Monday, 26 November 2012

Morning Bells (26 Nov 12)

Good Morning Friends.

The best words in which one should believe and should read every morning, then definitely he can achieve his dream – “I will win… not immediately… but definitely”.

So finally we have entered in truncated expiry week, we have only 3 trading session for Nov series expiry. Bulls had given attempt to close Nifty much expected 5635 Mark but soon after positive opening bears dragged  Nifty to 5593 but bull comeback last moment and managed to close at 5626 just below the mark.

This comeback was led by the Auto, Oil & Gas and select Consumer Durables stocks. While the realty, PSU, Pharma, Banking and the Metals stocks were the looser.

Regarding India’s growth - Morgan Stanley said in its report that India is expected to register a gradual recovery in the growth rate to 6.1 per cent in 2013 driven by positive impact from policy actions and acceleration in farm output growth considering the challenging environment due to high fiscal deficit, high rural wage growth and declining private investments amid a still lacklustre external demand, the report said.

Meanwhile, Moody's says the Indian economy is likely to grow at 5.5 % to 6 % this year and is hopeful that things will improve from then onwards. However, if India fails to rein in its ballooning deficit, India could face a downgrade in its ratings.

New Pharma Policy - is going to hit pharma setor. According to reports prices of various leading drug brands will come down by up to 80 per cent thanks to the newly-approved National Pharmaceutical Pricing Policy but at the same time it will hurt investment sentiments in the country's pharmaceutical sector

According to the Indian Pharmaceutical Alliance (IPA) and Organisation of the Pharmaceutical Producers of India (OPPI), the new drug policy would also adversely impact profitability of Indian pharmaceutical companies. This will reduce industry profit by half to Rs 4,000 crore on domestic sale of Rs 67,500 crore," IPA Secretary General D G Shah told PTI.

Sebi’s instruction to reduce promoters holding to 75% - Shares of multi-national companies (MNCs) will be in focus in the next few weeks as many of them will be required to either reduce promoter shareholding to a regulatory cap of 75 per cent or get delisted.

At least four companies -- Fresenius Kabi Oncology , Disa India , Blue Dart and Xchanging Solutions -- have already sold promoter shares through one-day Offer for Sale (OFS) window in recent weeks, while a few others like Honeywell Auto too are lining up their share sales in due course. (

Since delisting is not viable option because of huge cost burden as many stocks have run-up in anticipation of delisting offers a huge premiums, so its expecting that in the next two months, many companies will go for OFS (Offer For Sell) route to shore-up non-promoter holding,

Government is locked in a battle with the opposition over the validity of a debate over FDI reforms. PM has called a meeting with opposition to settle the parliament logjam on Monday second half. So market will eagerly waiting for the result, if there would be solution then market may likely to cheer or we can see sharp decline.

The INDIA VIX on NSE was down 1.5% and end at 14.68 and F&O PCR is 0.89.

The Rupee closed at 55.54/USD.

A small gap-up is there as all global market ended higher, also S&P seen sharp recovery and closed above 1400 Mark which is itself positive mark for global market.



No. of contracts
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Amt in Crores
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Amt in Crores


FII bought 786 contacts while OI increased by 6,630 contacts sensing booked profit in shorts and taken fresh longs.

Still it seems that Nifty will remain in tight range ahead of expiry and parliament logjam. Secondly Foreign investors are looking for parliament proceeding and that’s money inflow into market is slow.

Nifty has gap above 5600 which is 5651-5666 and probably Nifty is going to fill the gap today. Nifty will face strong resistance in the range of 5652-5672.

Now there are high chances for high volatility in trio sessions and its also likely that Nifty will remain in the range of 5548/5585 to 5715/25.

As told last week there are high chances to expire Nov series range bound, may somewhere between 5600 – 5700. Better to avoid OTM options as reducing premium will put you into loss. It could be good idea to sell OTM options.

Resistance comes to 5672 - 5689 – 5701 - 5725 and Supports comes to 5600 - 5693 - 5576 – 5548.

(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.)

Realty Sector & Infta
Change in long term outlook - The real estate sector will continue to remain an attractive investment destination with the possibility of prices in residential areas appreciating by 91 to 145 per cent in select cities over the next five years, according to report prepared by Knight Frank.

Keep eye on DB Realty, Peninsula Land & Anant Raj Industries.

Coal & Minings
Sesa Goa - Reports are not in favour of Vedanta group firm Sesa Goa today said it may have to resort to imports of iron ore for feeding its 6.25 lakh tonnes pig iron plant in Goa due to a mining ban in the state. Incidentally, Sesa Goa is the largest domestic iron ore miner and had sold 16 million tonnes of iron ore in 2011-12.

