CNI Publications; Weekly Plattern

Weekly summary

Editorial Vol -1, No-I, 01 Dec, 2017, 08 pages

In our saturday newsletter and YMV we had

categorically said that market will correct on
MONDAY though the reason assigned will be knee Change of the week
jerk on S and P no upgrade. This is purely for rolls.
Post rolls everything will rotate on rate issue and then
GUJ elections. Range of 10000 and 10800 seems
01-Dec-17 Rise /Gain
order of the day.
Sensex 32832 820
AHD based co which is huge cash surplus is looking
to enter API but not getting proper suit. API business
is HOT and hence I suggest my followers to enter Nifty 10121 262
value API stocks. I am not naming any stock but have
a look at turnaround cases which will make your life.
Wherever co's have been reporting losses and have
turned the corner should be the best choice as such Net Investments (` Cr)
stocks will be definitely available at bottom of the FII DII
cycle. 27-Nov-17 3003..8 69.4

It was a off day for the street and whole street was 28-Nov-17 784.3 (428.1)
worried where the market is heading. There is no 29-Nov-17 (622.4) 771.0
change in my opinion. Range will be maintained that 30-Nov-17 (1500) 1202.5
is 10200 and 10500. I still believe that 10500 will not
01-Dec -17 306.5 176.1
cross in this expiry. Next settlement, we may see
range of 10200 and 10800. Total 1968.5 1791

NUTRAPLUS has reported good set of nos. Co has

reported Rs 24 crs sales for the Q2 as against Rs 15
crs and PAT too positive after 2 bad quarters. Let us Turnover (` Cr)
hope the turnaround will be good for the co. There
were few scrupulous traders who had spread every FII DII Combined
kind of possible bad news in the co but co has seem
shut their mouth with right kind of nos 01-Dec-17 74,076 38,867 112,943

This is one of the beneficiary of API game. Relying on

unsolicited vested advise will deprive you from your
profits hence you should always do proper due 01-Dec-17 Advances Declines Ratio
diligence before you buy any stock for that matters. BSE 1010 1696 0.59
EVEN SEBI recommend proper due diligence before
buying shares. Courage is required to see stock
grow. Goodricke which was spotted in early hundreds
by us has now crossed Rs 500 mark is on the way to
cross 1000 mark soon thereafter it will be talked
about every broker as MNC buy.

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 We had given a perfect range on Nifty 10000 and
10500. We will be booking profit in Nifty around 5 Top Gainers
10450 480 levels. We still do not see Nifty crossing
10500 tilk tomorrow even though Dow was up 255 Stock 01-Dec-17 27-Nov-17 % Gain
points and Sgx 50. US was up despite North Korea VIDEOCON 16.1 12.8 25.2
firing another missile. RELIGARE 58.5 47.8 22.2
HATHWAY CABLE 41.9 34.7 20.7
We will have range of 10000 and 10800 for Dec
2017. We will update correct position in last 8 days of L&T TECNOLOGY 1099.3 928.9 18.3
the settlement. DEN 100.4 90.5 10.9

Lic is investing in railways which has sparked good

rally in railway stocks. Now sources says there will 5 Top Losers
good amount of provisions in railway budget for
expanding network much faster which will help Stock 01-Dec-17 27-Nov-17 % Loss
signalling and cables co. Also there will be beginning ADANI TRANSMIS 174.2 201 13.3
of allowing foreign companies to bid for railway RELIANCE NAVAL 38.9 44.0 11.5
infrastructure building with rider of domestic INDO COUNT 114 128.3 11.1
component of 70 pc. Thus the rail rally will continue
till Budget. UJJIVAN FINA 376 415.0 9.4
11300 target we may see in Feb 2018 after budget. REL COM 12.3 13.5 8.4
The personal income rate rate will come down to 25
pc this year and with a road map to bring down to 20
pc in next couple of years. The fall in rate is logical
conclusion of GST. Also chance to slab rise to Rs 10
Top 5 Picks By CNI 'A' Group
lacs is not ruled out. We also expect some bold
measures in the budget to push digitisation and white Company
economy further.
VEDANTA
In 2006 many Fii had invested in Indian cos without ICICI
even verification of plants. In fact, some investments
were made only on fax confirmations. I think the days SBI
are back a getting blocs have become difficult. TATA POWER
Recently an overseas investor has indicated rhatcitvis
ready to put in rs 355 crs for a co which currently BAJAJ AUTO
trading at just 100 crs market cap.

