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ICICIdirect

@ICICI_Direct

Mar 5

Moving averages is a time-tested tool used by technical analysts.

It helps eliminate the noise caused by daily price fluctuations and gives a smooth data set to take better trade decision.

Here's all you need to know.
Thread 🧵

Note: Nifty 50 component analysis at end.
1/n

2/n

There are 2 types:

1⃣ Simple moving Average (SMA or DMA):

Commonly used SMAs are the 20, 50, 100 and 200 day moving averages.

This price is simply computed by taking an average of the closing price for those number of days.

Eg: 50 DMA = Average of last 50 day price

3/
Let us consider and calculate 5 Day moving average of Nifty50 for the last week.

Here the latest 5 DMA of Nifty 50 is 17,413.

As you see, average of March 2nd and March 3rd is different. The trendline keeps moving to the latest data point hence the name “moving” average.

Read 14 tweets

ICICIdirect

@ICICI_Direct

Mar 3

Update: Axis Bank has completed acquisition of Citibank’s consumer business.

The Bank acquires:
🔸Rs 273 bn in assets
🔸Rs 400 bn of liabilities

for cash consideration of Rs 116.03 bn

Axis mgmt called it one the most complex acquisitions in India’s private banking history
🧵1/

2/
Implied Equity value is Rs 149 bn, indicating a acquired valuation of 17.7x P/E based on FY22 earnings.

Deal appears favorable as it aligns with Axis' premiumization strategy and gives access to Citi’s

- Huge retail deposit base
- Affluent and profitable consumer franchise

3/
Some takeaways from Axis Bank conference call:

🔸ROE for Citi business comes at 21.7% and hence this business would be RoE accretive.

🔸Axis Bank had ROE of ~13% in FY22 and annualized ROE of 19.8% based on Q3FY23 results.

Read 11 tweets

ICICIdirect

@ICICI_Direct

Mar 3

FIIs net short positions in Index futures is near decade highs. Are we set for a short covering rally?

A short note.
🧵

2/
After recent sell-off in Feb series, FIIs are net short on 1.3 lakh contracts. Such quantum of short positions was last seen in June 2022.

Historically, we have seen whenever net short contract reaches 1.3 lakh mark, market witnesses a short covering rally from lower levels.

3/
FIIs bearish positions through Options is near multiyear high.

The long Put OI seen on Feb 20th was the highest seen since 2016. In last 1 year, there are 3 instances when FIIs index long Put reached over 4 lakh mark.

Generally this marks a short covering rally.

Read 5 tweets

ICICIdirect

@ICICI_Direct

Mar 2

Our Gladiator stock pick for the month is:
✨Bharat Electronics (#BEL)✨

A Navratna defence public sector undertaking that's empowering India’s armed forces.

CMP: 97
Short Term target: 108
Support: 87

We have shared out techno-fundamental rationale in thread below:

1/n

2/n
#BEL Technical Outlook:
🔸Taking support at 52 Week EMA, which is expected to act as a good support

🔸Weekly stochastic has a positive crossover and in a rising trajectory

🔸Expect it to resume uptrend in coming weeks and head towards 110 which is 80% retracement of..

3/n
.. the entire decline of Sep '22 - Jan'23 (114-87).

About:
BEL is a leading Aerospace & Defense electronics company that makes advance electronic products.

Multi-product, multi-technology range:
🔸Radar
🔸Missile systems
🔸Electronic warfare & avionics
🔸Anti-submarine

Read 12 tweets

ICICIdirect

@ICICI_Direct

Mar 1

Ricoh India's revenue rose over 6 fold from ₹257 Cr in 2010 to ₹1,638 Cr in 2015📈

Share price surged 30x from ₹30 to ₹1,000 in the same period📈

But a fraud was detected🔻 and share got delisted

However, checking CFO/EBITDA ratio could've saved you

A thread🧵👇

[1] What is CFO/EBITDA Ratio?

CFO is Cash Flow from Operations

The limitation of EBITDA is that it has both cash & non-cash profits which might include profits due to aggressive revenue recognition policies

This ratio depicts %age of EBITDA that gets converted into cash

[2] What does it signify?

🔶 Measures what %age of profits is being generated into cash

🔶 A poor ratio might mean that company is unable to realize cash from debtors

🔶 Poor ratio might also be indicative of longer than usual credit period for debtors

Read 12 tweets

ICICIdirect

@ICICI_Direct

Feb 27

NSE is increasing the trading time window for derivatives segment

This will help Indian markets overlap with the international markets

Let’s quickly understand how:
🔶What does this mean?
🔶Which securities are these for?
🔶Why are they making the change?

A thread🧵👇

[1] What securities are these for?

This increase in timings is for Interest Rate Derivatives

The new trading hours would be 9AM to 5PM🕔

But this change is not for other derivatives

Keep on reading to understand if increased timings are in the offing for other segments👇

[2] Current trading hours?

Trading hours mean the time in which the market will allow an investor to buy and sell Securities💹

🔶The current trading hours are 9:15AM to 3:30PM
🔶There is also a pre-opening session from 9AM to 9:15AM

Read 14 tweets

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