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NIFTY’s PREDICTION and ANALYSIS by experts for Wednesday, Q2 results of Tech Mahindra and Cognizant, Indian Markets end up lower but holds crucial support…. Market updates for 30/10/18

PurpleTrades - stock market courses > News > NIFTY’s PREDICTION and ANALYSIS by experts for Wednesday, Q2 results of Tech Mahindra and Cognizant, Indian Markets end up lower but holds crucial support…. Market updates for 30/10/18

Report by- Sabyasachi Bhattacharya

 

Tech Mahindra announced their Q2 results; Profit rises by 19% to Rs 1,064 crores-

Tech Mahindra reported a consolidated net profit of Rs 1,064 crore for the September quarter, a rise of 19 percent quarter on quarter from Rs 898 crore. The results managed to beat Street estimates. Analysts polled by Reuters, on average, expected revenue of Rs 8,605.8 crore and profit of Rs 1,003.7 crore. Let us take a look at the key insights of their report-

  • The revenues rose 4 percent at Rs 8,630 crore against Rs 8,276 crore during the previous quarter.
  • The Mahindra Group reported dollar revenue of $1,218.2 million.
  • The consolidated earnings before interest and taxes grew 23 percent to Rs 1,324.3 crore from Rs 1,076.1 crore reported during the June quarter.
  • The consolidated EBIT margin rose to 15.3 percent a rise of over 2 percentage points from 13 percent quarter on quarter.
  • The company reported an attrition rate of 20 percent, a rise from 19 percent during the previous quarter. It also said that it added 4 clients during the quarter, ending the reported period with an active client count of 930.
  • The strong deal wins especially in the Communication vertical coupled with our 10% plus sequential growth in digital revenues are a validation of our Run, Change and Grow strategy. 
  • Barring declines in their implementation business in the healthcare vertical, they have clocked a good quarter in terms of both revenue growth and EB/DTA margin improvement.

 

 

 

 

Let us take a look at the company’s Q2 report-

 

Source- MoneyControl, Purple Trades Research Department 

 

Cognizant announced their Q2 results; Revenue rises by 1.74%-

Cognizant Technology Solutions Corporation on October 30 reported third-quarter revenue of $4.08 billion, up 1.74 percent from the previous three month period. The Teaneck, New Jersey-based technology services firm said it expects fourth-quarter revenue in the range of $4.09 billion to $4.13 billion. This translates to a sequential growth of 0.25-1.23 percent. Let us take a look at the key insights of their report-

  • The revenue includes a negative foreign currency impact of 70 basis points, Cognizant said.
  • Net income in the September-ended quarter was $477 million, up 4.6 percent from $456 million in the previous quarter.
  • Operating margin was 18.1 percent, up from 16.7 percent in the previous quarter.
  • The company attributed the margin rise to improvements in its business over the last almost two years, depreciation of the Indian rupee and emphasis on digital services that are helping Cognizant win more business with attractive margins.
  • Digital revenue grew in the low 20 percent range, the company said.
  • Quarterly GAAP diluted earnings per share was $0.82, up from $0.78 in the June-ended quarter.
  • The Communications, media and technology business clocked a growth of 17.1 percent year on year (YoY), products and resources rose 11.5 percent, and healthcare was up 9.6 percent.
  • Cognizant added 5,300 employees during the quarter, and 14,200 employees so far in the year. The total company headcount as of September 30, 2018, was 274,200.

 

Source- MoneyControl, Purple Trades Research Department 

 

 

Indian Indices lose steam as Nifty moves in a range-bound fashion-

Chart source- Upstox

Indian Markets remain flat on the levels between 10,300 and 10,200 as Nifty lost about 50 points intraday. As expected and predicted by our experts in Purple Trades Nifty was supported by the levels of 10,200 and 10,280 was seen as a resistance, our experts calculated the resistance to be around 10,300 only. It’s was a negative close for the market and the Nifty has managed to close below 10,200-mark. Benchmark indices were trading lower in the afternoon trade on Tuesday with Nifty is hovering around 10,200 level. At the close of market hours, the Sensex is down 176.27 points or 0.52% at 33891.13, while the Nifty is lower by 52.50 points or 0.51% at 10198.40. The market breadth is narrow as 1,472 shares advanced, against a decline of 1,066 shares, while 1,104 shares were unchanged. Infosys, State Bank of India, Tech Mahindra and Zee Entertainment are the top gainers, while IndusInd Bank, Coal India, and HPCL have lost the most.

Nifty moved in a range of 10,200 and 10,300 as predicted yesterday by our experts in Purple Trades. To read the predicted report click below-

 

Let’s take a look at the performance of major Indices-

Global markets were trading in the Red as US Index NASDAQ was seen going downwards. Even the European markets were hit by the BEARS as both DAX and CAC were seen in the RED. Only Index was the Tokyo Index NIKKEI which was seen in the GREEN, otherwise Strait Times was also seen in the red.

 

Source- MoneyControl, Purple Trades Research Department 

 

Let’s take a look at the two key reasons why Nifty moved lower today-

  1. Bearish divergence-

As we can see on the 5 mins chart there is a clear BEARISH Divergence seen on the charts after the Index touched the highs of 10,280. From there on the market was expected to move lower due to the divergence pattern. Divergence is nothing but the deviation of price patterns with Indicator data. The markets was seen falling to the levels of 10,200 before finally consolidating there.

 

 

  1. Head and Shoulders pattern-

As you can see on the chart, there was clear HEAD and SHOULDERS pattern on the 5 mins chart. Once the price moved below the lower horizontal line it was expected that selling pressure will continue for the rest of the day. This pattern is not often visible on charts but it is a very powerful indication that the BEARS might take charge soon.

 

 

 

Let’s take a look at the EXPECTED movement of NIFTY for tomorrow-

 

  1. Option chain analysis-

Let us do some Option Chain Analysis to understand how Option Writers are looking at the markets tomorrow. As you can see the ATM strike for us is at 10,200. This level was already deemed as highly crucial for the Traders as this was termed as a crucial Support by our experts. Now as we can see on the right side of the 10,200 level, 30 lakh contracts have been opened by the PUT Writers. Hence they expect Nifty to stay above that level. If Nifty stays above that level then we can expect the crucial resistance at 10,300 levels and 10,400 levels as the cumulative OI for these levels is 17 lakhs and 13 lakhs respectively. Now as we know that markets are highly unpredictable at times, so if Nifty moves down and breaks the level of 10,200 then the support will be provided by the levels of 10,100 and 10,000. Our experts in PURPLE TRADES  advice investors to keep a tight stop loss at the levels of 10,175. If markets move below the level of 10,175 then there is no upside for the market and it will crash to the level of short term support of 10,100. But the main support is going to be 10,000 as it has a cumulative OI of 42 Lakhs.

 

 

  1. Support level provided by 200EMA-

As you can see on the chart given above. Nifty was seen consolidating at the levels of 10,200. The 200EMA provided a crucial support to the falling Index. As you can see on the chart above 200EMA has a value of 10,185. Hence we can see that Nifty can bounce back from these levels. But if Nifty crosses below the 200EMA then we can see further selling in the Index. Hence our experts in PURPLE TRADES  advice the traders to put a stop loss at the levels of 10,175. If Nifty falls below 10,175 then there will be a lot of selling pressure by the BEARS. But if Nifty respects the 200EMA and Option chain data then we can see it go up to the levels of 10,300 also.

 

Top sectors that moved the market today- Data source- Moneycontrol

 

 

Top Gainers for today-   Data source- Moneycontrol

Top losers for today- Data source- Moneycontrol

 

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