CRYSTAL BALL - Invest Smart. Build Wealth. Enjoy Your Comfort Zone - Comfort Securities
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CRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
Monday
01st October, 2018
Enjoy Your Comfort Zone.
Invest Smart. Build Wealth.
CRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
Price Forecast
INSTRUMENT 30th Sept. 2018. 1 Month 2 Month 3 Month 1 year
SENSEX 36227 35000 35700 32500 40001
NIFTY 10930 10611 11351 9901 12001
USD $ / INR 72.48 73.5 75 76.5 69
GOLD 1196 1171 1201 1125 1501
SILVER 14.69 14.25 15.05 14.05 19
CRUDE OIL 73.56 75 80 85 75
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Invest Smart. Build Wealth. www.comfortsecurities.co.inCRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
Dear Valued Reader,
We are ready with our October-November-December 2018 forecast.
Welcome to first trading day of the October month. Now, before we start a brand new-innings of trading
this October 2018, let’s review how the major indices listed at Dalal Street fared in September 2018:
September 2018 market recap:
Sept. 2018 2018 %
Instruments LTP
% Change Change
Sensex 38645 -6.26% +6.37%
Nifty 10930 -6.42% +3.80%
BSE Auto Index 21476 -13.11% -19.72%
BSE Bank Index 27992 -11.81% -3%
BSE Capital Goods Index 17109 -9.94% -10.58%
BSE Consumer Durables 19134 -11.81% -15.67%
BSE FMCG 11503 -9.94% +7.55%
BSE Healthcare 15025 -5.77% +1.53%
BSE Metal 13279 -3.93% -11.11%
BSE Mid-Cap 14763 -12.55% -17.16%
BSE Small-Cap 14431 -16.07% -24.96%
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Invest Smart. Build Wealth. www.comfortsecurities.co.inCRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
Sept. 2018 2018 %
Instruments LTP
% Change Change
BSE Power 1929 -9.87% -18.99%
BSE Reality 1703 -20.48% -34.71%
BSE Oil/gas 14855 -1.48% -34.71%
BSE IT 15629 +0.52% +38.58%
Well, in the month of September, the benchmark Nifty & the Bank Nifty showed dismissal performance, down 6.42% & 11.81%
respectively. The negative takeaway is that the pessimism or the bloodbath was witnessed at Dalal Street despite a strong backdrop
from Wall Street in September month, as on monthly basis, the Dow and S&P 500 were higher by 1.9% and 0.4%, respectively.
Honestly speaking, 'Panic Attack’ from bears camp was primary theme in September for Dalal Street investors. And if we step back and
take a look at the bigger picture using the weekly/monthly charts of the benchmark Nifty, we foresee that there is more pain in the
system.
Yes, if September’s weak closing prices are any indication then we suspect; the bloodbath to intensify further as the bears have
completely taken over the charge and are now seen in commanding position.
This market has nothing to offer for October; but blood, toil, tears and sweat. Sorry to be gloomy, but there it is.
Now amidst this pessimistic backdrop, we now present our Oct-Nov-Dec 2018 forecast.
Enjoy Your Comfort Zone.
Invest Smart. Build Wealth. www.comfortsecurities.co.inCRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
Nifty: 10,930.
Sensex: 36,227. There is no point in bottom fishing in panic times like this!
The remaining 6-months of Financial Year 2018-2019 promises to be a challenging, and we strongly recommend
perma-bulls camp to continue applying cautious approach especially if there is any massive short covering buying
from current levels.
There is absolutely no encouragement for the bulls camp. Agreed that from time immemorial, investors' know that
they need to buy low and sell high. But after recent steep fall in stock prices, the landscape has deteriorated
significantly and there is no point in bottom fishing or catching a falling knife. Moreover, amid this uncertain
backdrop, we suspect, the ongoing selloff will continue as long as weak hands are flushed out of the markets.
Caution should be the buzzword at current levels because of the following backdrop:
1. Controversy surrounding Infrastructure Leasing & Financial Services (IL&FS).
2. Foreign funds continue with their exit on Dalal Street. Overseas investors have pulled out a massive Rs
21,000 crore (USD 3 billion) from the capital markets in September, making it the steepest outflow in four
months.
3. Widening India's current account deficit.
4. Strength in U.S economy. U.S markets look attractive to big investors amidst pickup in growth. The Fed
has also predicted another hike by December and three more in 2019. Growth and job gains have
been “strong” and inflation remains near the central bank’s 2%.
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Invest Smart. Build Wealth. www.comfortsecurities.co.inCRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
5. Surge in crude-oil prices on signs of tightening supplies. The big question: Will rising Crude-oil prices
play a black swan? The biggest macro risk for Dalal Street is the rising crude oil prices, as they are likely
to cast a shadow on retail inflation, leaving no room for RBI to go for interest rate cuts.
6. Ascent in U.S Dollar index. The U.S Dollar (against the basket of 6 currencies) continues to hover near its
highest level in 2018. Our markets could trade subdued as India is a key emerging market and is likely to feel
pain from strong US. Dollar.
7. U.S-China trade dispute seen escalating. No resolution in sight. Trade war is biggest concern as can hamper
global growth.
