Morning Bells (18 Oct 12)

Good Morning Friends.

Some people think that BLACK color as sentimentally bad but they forget to know about – every black board makes bright future.

Y’day market ended on a flat note. The start was encouraging as overnight rally in global market but today market was choppy. The only positive thing was that Nifty defended 5630 Mark and now above 5650. So today I have nothing much to say except we are in consolidation phase as last time when global market was corrected we didn’t that much, so now when global market is making new high we are behind a bit.

RIL share was under pressure, as we already know that gas production in KG-D6 fields has been falling, according to reports and for new investment RIL has submitted a gas price formula and said the price needs to be linked to international crude prices. There are reports that finalization of the decision is pending due to the contractor’s (RIL, BP and Niko) refusal to allow audit by CAG. (Reports IIFL.com)

In another news Beverage maker Diageo is in talks to buy ~20% stake in Vijay Mallya-owned United Spirits, and probably can pay a premium to the market price.

IRB shares tanked after IAC allegation, - With reference to the new article appeared in the leading news papers web edition on October 17, 2012, with title "IRB Infra tanks on allegation from IAC activist". After a sharp fall IRB has clarified to BSE that : Ideal Power Ltd or Ideal Energy Projects Ltd has never been part of IRB Group. – Source IIFL.com

On global front Moody’s has retained Spain’s investment grade debt rating but the outlook is negative. Agency has confirmed the Spain's Baa3 government bond rating and assigned a negative outlook to the rating.

Today market will eagerly await China’s third-quarter gross domestic product no.

MARKET OUTLOOK –

Nothing new at the moment, market seem under consolidation and cautious ahead of China GDP Nos. Nifty defended 5630 level which is good new and its also good that it closed above 5650 Mark, next big support exist at 5585. On long side 5735 has strong resistance, so till market hover in this range it’s a No Trade Zone. One can make only Intraday position either side.

Today all eyes will be on China GDP, EU event on 18^th while ITC and Tata Consultancy Services will announce results on Friday.

NIFTY –

FII once again made long in index futures, bought 197Cr. If you would have remembered the term “Football” & Passing the ball, market is still acting to that way only and we are in narrow range since past 4-5 sessions.

Now 5800CE has highest OI of 1.17Cr. and today it added more than 16 lac contracts at premium of 9 while 5500 PE has highest OI of 85 lacs with fresh addition of 20 lacs at premium of 6-7, such a huge addition giving sense that next few session mean expiry week will be difficult for bulls to manage so if 5630 taken out in a decisive way Nifty may test below 5600 mark where it will find support at 5585. So its No trade zone, sitting on cash is always good, just watch out for breakout of any support or resistance will only give clear indication.

India Vix lost 2.5%  and closed to 15.17 and Nifty PCR is 0.87.

Resistance comes to 5685 - 5709 – 5735 and Supports comes to 5634 – 5607 - 5584.

Trend remain bearish till 5725 is not taken out, buying momentum is likely to accelerate above 5725 levels, and then Nifty may retest 5800.

Opening seems slightly positive as global market closed with higher gains. 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 –

May see some pressure due royalty.

Realty Sector -

Comes under rate sensitive field and will see some pressure. Select stock can perform better with support of Nifty.

Steel Sector –

Steel seems under pressure ahead of GDP no.s from China and global pressure for the sector.

Tata Steel – Has broken out its support level and can test 400 mark in coming sessions.

Power Sector –

For slow but steady gain is seen. Keep eye for Mid to Long term bet.

Banks Sector –

Most of expert expecting that the RBI may cut the CRR by 25bps but will this hope really help to Oct. series is the million dollar question.

IT Sector –

Heavyweight may see some pressure ahead of US Prez election as fight seems very close.

Auto Sector –

TM – As suggested it may find support near 260 and then 2555-256, breakout of 255 will lead stock to below 240 level.

OPEN CALLS –

# Please remember when I make special remark with any position then one should need to take care of that else you can make loss instead of profit.

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

DB Realty - @79 for TG 110 SL 74 (TG Achieved, call closed)

Deccan Chronicle Holdings & DCB - suggested to exit, 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 –

Its No Trading Zone, watch for breakout of either side else play only Intraday and close positions before market close.

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.