Thursday, 29 November 2012

Morning Bells (30 Nov 12)

Good Morning Friends.

Everything is EASY when we are crazy about it and nothing is easy when we are LAZY about it.

Whoaa, 180+ points in just days, looks it was wild bull move. Yes it was closed just around our resistance and if you remember we had discussed that Nifty was in 5600-5800 Range for Nov. series and it expired as per expectations.

Well we are in Dec series which seems with full of promise and I guess we will have great earnings opportunity in Dec & Jan series. So be online during market hours to catch the bus.

long rollovers in the high beta sectors like Real Estate, Infra and Auto and the defensive Pharma stocks lifted the markets to hit the highest level in the calendar year 2012, While, some heavy short covering in the Banking sector towards the fag end of the session saw the NSE Nifty close above the 5800 mark for the first time in the year 2012.

Today’s noteworthy rally was seen on the back of life time high turnover over 3.92 lakh crores turnover was registered on the bourses.

Moody's said the stable outlook on the country's Baa3 rating was based on its structural strengths of a high household savings rate and relatively competitive private sector, which could help raise growth in coming years.

The Economic Times reports that RBI has rejected the request of banks that they be allowed to restructure real estate loans without providing for likely losses if the loans go bad. A loan is said to be restructured when the original terms of the agreement (interest rates, tenure) are diluted to enable troubled borrowers repay loans. This also helps banks recover to recover a good chunk of the funds they have lent.

This RBI move is welcome for two reasons. One, home prices could soften (or at least the steep rate of climb could be arrested) as banks put pressure on property developers to repay loans. This in turn could force builders to push up sales by dropping prices if need be. Second and more important, by bringing greedy realtors to heel, the RBI may also be able to rein in a key contributor to inflation: soaring property prices. (

Consistent high FII inflows and an upbeat government mood have boosted and strengthened market sentiment. Here onward I see tomorrow may be subdued session and now investors will wait for FDI discussion in parliament for next cue.

Here I would like to point out that Rupee is not appreciating as much as we have seen rally in stock market, there was no strength in the rupee. Today was the first day when the rupee has slightly appreciated and that appreciation was necessary because the foreign institutional investors (FII) inflows are not that large and FIIs could be just hedging in the futures market.

So here onward now we need to see whether this rupee appreciation and FII buying would continue or not.

In the last two decades, the last month of the year has generated returns between 0.7% and 15.7%, which has given birth to the December phenomenon theory. Only four times in the last 20 years -1994, 2000, 2001 and 2011 - December has generated negative returns, states a recent Morgan Stanley report.

The INDIA VIX on NSE surged 10% and ended at 15.37 and F&O PCR is 0.94.

The rupee gained a bit and traded at 54.84 against 55.45 a day earlier.



No. of contracts
Amt in Crores
No. of contracts
Amt in Crores
No. of contracts
Amt in Crores


FII bought 80,825 contracts worth Rs. 2346.39 Cr. and OI decreased by 1,36,015 contacts in Index Futures. FII went long in Nifty and Bank Nifty.

So finally we closed above 5800 mark in 2012 for the first time. Now bears that were doing efforts for ceiling 5800, but now that has gone to 6000 mark. Now Nifty is in range of 5500-6000 as per what data on opening day shows.

Be cautious with Nifty at this point as a long awaited correction is on card but first Nifty can attempt to 5900 mark before that.

Nifty Critical supports are 5548 - 5666 - 5692 - 5733. Here 5666 is Alarm and 5548 is trend changer.
Resistance comes to 5860 - 5895 – 5957 and Supports comes to 5798 - 5762 - 5700 – 5665. 

Till next week Nifty seems in the range of 5750 to 5950.

(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.)

Coal & Mining –
Sesa Goa -
Shares of NRI billionaire Anil Agarwal-led Sesa Goa  jumped a 7-8 percent ahead of the Central Empowered Committee (CEC) report on allegations of illegal mining in Goa tomorrow.

Sesa Goa's investors are hoping that there would be some kind of good news . Now good news can come in two forms. 1) A partial withdrawal on the mining ban in Goa or 2) there can also be a resumption of the transportation of iron ore that they already have. In September 2012, there was a complete blanket mining ban in Goa. Sesa Goa has already been suffering as their Karnataka operations have come to a standstill for the past 15 months. The company was dependent on its Goa operations over the past 15 months.

PVR – Cinemax Deal -
The Board of Directors of PVR Limited (PVR) y’day announced that it has entered into Definitive Agreements to acquire 69.27% stake in Cinemax India Limited (Cinemax), a Kanakia Group entity that operates movie exhibition business in India.

PVR currently has 46 operational properties, with 213 screens. This acquisition is being carried out through its wholly owned subsidiary, Cine Hospitality Pvt. Ltd. (CHPL). CHPL would be acquiring 69.27% stake owned by the promoter group of Cinemax at a price of Rs 203.65 for an all cash consideration of Rs 395 crores. The acquisition shall be followed by an open offer to the public shareholders of Cinemax India Limited for an additional 26% stake for cash, as per SEBI takeover regulations.

Jet Airways -
The much talked about Jet-Airways-Etihad  deal may be structured in two tranches and will be signed within three months, exclusive sources told CNBC-TV18.  The deal is still at a due diligence stage, it is learnt. 