However, since the imposition of mining ban in Goa in September this year, its production has come to naught. The Goa Government had ordered a temporary suspension on extraction of ore across the state on September 11, pending verification of various approval documents in view of the findings of Justice M B Shah Commission on illegal mining.

On 5 October 2012, the Supreme Court ordered a suspension on mining activities in Goa, including transportation of mined ore from mines or stockyards and asked the Central Empowered Committee to file a preliminary report in four weeks

The company is now hoping to get an approval to resume its operations in Karnakata, where rehabilitation and reclamation plan for its mine at a reduced capacity of 2.29 MT has been approved by the CEC.

So a tough time seems ahead for Sesa Goa. My personal suggestion is to stay away from scrip till clarity on issue or don’t carry your trades for short to mid term.

Telecom Sector
Telecom stocks are slowly creeping back into the game. These beaten-down stocks have gained significantly in the last month. BhartiAirtel gained most while Reliance infra increasing significantly.

# 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 doesn’t shows strength.

Dish TV - @78 for TG 84+ SL 72

DB Realty - @128 for TG 145+ SL 107

Dishman - @118 for TG 130+ SL 107

Jindal Photo - @145 for TG 160+ Updated SL 126

SBI 2100CE - @33 for TG 55+ SL 23 – Booked loss on 23rd Nov. Position closed at 24

Today’s MG Mantra
Enjoy the volatility.

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 or consult your financial advisor.
2. Those that don’t have patience and are not willing to book loss also in cases don’t enter this market.


  1. I got the info from my broker that high number of short positions are held in this series. If short covering happens then NIFY will close above 5720 otherwise 5500 is on card for expiry.

    1. I dont see 5500, most probably it will remain range bound, range is already suggested in Nifty outlook. 5548/5585 to 5715/25.

      Also suggested OTM calls can be sold.

  2. Hello sir ,
    Short covering is completed as we saw drop in OI .
    Mkt operators will try to drag nifty down (below 5600) as premium eaters are hungry , creating volatility .

    PNB is strong but , as F1 exited at NPNL .

    Thank you.

  3. Keep eye on KPIT, short term investor can buy around/below 127 for TG 140+ SL 117

  4. Hi MG,

    As per my info Voting on FDI is tomorrow. If the get approved then where we cab see NIFTY ? and in not then also what will happen?

    1. oh great news - I thought Govt. will table it around closing, so if I guess they are going to table it tomorrow then they would have certain no.s. Lets see. FDI will get resistance is mostly priced in, so down fall could be 50+ point while approval could be 100+ point.

  5. Today we will have call on -

    Rel Infra & Pantaloon... just wait till 1.30

    ahead of parliament proceeding tomorrow.

    So, dont forget to revisit after 1.30

  6. Our favorite DB Realty once again started dancing and in good profit in just a week. Till date we have make approx 60Rs gain in just one and half month in 3 different trade which comes to approx 50% gain.

    Enjoy the call.

  7. Today there is meeting to decide 2nd relief package for Greece at 5pm (IST) , Top EU officials including ECB chairman & Greece FM .
    Analyst believe ECB will stuck deal in this meeting , so we can see volatility in EU but tomm EU will rally if deal fixed.

  8. MG sir,
    every day in morning bell you are mentioning INDIA VIX and F&O PCR. What is it? If you have the time please explain what it menas. and how it will affect the market. and what is the comfortable level of VIX and PCR for the market.

    Hi Don if you know the things please explain me.

    1. Though both subject require long text to understand but in short -

      Its implied volatility (IV) one of the sentiment indicator, or you can say its investor fear levels, when it comes to 14 or below level investors opt cautious approach and there're high chances for a correction, revert when it go above 21 it shows correction phase is either over or going to over.

      One can not depend only on VIX, it can apply in combination with other indicators like PCR.

      PCR is Put Call Ratio i.e. how many Puts & how many Calls are created and whats total OI till date. below 0.75 shows bullish sentiment while above 1.25 shows bearish trend.

      Started pathshala and hope slowly-slowly we will cover all the topics with good examples, one just need to wait and have patience and must read it on weekends.

  9. thanks MG sir
    i am eagarly waiting for pathshala

  10. Sir, Jindal Photo has touched the SL 126 today. What's your call, should we hold it? I can wait for few months.

    1. Result was bad but I had hope it will give some profit. wait for few more days, I am also tracking, SL is on closing basis. So just wait for clarity on FDI bills else we will need to book loss becoz if it goes below 122 level then it will take time to move up and till that time your cash will be blocked... and I hate this, instead I prefer to exit and make same amount with other scrip. Like what I have suggested DBR is moving up, KPIT to give you 12+ in very short time. Here you are losing 17Rs.

      Just remind me around Friday first half. And if FDI disapprove then exit.