Morning Bells (23 Oct 12)

Good Morning Friends.

If egg is broken by outside force, life ends. If broken by inside force, life begins. Great things always begin from inside.

Welcome to truncated week of expiry. It was a surprise day, when we thought that markets may go for decline on account of weakness in the global markets as U.S. stocks witnessed a sharp decline on Friday after disappointing earnings reported on the street, particularly in the technology sector. Indian equity indices defied the weakness and ended with smart gains today. Nifty open weak on weak global cues and remain weak for most of time in first half, once result session started kick off participant come forward and take the Nifty to GREEN from RED. Though market was choppy throughout the day, Pharma, Banking and the IT stocks were among the top gainers and helped Nifty to close above 5700 Mark.

Actually market was prepared for up move as TCS had already given sufficient confidence and then market was eagerly waiting for L&T and HDFC Bank quarterly earnings, but market gave one after another good news. So we can say it was the day for those surprising news and results.

First both major player come up with good result market just started its up move and finally ended with 33 points up.

HDFC came first and posted a net profit after tax of Rs. 11511.20 mn for the quarter ended Sept 30, 2012 as compared to Rs. 9707.00 mn for the quarter ended Sept 30, 2011, up approx 19%.

L&T posted better than expected Q2 Nos, posted a net profit of Rs11373.10mn for the quarter ended September 30, 12 as compared to Rs7983.90mn for the quarter ended September 30, 11. L&T gained 2.2% and ended at 1670.

Cairn India Ltd also said y’day that it has more than tripled its net profit in Sept quarter to Rs 2,322.18 crore on the back of higher production.

Other major results are – Tata Coffee net profit jump to 111%, Oberoi Realty Q2 Cons. Net profit up 12%,

Then news came from MCX-SX has announced its membership nos. It has received over 700 applications for new membership for all segments. MCX-SX had announced the launch of its membership drive on September 5, 2012.

Y’day Infosys has also announced completion of the acquisition of Lodestone Holding AG, a leading management consultancy based in Switzerland.

So it was overall day for News and Corporate earnings. Now we have only 2 days remaining for expiry. Now it would be interesting to see where this expiry going to take place.

MARKET OUTLOOK –

Against all experts’ expectation market shown good strength, everybody was surprised by Q2 results and street cheers the momentum.

So, lets see where expiry is going to take place as upside seems capped and on down side it would be interesting to see whether BULLS manage this expiry between 5650-5700 or not.

It was another attempt to breach 5725 mark and finally Nifty settled to 5717.

Best idea is to stay sideline till Nifty don’t break this trading range as its giving sense for something big. Its still in No Trade Zone, one can make only Intraday position or can wait for breakout of level either side.

NIFTY OUTLOOK –

FII DERIVATIVES STATISTICS FOR 22-Oct-2012
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY		Diff.
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	168513	4786.38	160423	4550.37	701013	17986.52	236.01
INDEX OPTIONS	615701	17505.10	622305	17681.39	1842582	52699.12	-176.29
STOCK FUTURES	311166	8994.65	301495	8699.99	1103828	32402.93	294.66
STOCK OPTIONS	52383	1680.97	50085	1606.01	85560	2731.43	74.97

We can clearly see that on Friday FII had taken short position but now seen that they have covered shorts y’day and again went long (curious people study Y’day & Today’s chart, they will see the difference). They are doing since past 2 weeks. Today bulls again given try to breach 5725 Mark but failed, still we are in 5640-5725 range, lets see whether we break this range today or not as many big expert expecting Nifty to reach around 6000 Mark on Diwali and man are expecting expiry between 5650-5700 mark. Lets see what in store for us.

On long side now Nifty 5800CE standing on 1.17 Cr OI with fresh addition of 9.97 Lac, 5600CE, 5700CE & 5900CE seen unwinding.

On short side Nifty 5600PE OI standing at 83.56Lac with huge addition of 15.54Lacs contacts, 5700PE has also seen addition of 7.73 in OI and standing at 62.49 Lacs while other PE seen unwinding.

So if we see through data its seen that its still in the range of 5600-5800. If some of you would have remember my statement in M Bells on 2^nd and 3^rd day of this series I had informed that this series seems a 200 point series and we are still in that series.

Well, INDIA VIX on NSE again slipped 10% to end at 13.01 which strong cue that market moving towards weakness and if this weakness settle before fresh series then Diwali seems cheering else again it will try to make few sessions range bound. PCR is 1.12.

Now Resistance comes to 5725 - 5740 – 5762 and Supports comes to 5690 – 5676 - 5635.

Trend is sell on rise till 5745 is not broken. Better to consider this range as No trade zone, sitting on cash is always good, just watch out for breakout of any support or resistance will only give clear indication. Buying momentum is likely to accelerate above 5745 levels, and then Nifty may retest 5800+.

Opening again could be same as y’day i.e. slightly on negative bias as global market are not supportive and PCR and VIX is also suggesting weakness.

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.

Realty Sector –

Is set to move big after expiry ahead of festive season. It seems good bet. DB Realty & Oberoi Realty.

Steel Sector –

Steel seems under pressure.

Power Sector –

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

Banks Sector –

If Nifty shows strength then are on move. Top pick Axis Bank & HDFC Bank, please avoid SBI time being.

Axis Bank - Right now its reached in overbought zone (so dont hurry to buy, wait for a correction), R 1229 - 1243 - 1252 - 1283 - 1308 & S 1199 - 1175 - 1191

HDFC Bank - R 644 - 649 - 659 & S 629 - 619 - 614

IT Sector –

IT was on buying radar on Friday & Monday. Infy & TCS are in News.

OIl & Gas –

Cairn India - R 341 - 345 - 350 & S 334 - 331 - 329 - 323

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.

DhanBank - @55 for TG 70 SL 45

Jindal Photo - @145 for TG 160+ SL 130

Omkar Chemicals – Bought @102 for TG 115 SL 83

Note – One can also find Morning Bells at MudraGuru.blogspot.in (every time to find it on single click rather than to scroll here) One can also find live calls during market hours here.

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 –

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

2. Those who don’t have patience and are not willing to book loss also in cases don’t enter this market.