up move

• The stock remains a strong outperformer vis-à-vis the broader markets as it has continued to stride northwards even as markets have remained in a corrective mode over the last four months.

• At the base of the flag pattern the stock attracted support at the 38.2% Fibonacci retracement (| 473) of the preceding rally (| 297-578 which also coincided with the rising 13 weeks EMA (then placed at | 475 levels). The resulting bounce back from key value area saw the stock register a breakout from the flag pattern suggesting resumption of upward momentum

• The measuring implication of the price pattern i.e. the length of the pole (379 to 578) added to the base of the flag (470+199) projects upsides towards |669 levels in the coming months

• Among oscillators, the Weekly RSI is in rising

trajectory forming higher high thus validates the positive trend in price

Recommendation has been initiated on i-click to gain at 10:48 on June 19, 2015 Booked 50% profit in Welspun India on June 22, 2015 at | 615.00 and trail stop loss to | 570.00

379

578

408

Price rallies are supported by rise in volume where as price correction are with low volume thus highlighting larger participation in direction of trend

A higher bottom formation in the weekly chart signals a reversal of trend after the sharp decline in the first half of 2015

Price bounced back taking support at the previous breakout area & 80% of 2014 rise

129131

50%retracement at 185

Resistance Support

RSI is forming base near the previous lows


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Strategy Follow up – June 2015 Date Scrip Product Strategy RP Target SL Gain/Loss % Comment4-May Reliance Industries Cash Buy 866.00 990.00 805.00 14.00 Target achieved26-May Dish TV Cash Buy 90.00 107.00 78.00 17.00 Target achieved25-May Bajaj Finserv Cash Buy 1470.00 1740.00 1350.00 9.00 Booked 50% profit at 160025-May HCL Technologies Cash Buy 990.00 1130.00 930.00 -6.00 Stoploss triggered27-May Whirlpool Cash Buy 730.00 830.00 680.00 Open

Forthcoming Economic Events Calendar Date EventUS24-Jun MBA Mortgage Applications24-Jun GDP Annualized QoQ25-Jun PCE Deflator MoM/YoY25-Jun Initial Jobless Claims25-Jun Markit US Composite PMI25-Jun Markit US Services PMI26-Jun U. of Mich. Sentiment29-Jun Pending Home Sales MoM30-Jun ISM Milwaukee1-Jul MBA Mortgage Applications1-Jul Challenger Job Cuts YoY1-Jul Markit US Manufacturing PMI2-Jul Change in Nonfarm Payrolls2-Jul Initial Jobless Claims6-Jul Markit US Composite PMI6-Jul Markit US Services PMI8-Jul U.S. Fed Releases Minutes from June 16-17 FOMC Meeting10-Jul Wholesale Inventories MoM14-Jul Retail Sales Advance/Ex Auto MoM15-Jul Industrial Production MoM15-Jul Capacity Utilization16-Jul Initial Jobless Claims17-Jul Housing Starts MoM21-Jul Revisions: U.S. Industrial Production & Capacity Utilizaton22-Jul MBA Mortgage Applications23-Jul Initial Jobless Claims24-Jul Markit US Manufacturing PMI27-Jul Durable Goods Orders/Ex Transportation28-Jul Markit US Composite PMI28-Jul Markit US Services PMI29-Jul FOMC Rate Decision (Upper Bound)29-Jul FOMC Rate Decision (Lower Bound)30-Jul GDP Price Index30-Jul Initial Jobless Claims31-Jul U. of Mich. Sentiment/Current Conditions31-Jul Chicago Purchasing ManagerIndia30-Jun Fiscal Deficit INR Crore1-Jul Markit India PMI Mfg3-Jul Markit India PMI Services9-Jul Local Car Sales10-Jul Industrial Production YoY13-Jul CPI YoY14-Jul Wholesale Prices YoY24-Jul Eight Infrastructure Industries31-Jul Fiscal Deficit INR Crore


Page 14

NOTES:

• It is recommended to enter in a staggered manner within the prescribed range provided in the report

• Once the recommendation is executed, it is advisable to keep strict stop loss as provided in the report on closing basis.

• The recommendations are valid for three to six months and in case we intend to carry forward the

position, it will be communicated through separate mail. Trading Portfolio allocation

• It is recommended to spread out the trading corpus in a proportionate manner between the various technical research products

• Please avoid allocating the entire trading corpus to a single stock or a single product segment

• Within each product segment it is advisable to allocate equal amount to each recommendation

• For example: The ‘Daily Calls’ product carries 3 to 4 intraday recommendations. It is advisable to

allocate equal amount to each recommendation

Recommended product wise trading portfolio allocation

Allocations Return Objective Products Product wise

allocation Max allocation

in 1 stock Number of Calls

Frontline Stocks Mid-cap stocks Duration

Daily Calls 8% 2-3% 3-4 Stocks 0.50-1% 2-3% Intraday Short term Delivery 6% 3-5% 7-10 p.m 4-5% 7-10% Opportunity based Weekly Calls 8% 3-5% 1-2 Stocks 5-7% 7-10% 1 Week Weekly Technical 8% 3-5% 1-2 Stocks 5-7% 7-10% 1 Week Monthly Call 15% 5% 2-3 Stocks 7-10% 10-15% 1 Month Monthly Technical 15% 2-4% 5-8 Stocks 7-10% 10-15% 1 Month Techno Funda 15% 5-10% 1-2 Stocks 10% and above 15% and above 6 Months Technical Breakout 15% 5-10% 1-2 Stocks 10% and above 15% and above 3-6 Months Cash in Hand 10% - - - - -

100%


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Pankaj Pandey Head – Research [email protected] ICICIdirect.com Technical & Derivative Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai – 400 093 [email protected]


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Disclaimer ANALYST CERTIFICATION We /I, Dharmesh Shah, Dipesh Dagha, Nitin Kunte, Pabitro Mukherjee, Vinayak Parmar Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.

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ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. 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Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice. ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction. 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