Morning Bells (27 Sept 12) - Sept Expiry

Good Morning Friends,

Opportunities are equal for all but the difference is – successful person gives results & unsuccessful person gives reasons.

So finally we have reached to expiry. It was third consecutive day when Nifty stuck in a narrow range. Y’day bulls tried to pull the Nifty but global market dampened the sentiment.

Well today there’s no thought (on domestic front) because its expiry day and it remains out of various logic.

Yes after expiry now market will look for weakness in global markets and concerns about the EU debt crisis. Ongoing debt crisis in Europe would keep some amount of uncertainty within the markets. Y’day Global market fell down to deep RED. European equity markets are nervous on the simultaneous occurrence of events, they also look for rally in currency too but currency is not participating compared to equity market and that’s a real worry for global investors. Investors should never trust a rally in the stock market unless it is accompanied by a rally in currency. So now we will also look for appreciation in Rs.

Another major lookout is China; Chinese shares fell to their lowest level in more than 43 months on Wednesday amid worries about the health of the world's second largest economy. China’s economic growth is likely to slow for the ninth consecutive quarter in July-September, China’s economic data for August has turned out to be worse than expected and the economy’s prospects remain gloomy, according to Chinese economic experts.

So next stimulus could be from China, Markets are now focusing on whether China will inject more stimulus by way of more infrastructure spending or a rate cut.

MARKET OUTLOOK –

Right now market is in No trade zone till it remain in the range 5650-5720.

We are in Sept series expiry, from last 3 sessions neither bull getting success to close above 5700 mark nor bears getting success to close below 5650 mark. This series is quite painful for bears as they tried 2 times to brace the bull run but failed.

Longs were rollover to next series and that’s its giving feeling for a dull expiry, however market will remain volatile say in 50 pts range, if bears get fail in the first half then bull will on run in second half. Most probably expiry seems around 5650-5700 but as told there’s no logic on the day of expiry like this one. If some of you would have remember my reply to Guru Prasad ji 2 days back, it was –

"We can have same session (todays) and can keep Nifty range bound i.e. around or below 57 mark, this way all nearby premium will be reduced aprx 40-50% and then last day it can make a move."

This thought has now come to reality.

NIFTY –

PCR come to 0.97 while India Vix fallen down to 16.97. 5800 CE has highest open interest of 86 while 5700CE has second highest OI of 63 Lacs with fresh addition of 14 lac shares. On other side 5600 PE has highest OI 86 lacs with fresh addition of aprx 8 lac shares. If you would have remember my view few days back, I had told you that bulls are cementing 5600 mark and that’s expiry was seem between/around 5650-5700. OI suggest once again it could be a narrow range (50 pts) expiry. Market will remain volatile ahead of expiry.

Resistance has come to Resistance 5678 – 5692 - 5712 and Supports has come 5639 - 5609. Close below 5585 will favour bears. And any close above 5740 will extend current rally to 100 points.

Opening seems mildly negative ahead of expiry pressure. First half seems range bound and under pressure, So it would be better for short position to windup before any wave fade out their gains.

STOCK OUTLOOK -

Banks – Banks are on the move.

IT – Investors are entering to mid-cap IT industries on expectation that it will outperform in near future while large cap seen some pressure y’day.

OPEN CALLS –

Cox&Kings – Y’day made high 146 and I had already suggested y’day to close the call.

So right I don’t have any open call today. New calls in fresh series from Monday.

Today’s MG Mantra –

Its expiry, if you have tight grip on stock movement then can test else stay away.

Have a Profitable day – MG

Disclaimer – I have shared my view as per my limited knowledge; please use your own skills before making a wise decision.