8. Rising interest rates, both in India and globally.
9. RBI policy stance?
10. A relatively narrow breadth at Dalal Street in terms of leadership.
11. Will there be further spillover effect and contagion risks from turmoil in Turkish Lira & plunging Argentina’s
Peso?
12. All worldwide investors eyes will be on Italy’s deficit size. Italy's economy is the third largest in the eurozone.
The proposed deficit is likely to push Italy into conflict with the EU’s deficit rules, and most importantly, with
the European Central Bank winding down its asset purchases, the street will anxiously want to know Itay’s
ability to raise debt without the purchasing power of the ECB.
13. Prolonged NPA crisis in the fluid banking space.
14. Rising inflation.
15. The Trump administration’s tariffs on imports from key allies may most probably send world financial
stock markets into a tailspin.
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Invest Smart. Build Wealth. www.comfortsecurities.co.inCRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
16. Stretched valuations in large cap stocks.
17. The slight below normal monsoon.
18. How long it will take for the growth to rebound?
19. Will there be any further upside surprises to economic growth??
20. A united opposition is likely to be a key negative catalyst dragging sentiments at Dalal Street.
21. The street will spy with one big eye on any populist reform programs like farm-loan waivers and farm-
support schemes ahead of 2019 elections that further fuels risk of fiscal slippages. Deficit figures in the
run-up to the 2019 general elections will command investors’ attention.
Dear investors friends, make no mistake about it, this is a bull market controlled by the bears. The technical
conditions have worsened significantly considerably especially after the mayhem witnessed in the mid-cap and
small-cap space. Now, after the dismissal performance by the bulls’ camp in the month of September 2018, we
expect any rebound is most likely to be a dead cat bounce, and perma-bulls camp will do good if they lighten their
long positions on any excessive strength.
To put it straight, at the moment, the bears are in total charge: fundamentally, technically & sentimentally. Please
note, the technical landscape will worsen considerably only if Nifty moves below 10,651 zone. If this most watched
support-level is violated on the downside then expect major downside risk in the system which can take Nifty
initially to psychological 10,000 mark and then aggressive targets located at 9,750 mark. Alternatively, if 10,651-
10,701 zone holds then Dalal Street would be the much preferred investment destination.
The only positive trigger on buy side for this month could be an amicable resolution on the trade war.
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Invest Smart. Build Wealth. www.comfortsecurities.co.inCRYSTAL BALL
M O N T H LY I N V E S T M E N T R E S E A R C H
Anyways, expect frequent shocks and volatility, as on one hand we have a deteriorating macro backdrop while the
domestic institutional investors are still seen stubborn and playing a much bigger role on buy side pumping
aggressively.
The gyan mantra for aggressive bullish traders is to watch out for corporates' coming out with
decent Q2 earnings. Prominent firms which could announce promising Q2 results are: Tata Elxsi, KPIT, Reliance
(RIL), TCS, Bajaj Finance, Dabur, Indusind Bank, Biocon, L&T Finance, Jubilant Foods, Larsen, Rallies, and JSW
Steel.
Among sectors, we prefer IT and Pharma sector while we have negative stand on Capital Goods, Autos, Banking &
NBFC space.
Among stocks, our preferred bets on buy side with 3-6 months perspective are:
1. MINDTREE (Current Market Price: 1033. Targets at 1201)
2. VINDHYA TELELINKS (CMP: 1293. Targets at 1751)
3. SUN PHARMA (CMP: 623. BUY ON DIPS. Targets at 701)
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DISCLAIMER: This is solely for information of clients of Comfort Securities Ltd. and does not construe to be an investment advice. It is also not intended as an offer or solicitation
for the purchase and sale of any financial instruments. Any action taken by you on the basis of the information contained herein is your responsibility alone and Comfort Securities
Ltd. its subsidiaries or its employees or associates will not be liable in any manner for the consequences of such action taken by you. We have exercised due diligence in checking
the correctness and authenticity of the information contained in this recommendation, but Comfort Securities Ltd. or any of its subsidiaries or associates or employees shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this recommendation or any action taken on
basis of this information.
Technical analysis studies market psychology, price patterns and volume levels. It is used to forecast future price and market movements. Technical analysis is complementary to
fundamental analysis and news sources. The recommendations issued herewith might be contrary to recommendations issued by Comfort Securities Ltd. in the company research
undertaken as the recommendations stated in this report is derived purely from technical analysis. Comfort Securities Ltd. has based this document on information obtained from
sources it believes to be reliable but which it has not independently verified; Comfort Securities Ltd. makes no guarantee, representation or warranty and accepts no responsibility
or liability as to its accuracy or completeness. The opinions contained within the report are based upon publicly available information at the time of publication and are subject to
change without notice. The information and any disclosures provided herein are in summary form and have been prepared for informational purposes. The recommendations and
suggested price levels are intended purely for trading purposes. The recommendations are valid for the day of the report however trading trends and volumes might vary
substantially on an intraday basis and the recommendations may be subject to change. The information and any disclosures provided herein may be considered confidential. Any
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future returns. There can be no assurance that investments will achieve any targeted rates of return, and there is no guarantee against the loss of your entire investment.
POTENTIAL CONFLICT OF INTEREST DISCLOSURE (as on date of report)
Disclosure of interest statement – • Analyst interest of the stock /Instrument(s): - No. • Firm interest of the stock / Instrument (s): - No.
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