Big brokers are out in the market looking for QIP even
not so good stocks. I have come across 3 cases
Top 5 Picks By CNI 'B' Group
where QIP is happening. QIP is the simplest way of
getting transferable shares in bulk. And for that Fii are Company
ready to pay premium.
TORRENT POWER
Trade deficit played to root cause but we believe NLC
GDP data will be better than expected which will
reverse market tomorrow. COSCO
MULTI BASE
Keep a watch on DLF AND JAIN IRRIGATION.
PODAR PIGMENT

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Market closed above crucial level of 10100. Chances of nifty closing below 10100 is less but if it breaks than
we may see 10000 level.

Tata motors looks good around 400 levels.

DLF can buy around 220.

Sagar cement looks good for long term. Do ur due diligence before investing.

Cni Research Limited www.cniglobalbiz.com

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Next Weeks Events

Monday, 04-Dec-2017

Factory Orders
4-Week Bill Announcement

Tuesday,05-Dec-2017

International Trade
-

Wednesday,06-Dec-2017

Bank Reserve Settlement

Productivity and cost

Thursday,07-Dec-2017

Jobless Claims
Bloomberg Consumer

Friday, 08-Dec-2017

Consumer Sentiment

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Global Story

The most difficult question has come before every one after the straight big fall of over 800 points in 2 days. This is over
2.5 pc and 3 pc from the top. Before we discuss the market trend please note the first big fall was on the expiry day
followed by the first day first show. This is really not unusual. FII and DII both figures were positive, Dow had the biggest
rally over 300 points yesterday and GDP now were much above street expectations yet the market fell like a pack of cards
reminding you all the presence of the Ghost. DOW fell over 400 points on FRIDAY only to close at just 40 points minus.

After the market closed there were analysts comments which read as under......

"They expect 30 to 50 pc correction in stocks which have rallied on 2020 earnings forecast. They also expect 10 steep
corrections in market. Having seen 3 pc corrections another 7 pc correction expected."

Sounds really good especially when there was less rollover than expected. 10260 was the big stop loss which was
already triggered on Thursday with margin call triggering on the same day. Then what was the reason for Friday's fall ...?
With DII and FII net buyers clearly it was short selling by traders and delivery based selling by the Ghost.

We had given range of 10000 to 10800 in Dec. We had also indicated profit booking on good results of Gujarat elections.
We are approaching to 10000 very fast. At 10000 we should be completing 4 to 5 pc correction.

We had earlier explained that corrections could be either 1 to 2 pc, 4 to 5 pc and finally 10 to 11 pc. First correction is
already completed. We may even complete second kind of correction hence we should be ready for the eventuality.

We do not believe market will head for

third correction as there is no material negative which is generally pre cursor to the third correction of 10 to 11 pc.

The correction which happens on the expiry day followed by first day of the next settlement in fact could be the biggest
cycle of recovery. The reason is very simple. In Nov market corrected till 10100 and then rallied to 10450 killing all bears.
Bears did not wait for the last day and also did not roll shorts. This was good enough reason for the bulls to square off
long. Market drivers are not fool to build fresh positions at premium on the first day and hence the fall was justified. Hence
they allowed fresh shorting so that bears are trapped again and bulls got positions below 10200. 10260 will remain tipping
point for the bears and good opportunity to bulls for accumulating positions at will. Mind well, in bull market corrections are
always short lived and recovery will always be V shaped. There will not be any opportunity to bears to cut short in
reversal. Then only the new highs are formed.

They might even change the game now with high volatility. They will allow markets to consolidate between 10000 and
10260 for next 2 weeks. In that case you will see flare up after 18th Dec 2017.

Is there any change in fundamentals....?

Earnings were better than expected. Moody upgraded India. MF and DII getting continued inflow, In UP bye poll elections
BJP made clean swipe. BJP is hot favourite in Gujarat. Reforms will start after Gujarat elections. Thus there is no change
of fundamentals hence the market direction will not change. Traders go by the screen behavior and hence they will always
remain in confused state. Also as reported earlier media has started projecting popularity of PATEL in the social media
which will be tonic for market volatility.

As regards OIL travelling towards 70 USD it makes no difference for the market. When OIL had tested 35 USD Nifty never
tested 10000 hence OIL factor is illusive. India has 6 months OIL reserves hence any flip upside in OIL will never change
the INDIAN economy out of blue. Therefore the reaction was one of the triggers of sentiments for creating volatility. Even
the 96% fiscal deficit reported in media we feel will not dither INDIAN markets from going up. This is again notional as
Govt will meet the fiscal slippage. This has been happening every year but in the Budget we always see Govt meeting the
fiscal deficit. This is because many factors are not taken into account such as Dec tax collection, march tax collection,
disinvestment proceeds and GST collections etc. The end results will be positive and markets will rally. These are the

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ghosts created to justify the fall. When market rise again 1000 points say in next 2 weeks will the OIL and deficit factors
get reversed...?

