Morning Bells (17 Oct 12)

Good Morning Friends.

Instead of repeated errors you love yourself most, then why you hatred to someone just for a single mistake. Strange but true!

Markets erased its winning streak on Tuesday and ended almost near day's low and fell down instead of strong global cues. Market witnessed some heavy selling in Realty, Metals, Capital Goods and Power stocks, the only saviours were select FMCG, IT & Banks. Pressure increased due to profit booking in broader indices.

DLF, M&M, ACC, Tata Steel, Reliance Infra, Hindalco, Tata Motors were among the major losers while Hero Motocorp, Cairn, Bharti Airtel and Sun Pharma were among the major gainer.

RIL was another reason for fall, RIL gave up all its gain in late trade instead of expected quarterly result. Even posted good result by India's third largest private sector lender Axis Bank on Monday (reported 22% YoY rise in its second quarter) was also unable to keep the momentum up of both Nifty and Bank Nifty. Bank Nifty seems in downtrend and may go below 11000.

Well, today market will eye on HCL which will announce quarterly result today. The India's fourth largest software services exporter is expected to report 3-5% sequential growth in volumes, however margins will be under pressure due to wage hikes.

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 –

Nothing much to say about market as participant started profit booking. We are just above strong support for Nifty which is 5630 and to watch it today, if broken then next big support comes to 5585 and if this is broken then we will see a big selling pressure and market can witness a big fall. On long side 5728 has strong resistance, so till market hover in this range it’s a No Trade Zone. One can make only Intraday position either side.

All eyes will also be on EU event on 18^th while ITC and Tata Consultancy Services will announce results on Friday.

NIFTY –

Seems FII is now doing lot of day trading. On previous day they had made longs and y’day they booked profit in their longs. Even they are doing some intraday trade. And y’day they have shorted the index.

Huge position added to 5700CE (18 lacs) & to 5800CE (11.5 Lacs) on short side 3.89 lacs position added to 5600PE and 4.63 lac to 5600PE.             5800CE have crossed OI above 1 Crore, while down side 5600PE has highest OI of 80 Lacs, so now on broad based range seems 5600-5800 but data sensing something different, so just watch out for breakout of any support or resistance will only give clear indication.

India Vix lost 2.2%  and closed to 15.57 and Nifty PCR is 0.84.

Resistance comes to 5674 - 5709 – 5728 and Supports comes to 5630 – 5615 - 5585.

Trend remain bearish till 5728 is not taken out, buying momentum is likely to accelerate above 5728 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 –

Brokerage CLSA has upgraded the cement sector to overweight.

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 –Slow but steady gain is seen. Keep eye for Mid to Long term bet.

Banks Sector –

Most of expert expectating 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 –

IT rebound y’day and today all eye will be on HCL

Auto Sector –

TM - Shares of Tata Motors declined after the company reported on Monday that Jaguar Land Rover (JLR) sales had dropped 4.3% to 26,461 units last month which missed analyst estimates of 30,000 units.

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 (Hitting upper circuit everyday)

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 –

Its No Trading Zone, watchout 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.