Tuesday 16 October 2012

Morning Bells (16 Oct 12)

Good Morning Friends.

My Friends Vivek’s Quote from Bhagwat Geeta – Tu karata wo hi he jo tu chahata he, par hota wo hi he jo mein chahata hoon… Isliye tu kar wo hi jo mein chahata hoon, fir hoga wo hi jo mein chahata hoon. (My words specially for option traders.)

Markets ended with slim gains on Monday, started the week on a slightly positive note despite slightly increased inflation figures compared to last month. It was also slightly above the experts’ expectations and I think was already priced in and digested. But Investors remained on the sidelines as they choose to stay sideline ahead of heavyweight RIL result and Axis Bank result which was set to announce later in the session.

India WPI at 7.81% as against the consensus estimate of 7.7%. It was at 7.55% for the previous month and 10.00% during the corresponding month of the previous year.

RIL has posted its fourth consecutive YoY drop in its Sept quarter profit on declining natural gas output from its KG-DG fields and poor petchem margins. Net profit fell 5.7 per cent to Rs 5376 crore,YoY. Sales were however up 15.4% to Rs 93265 crore, YoY. Its slightly above the experts expectations, experts were expecting 6% fall in net income.

India's third largest private sector lender Axis Bank  on Monday reported 22% YoY rise in its second quarter (Jul-Sept) net profit to Rs 1,124 crore, boosted by growth in loans and other income. Net NPA ratio too rose slighly from 0.31 to 0.33% sequentially.

So now we can say its inline, so now it would be interesting to see how market reacts today. To my view, since its inline so it wont hit the market and secondly Axis bank has also posted 22% rise in profit and that’s market may continue its y’day inning further to make an attempt to 5725.

On Govt. front, Govt. is trying best to boost the macro-economy. On Monday, Dr. Montek Singh Ahluwalia, deputy chairman of planning commission said that India's economic growth is expected to bottom out in about six months. Statement will also help in boosting sentiment.

While the Govt. has already cleared a bulk of the 52 Oil and gas blocks that were stuck for defence and environmental clearances.


The Foreign Investment Promotion Board (FIPB) is scheduled to be held on October 19, 2012 FIPB to consider 50 FDI proposals this week. While India allows FDI in most of the segments through automatic route, the FIPB clears those proposals which are related to sensitive sectors like defence and telecom. (Rreports MoneyControl.com)


Need to keep eye on statement of IMF Managing Director Christine Lagarde, she said in IMF-World Bank Annual Meetings in Tokyo, “Global economic growth is being weighed down by uncertainty about whether policymakers will deliver on their policy commitments”, “We need action to lift the veil of uncertainty. Many of us have debated what actions are needed, many of us understand what needs to be done, but it actually needs to happen,” she added.

On world’s second largest economy China - Retail level inflation in China increased by 1.9% last month, China’s inflation was close to the slowest pace in two years in September.

Thursday will be a noticeable event as China’s third-quarter gross domestic product will be released.

MARKET OUTLOOK
Though participants are taking small positions but on broad basis market participants are in a wait-and-watch mode before the RBI's important policy meeting on October 30. This attitude giving sense that Oct. series will remain in a narrow range.

Now all eye will be on EU event on 18th while ITC and Tata Consultancy Services will announce results on Friday.

Still it’s a No Trade Zone in regards to fresh position. But one can start making position on selective scrip with consideration to buy on dips.

NIFTY
As per big experts the bottom for the market is seems around 5600-5620, so it it made attempt to thsese levels and sustain then Nifty is heading towards 6000 before new year.

Well, volume seen small but FII have created fresh longs. OI stands 2.46Cr.

5800CE has highest OI of 91 lac with addition of 1 lac & 5900CE OI is 88Lac with fresh addition of 2 lac. On short side 5600PE has highest OI of 76 lacs with fresh addition of 7 lacs & 5500PE has OI of 60 Lacs with unwinding of 4.39 lacs, 2 lac fresh share added to 5700 PE and OI stand at 57 Lac.

Vix fell 3.5% to 15.90 and Nifty PCR is 0.94.

Resistance comes to 5703 – 5719 – 5746 - 5815 and Supports comes to 5660 – 5635 - 5518.

Opening seems slightly on positive note say above first resistance and then market can opt range bound session till EU cue. So better watch for strength on Nifty and make position only on intraday basis.

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 – yes not blindly to any stock, in select good stocks only.

Cement Sector
Brokerage CLSA has upgraded the cement sector to overweight.

