Tuesday 2 October 2012

Morning Bells (03 Oct 12)


Good Morning Friends.

The world suffers a lot… Not because of bad people… but because of the silence of good people.

Once again political drama is taking place, DMK have joined the hands (could be a Kannimozi effect) but as long as I see there is no threat to Govt. in current scenario as UPA+M2 = 283, +10 to magic no. but yes the match can be interesting after Diwali.

Well bears are eagerly waiting for a miss from bulls so some amount of consolidation is expected, traders too looking for profit booking this week after current rally and on any weakness bears can make strong attempt to pull Nifty below 5650.

Well, GAAR report submitted and now one needs to wait for the guidelines to come, it would be another trigger for quite positive move. Govt. has indicated that it will take decision in 20 days timeframe.

Brend Crude is falling which will give time being relief to our Govt. and will support in Rs. appreciation. So all is positive except people are expecting correction to move further, say to make new high.

Here is some news which are not in favour of Indian market, so please keep close eye on further development and specially on Nifty levels to save your earnings last month. It would be  better to keep cash for further buy instead of loosing.

1. The four-month long monsoon season in India has drawn to a close, leaving the country with a rain deficit of 8%, data from the India Meteorological Department showed. Monsoon rains were 8% less than 50-yr average in 2012, the IMD said on its website.
2. The HSBC manufacturing purchasing managers' index (PMI) stood at 52.8 in September, unchanged from August, which was a nine-month low.
3.  India's merchandise exports fell by nearly 10% in August to US$22.3bn while imports fell by ~5% to US$38bn, government data showed on Monday. 
4.  After the exit of the TMC from the government, the new second largest party in the UPA, the DMK, has said that it wants a rethink of the government decision to allow FDI in multi-brand retail
(Reports – IndiaInfoline.com)

Oh!... now good news for mid to long terms bet –

1.  India is the fifth best country in the world for dynamic growing businesses according to the Grant Thornton Global Dynamism Index.  India sits ahead of Indonesia, Nigeria, Turkey, Singapore, Colombia, Russia and only trails Argentina, China., Uruguay and Chile
2. Moody's Investors Service said on Monday that the upcoming recapitalization of Spanish banks is credit positive, but warned it might not be sufficient.

China market is closed for whole week and HongKong market was closed on 1&2 Oct. So market move was cautious. We will again see range bound sessions next 2-3 days. Next trigger could be on Thursday later part or on Friday. Another view is – market remain range bound throughout week and then will see how China opens on Monday.

As already told that now its time to see progress on reform announcement, expectation for further reform announcement and more importantly market will wait for September inflation numbers as they will play a part in the RBI's rate decision in its next policy review meeting,.

This week Auto and Cement stocks will remain in focus as companies from these two sectors will announce their monthly sales volume data for September.

So once again, October series is full of promises and various actions globally. This is also month of corporate earnings so market will remain full of thrill. On global front any move from China to support its economy will be an added positive, particularly for commodities.

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

MARKET OUTLOOK
I am bullish on market as trend is still buy on dips, many chartist and tech experts are believing in bull-bear cycle which giving TG for Nifty in Oct. is 5400 Mark. To my view 5600 is like concrete support and would be strong support for bulls on closing basis. Yes but small dip would change the equation for FNO traders.

Market trend remain buy on dips, so small correction could be used to make fresh entry at lower levels till 5600 is not broken out.

As told close above 5740 will lead to break 5800, could be 5830-5850. So probably I expect in the next two-three days we see another 50-70 points get added to the Nifty.

Good news is that – FII has pumped more than Rs 19 K crore (USD 3.5 billion) in the Indian stock market in September, the highest monthly inflow in seven months, was the reaction of bold economic reform initiatives taken by the Govt.

So probably Oct series is going to remain in 200 pts range, First attempt could be close above 5740 then Nifty will enter to crucial range 5740-5775, I will say watch it carefully and if something comes boosting then we can head 5830-5850-5900 else market can take back from this range to test 5650-5600 mark. So development in upcoming days will confirm the mood of market. But as far as I see it’s a around 200 pts series.

NIFTY

Vix is up 1.1% to 16.34 and Nifty PCR 0.92, Bank Nifty PCR – 0.87

Resistance 5740 – 5771 - 5830 and Supports 5714 – 5683 – 5672 - 5614.

Opening seems positive say around/above our first resistance level, thought SGX Nifty is down.

STOCK OUTLOOK -
(Stock outlook needs to watch stock movement carefully and then one can bet after having a look, I tried to put related info which can decide stock move either side.)