What investors should do...?

We do not agree with the analysts for 10 pc correction but we admire such bold analysts who are the backbone of the
system. This analyst helps bulls. We need more such analysts with large followings. Till Wed there was no one talking
about correction and after 800 points fall there is no one talking about market rally. This is the TRUE Indian market.

At the same time we agree with him that 20 21 earning factoring is suicidal. It is only retail who enter at such valuations
not operators. Operators have entered at 2017 valuations and by creating fancy and booking some profits they are at
2008 valuations. Thus only those idiot investors who enter at unsolicited valuations only because stock runs circuit to
circuit get trapped.

Traders want to become millionaire overnight hence this kind of desperation. CNI never advocate this kind of speculative
trades. CNI recommendations are based on 2018 earnings forecasts hence you always see stocks not falling when
market falls. They even do not run in mad scramble. CNI stocks give margin of safety and consistent returns.

We will be advising buy on every dip till 10000 so that investors can make10 to 20 pc on bounce back. In fact, you will get
the best guidance from CNI team in falling market.

The only problem is that traders will not be able to add more as they will be busy managing their mark to market on over
leveraged positions. Those who are in cash must buy stocks which fail to fall in this crash. They will be first to bounce
back. Alternatively buy stocks which have given excellent q2 nos are available as turnaround cases. Please note that the
tendency of the retail investors in such panic times is always to sell stocks which are in profit and hold stocks which are in
loss. This is how we can see tons of JP's and Suzlons getting accumulated in the DMAT whereas there is no MARUTI in
the DMAT. This is the most common feature.

Avoid leveraging, have conviction and buy stocks at will where the PE ratio is below 15 on 2018 earnings where even
layman can say you cannot go wrong. If you buy stocks at 15 BV and 50 PE you only are responsible for the losses if any.
There are many stocks which are trailing at 12 to 15 times of B V and at 50 PE yet traders love these stocks for 3 reasons
one the operators behind such stock, huge volumes attract them and media support makes such stocks popular picks.

In falling market you should have a look at stocks like NUTRAPLUS pure API company. Co has turned in Q2, co has
come out with NGT issue, co has got working capital from bank and promoters are buying stock warrants at Rs 40 ( all
these are from BSE website ) and stock has just moved above 200 DMA with volumes. Try to make an attempt to meet
the management to understand the future prospects of the co and your investment decision. (we have vested interest in
the co )

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Global Indices

Country Indices Date Index Net Change Change %

Hong Kong Hang Seng 01/12 29,074.24 -103.11 -0.35

Singapore Straits Times 01/12 3,449.54 +16.00 +0.47

United States NASDAQ 01/12 6,847.59 -26.39 -0.38

United States DJIA 01/12 24,231.59 -40.76 -0.17

United States S&P 500 01/12 2,642.22 -5.36 -0.20

Japan Nikkei 225 01/12 22,819.03 +94.07 +0.41

United Kingdom FTSE 100 01/12 7,300.49 -26.18 -0.36

Malaysia KLSE Composite 01/12 1,717.86 -2.52 -0.15

Indonesia Jakarta Composite 01/12 5,952.14 -109.23 -1.80

Thailand SET 01/12 1,699.65 +2.26 +0.13

France CAC 40 01/12 5,316.89 -55.90 -1.04

Germany DAX 01/12 12,861.49 -162.49 -1.25

Argentina MerVal 01/12 26,941.63 +36.37 +0.14

Brazil Bovespa 01/12 72,264.45 +293.46 +0.41

Mexico IPC 01/12 47,265.30 +172.85 +0.37

Austria ATX 01/12 3,328.10 -16.84 -0.50

Belgium BEL-20 01/12 3,964.28 -19.82 -0.50

Netherlands AEX General 01/12 535.57 -4.54 -0.84

Spain Madrid General 01/12 1,020.37 -12.67 -1.23

Switzerland Swiss Market 01/12 9,274.55 -44.22 -0.47

Australia All Ordinaries 01/12 6,075.52 +18.31 +0.30

China Shanghai Composite 01/12 3,317.62 +0.43 +0.01

Philippines PSE Composite 01/12 8,144.02 -110.01 -1.33

Sri Lanka All Share 01/12 6,411.84 +6.31 +0.10

Taiwan Taiwan Weighted 01/12 10,600.37 +39.93 +0.38

East Israel TA-100 01/12 1,329.81 +0.42

+5.57

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