Realty Sector -
DLF - Hearing a public interest litigation (PIL) on the Robert Vadra matter, the Allahabad High Court has asked the Centre to respond to charges levelled against Vadra

Steel Sector

India is the 4th largest steel producer in the world and will soon be the second largest, said Union Steel Minister, Beni Prasad Verma on addressing the 46th Annual Conference of World Steel Association here y’day. The capacity is all set to increase further as Steel plants in both public and private sectors have taken up expansion and modernization programs, added Mr. Verma.


Steel makers are likely to face margin pressure in the near-term even as raw material have eased, believes that the near-term margin outlook for Indian steel companies remains weak, notwithstanding some moderation in raw material prices recently, As a result of the downward journey of steel prices, the imports of steel surged in current year exerting significant pressure on domestic steel prices, which may continue to remain under check in the near-term.

Tata Steel – Has achieved best ever quarterly saleable steel production at 1.87 million tonnes (MT) in the July-September period, in Q2 of the last fiscal, it had achieved 1.71 MT of the saleable steel output, official said in a report on Tuesday last week.

Power Sector

Another sign of reform has given by PM Mr. Singh in his inaugural address at the International Seminar on Energy Access in New Delhi y’dday, Mr. Singh said Govt has to provide 24x7 Electricity to all in 5 years.


Banks Sector
Banking sector will remain on focus as y’da FinMin PC said that now its turn for RBI to support Govt. initiative.

IT Sector
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 – After disappointing Q2 and exit of CFO, it seems it will pickup its steam sooner or later.

Auto Sector

TM - Global wholesales of all passenger vehicles were at 48,895 nos. in September 2012, lower by 11%. Cumulative wholesales for the fiscal are 295,491 nos. higher by 14%.


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
(Be with strict SL and don’t hesitate to book profit if Nifty shows strength)

DB Realty - @79 for TG 110 SL 74 (created 1 week back, fresh call made y’day)

Deccan Chronicle Holdings & DCB - suggested to exit y’day, keep eye on both stock, once Nifty will settle from its under pressure behaviour both will shine. If you are still holding then no prob, keep it for Mid term bet.

DhanBank - @55 for TG 70 SL 45

Jindal Photo - @145 for TG 160+ SL 130

Today’s MG Mantra
Market may cheer to RIL & Axis results. Still Nifty is not showing strength, it may remain range bound, play only for small profit is the MG Mantra for the day. Before making any conclusion have a look to Nifty OI.

Have a Profitable day – MG

Disclaimer – I have shared my view as per my limited knowledge; please use your own skills to make a wise decision before execution of trade.

37 comments:

  1. Hello sir ,
    ICICI bank to over take KTK bank .
    Again the history is repeating...
    (similarly , ICICI bank bought bank of rajastan )
    This may take few days to months.
    So where can one see KTK bant in near term ?
    Can I buy for 2 months (futures) ?

    Thank you.

    ReplyDelete
  2. Hi Don,

    Yes that is too old news for KTK bank. TG could be 150+ (future may be risky as it will need 50K+ amount for M2M if goes reverse 10pts, I am too waiting for this but since Nifty correction is not seems over and done in a way that's I am worried)

    Today -
    Sun TV may touch 369

    AT - seems weak may touch 82-83 lvl, Option holder need to exit.

    ICICI - will show strength and as usual SBI

    Infy can rebound

    ReplyDelete
    Replies
    1. Sir ,
      exited bhel @252 (bought yestarday @ 247.50 as BTST).

      Yes suntv is going good , but I exited it at 364 (bought @354.50) now at 369 wish I would have hold it , but a gap of 10 rs is enough for me .

      Sir Dhanlakshmi bank up 7% , seems going to hit your target in 2 days.

      Thank you.

      Delete
  3. Good morning Sir, above mentioned msg you wrote to exit from AT, should I exit now or wait till EU opens. Rgds

    ReplyDelete
    Replies
    1. Option prices are reducing, wait what EU does else close positions today. No worry if you are holding CM. will go to 95 sooner or later.

      Delete
  4. Catch you all in 30 min. Intraday bet keep eye KEC & Central Bank, if mkt show strength, one can gain small profits. see u

    ReplyDelete
  5. Hello sir ,
    DECCON GOLD again up 5% at 24.3 . Last 3 days 15% up.

    Sir , can we make any shor position in metals like tata steel , jsw steel , hindalco , sail ,etc.
    Taking in to consideration that gdp of china is going to be lowest .
    This will trigger fall in metal sector as demand outlook will be low.
    We can see it negative as even if gdp of china comes out to be better than expected or very good then , there will be no stimulus from china which is much expected .
    Thank you.