My top pick for next 3 months are – Cement, Infra & Banks (after small correction in banks) – yes not blindly to any stock, in select good stocks only.

Brent crude - can clipped to 105$ and could remain in the range 105-111 for Oct. series.

KFASeems troubles are just behind of stock, after failing to assure its lenders with any 'concrete' solution for restructuring of debt (Company has total loans of around Rs 7,000 crore.), Now management has declared partial lock-out till Thursday. I had already warned to stay away from stock times being till aprx 20% correction. Since past 3 sessions there’s no buyer for stock. So one should wait till Diageo deal finalization.

There’re also media reports saying Air India should be partly privatised while Civil Aviation Minister Ajit Singh recently ruled out any move to privatise Air India as Govt. was pumping in Rs 30,000 Cr. for its restructuring

CoalGate CBI today started probe against 24 companies and public officials in connection with alleged irregularities in coal block allocations between 1993 and 2004, including during the NDA regime. Now this game going to be interesting, so keep close eye on development, could be a good gain if you closely watch development in CBI probe.

The Coal Ministry has written to public sector firms, which were allotted mines, to present their case before the IMG on October 9 and 10.

Banks Govt. has decided to give interest subsidy of 2% a year to all state owned banks for farm loans upto Rs 3 lakh in 2012-13. Finance Minister proposed to continue the interest subvention scheme for providing short term loans to farmers at 7% p.a in FY13. Public sector banks (PSBs) generally charge 9% rate of interest on farm loans. Lenders can now claim for 2% back from the government of India while disbursing such loans at 7%.

Keep eye on Dhanalaxmi Bank and YES bank for short to midterm bet.

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 while IT heavyweight seems under pressure.

Infy - is in talks with the West Bengal government for setting up a campus and hope for result is positive. This will also help WB in change over its image as IT business hub. (Reports PTI) Infy is on move.

Insurance and PharmaFII now eying on further reforms in sectors like insurance and pharma, so next big earnings can come into both sector.

OPEN CALLS

Nifty 5900CE - @31 for TG 55+ SL 15

TM 300CE - @3.75 for TG 4.5-5+ SL 2.25

DhanBank - @55 for TG 70 SL 45

Jindal Photo - @145 for TG 160+ SL 130

PFC - @187 for TG 198+ SL 176 (short to midterm bet)

Titan - @260 for TG 265++ SL 247

Today’s MG Mantra
Since all are talking for correction and big crocos can take advantage so it would be wise to keep strict SL for all your longs and wait for close above 5740-50 mark to book part profit.

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.

19 comments:

  1. good morning friends...have a nice day..

    ReplyDelete
  2. A high-level committee, headed by HDFC Chairman Deepak Parekh, will tomorrow submit its report to Prime Minister Manmohan Singh on funding of infrastructure sector, the requirement of which has been estimated at close to USD one trillion during the 12th Plan period .

    Source: MC

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  3. Why is the 5900 CE call price going down although Nifty is up?ANy ideas?

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  4. TM call is on hold till next cue

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  5. Nifty Future: Will it take 5900 or 5560 ??

    MG, Since Nifty Put price are increasing but call price is decreasing, I think nifty will see some correction this week. It might touch 5600 or even 5560.

    What you think?

    ReplyDelete
  6. Hello MG,
    Morning :)

    I am buying RIL 820 put... is it ok?

    ReplyDelete
  7. CLSA has downgraded INFY CMP by 25%

    ReplyDelete
    Replies
    1. Thanks Kris, yes I am watching it, its fear ahead of result and mkt is down due to Infy fall, RIL balancing it else fall was sharp

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    2. jst got d news..Spain Service PMI falls to lowest since Nov 2011

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  8. JLR sales up 20%!!!.....Sir what is your view on this???

    ReplyDelete
    Replies
    1. Already told y'day when someone posted domestic sales down 4% that TM is safe till JLR nos are safe, TM is down due to choppy mkt, only weakness in Infy and Bankex is putting pressure.

      Most probably mkt remain range bound today, may on a bit lower side.

      Delete
  9. Sir,
    As you said banks,cements and infra look good in your M-bells. Which cement sector stock could be bought into at current levels, or should we wait for a correction in the markets for making fresh longs?

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  10. Sir
    Should I buy TM 300 call @ 2.75 ??

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  11. Cement - ACC & Ambuja both doing well.

    TM - I am on hold and hope it will recover if mkt shows strength.

    ReplyDelete
    Replies
    1. This comment has been removed by the author.

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  12. Hi MG,

    Got some news about bajaj corp. planning to buy tomorrow for 2-3 days with 10-15% gain.

    ReplyDelete