    ReplyDelete
  6. Sir Orient paper and west coast paper mills showing strength....(I was just checking nd didnt have)

    ReplyDelete
  7. Karnataka Bank Chairman denies report of stake sale to ICICI Bank

    ReplyDelete
  8. WOW !

    suntv hit target , high 371.30

    ReplyDelete
    Replies
    1. Good info Don, keep it up... my prob was I hadn't had that much amount to buy it so had no option only then see it going up.

      Delete
  9. Some of you were asking for Diwali Gift... Diwali gift will come from SBI & Axis bank.

    ReplyDelete
    Replies
    1. Hope SBI reach at least Rs. 2450 till diwali & Axis
      Rs. 1300

      Delete
  10. Buy SBI 2300CE at 35 TG 46+ (max 2 lot)
    Axis - 1160CE at 27 for TG 34+ (max 2 lot)
    (Have a look to EU first, Axis is already up much)

    ReplyDelete
  11. Sir, I exit from AT @ 0.65, booked loss of approx. 19000. Still holding TM 280 CE @ 9.45 (2 lot), should I exit ? Rgds

    ReplyDelete
    Replies
    1. Dear Palak, TM to need to exit around mkt closing.

      Delete
    2. yes as China's slow down and production results are expected to be below expectation and JLR belongs to China in major. So TM may sustain or even go up but premiums are reducing.

      Dont worry, once you will have patience, all lost money will back to us.

      Keep eye on SBI & Axis bank call.

      Delete
  12. Hi MG when do u expect SBI 2300 CE target to be hit?

    ReplyDelete
    Replies
    1. Prasadji, As told it needed mkt support, if mkt supports then it may hit TG in a day or two. But as suggested one need to wait till EU time, and mkt is going down. Dont make position right now.

      Delete
  13. Some fellow are disappointing that I am not making new calls, market is not showing strength then how can I?

    I prefer to sit on cash rather to bet everyday and lose.

    Have patience as operators have mindset to expiry the Oct. series below 5700 mark and that's we should be careful.

    ReplyDelete
    Replies
    1. Hi Sir,
      I have bought SBI 2300CE@34.5 and AXISBANK 1160CE@25. Can i hold it.

      Delete
    2. Dear Sriram - this was my line - (Have a look to EU first, Axis is already up much)

      Nothing harm in holding but if you all will have patience then you will make more money like now both are available below 1K price.

      Delete
    3. Ok Sir. Please let me know if i want to exit due to some weakness in market.

      Delete
    4. Please all dear friends - keep this in mind - when I add some text to call it mean it has something to watch and need extra precaution like what I had mentioned for SBI & Axis, like what I always add "Risk Takers".

      When I find all clear I make clear call like "Buy" only. This will help you in saving your money as well as help you in making big money by buying at lower levels and sometimes will save from losses.

      Delete
  14. Hello friends ,
    seems a dip in nifty is good chance to make fresh position in SBI .
    Banking is still strong , auto , metals , fmcg are under pressure for two days as china factor.
    I am holding SBI futures 1 lot (2265) , hoping to cross 2300 till expiry.

    Sir (MG) , I was thiking of shorting tatasteel at 420 in morning , now it is at 416 , so is there any room down if shorted at current level for two days . Tata steel is a global co. so gdp of china will cause more effect on it.
    Thank you.

    ReplyDelete
    Replies
    1. Dear Don, probably it (TS) should hold 411, if breaks then will test 405, still breaks then will test 395 levels, so chances are limited. One can play for small profit but No Option Trading.

      Delete
  15. Also watch out for Havells, if it breaks 645 then most probably it will be in down trend. Remember it and remind me once it crosses that level as due to too may call watch I forgetting the things quickly. Then TG would be below 625 (Specially in terms of Nov. series.)

    ReplyDelete
    Replies
    1. Hi Sir,

      Can you please tell me the SL for the SBI and AXIS BANK CE.

      Delete
    2. Ok Sir. Hope it will recover tomorrow. Thank you.

      Delete
    3. Can i do average for SBI 2300CE. I bought 2 lots for 34.5 not its below 20. Kindly advice.

      Delete
    4. Sir Bought 1 Lot(Cant afford 2 lot so) SBIN 2300 CE @17.00 ...

      Delete
  16. The day of opportunity losses... In the noon I place order for BankNifty 11500PE @124 when it crossed 11500. My opinion was that it would be facing stong resistance there hence it will come back. But cancelled order due to high risk. By end of the day it closed above 230!!!!!!! Instead I bought RELIANCE 820Put@11.0 and sold @11.5. It closed above 15!!!!!!!!!!! Extemely disappointed.....

    ReplyDelete
    Replies
    1. Same experience with me also. I boughht sbin pe 2250@29, after watching green euro i sold @35. I bought sbi ce 2400@ 8.9. Finally i am waiting tomorow.

      Delete