Jet Air and Etihad have not confirmed the stake sale news but sources say, the deal may be a combination of fresh issue and secondary sale of shares.

Promoter Naresh Goyal is likely to sell 15% directly in first tranche and Etihad will increase its stake further via a fresh issue. . Etihad is likely to hold up 23-24% stake post the completion of the deal since the Middle East-based carrier is not eyeing a majority stake in company.

Proceeds of the stake sale will be used to retire Rs 12,000 crore debt, Jet has on its books.

Apollo Hospitals Enterprises -
CLSA Capital Partners, the alternate investment arm of the Hong Kong-based brokerage firm, is selling its 6.15 percent stake in India's Apollo Hospitals Enterprises

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.

GMR Infra –
Maldives Govt. has terminated the USD 500 million GMR airport project. GMR along with its Malaysian partner Malaysia Airport Holding Berhad, had won the contract for developing the Male International Airport during Nasheed's regime and it was the biggest single FDI into Maldives.

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.

KP IT - @127 for TG 140+ SL 117

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 (126 on closing basis, volatility SL 123)
Nifty Call Spread on 29 Nov 12 – 2 lot of each 5800PE @ 10 – SL hit @ 4, booked loss of 600/-, 5800CE @ 10 – Booked profit at 33, profit – 3300, TOTAL PROFIT 2700/ on investment of only 2000/-

Today’s Pick (Intraday to 1-2 sessions) –
I am trying to start this section but range bound session is not permitting. So today just giving you small details, from next day we will have calls with details.


Today’s MG Mantra
Nifty has ride 180+ points so now it would need a bit rest till FDI discussion. Trade with select stocks only.

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. Indian retail investors tend to lose in stock markets: Study

    1. Great Soumik, what we discuss repeatedly its a technical description of that.

  2. Best wishes mudraji.I m Busy wth exam duty. Latest trend i fibd glaxo pharma will good run to 2500. Couple years back i purxhased both glaxo pharma & gsk at same for good dividend. Gsk already overvalued. Market has to justify glaxo pharma. Ppl hav gr8 liquidity can buy...wait. Now MG sir have look after it.

  3. Hello sir ,
    So mkt moved up and it was not a regular expiry yestarady .
    Lets see if its a regular friday or not...

    Some problem with net at my end .(CHECK MAIL)

    Textile stocks are showing buying interest these days .

    Thank you.

  4. Metal cos going up as mining ban in Goa can be lifted ...

  5. Momentum call for blog members - cover ur losses (if made)
    ITC showing weakness, one can short @ 197.5 for TG 190 SL 302

  6. Hi MG,

    today is MSCI index addition,

    UBL, DEVIS, HDFC, TV18, TATA Motors, all will be volatile between 2:45 PM tp 3:15 PM.

    All the stocks will go down by 5-10% @ approx 2:55 PM and will again bounce back at 3:02 to 3:15 PM.

    So one can buy around 3 PM these share once down by 5-10% and again sell at 3:05-3:15 PM.

    This is because FII and DII will be selling their current holding and buying the same in MSCI index

    1. Dear IT can you elaborate about how exactly it will work and about news confirmation (not need source, want justification from your end)... reason if its true then we can have good earning opportunity.

    2. Hi ITDumps ,
      It would nice if you elaborate it .
      que in my mind : Will selling happen at a fixed time?
      Thank you.

    3. Hi,

      Yes, this trading will happen exact between 2:50 to 3:15 PM....Go to below page for MSCI confirmation.

      Normally when MSCI adds new script to their index (it happen every six month) today @ month end MSCI will add those shares in their index, then FII and DII wants buy it. But if they all start buying it CMP then all shares will go up by may be 20% or so.
      and it will be costly also for them.

      So they normally short that shares around 2:58 PM so that they can get it @ low price and cover it (BUY) in MSCI index by 3:02 PM.

      You can see at yesterday's close DIVIS and UB gone up and today they are up by 20-30 rs. Just because of these are new addition in MSCI index.

      Also MSCI has downgraded (rating) some stocks and upgraded some. So downgraded shares will fall as FII and DII will remove it from their portfolio and rating upgraded shares will go up.

      If you want to verify this, then check last times MSCI news (May 2010) and see how Godrej consumer behaved on that day.

    4. sorry, last time MSCI trade was May 2012 not 2010

    5. But many thinks it wont have any big affect. May be a small dip of 0.5 to 1% as per their holding capacity.

    6. Great job IT, finally TM proved it right while other scrip didnt show that much effect.

    7. Please keep us informing about such activities as this is the month when many more FII will do the same, this time we will try to take advantage of that.

  7. This comment has been removed by the author.

  8. My friend says, from the past experience, market used to go down due to profit booking at the year end, i.e December. Is it true?

    1. Dear Jaga - haven't you read Market outlook ? everything is clear there.

  9. NIB discussion will be on next Thursday.

    So, BHEL and many infra stock will go up. See BHEL is already up by 10 rs today. (it was in down trend since Monday, although market was up)

    My target for BHEL by nest Wednesday is 240. SO you can buy 240 CALL. And sell on Wednesday morning.

    On Wednesday close (2:30 PM) you can buy FUT also, as NIB discussion is on Thursday, so with hope BHEL will open in Green on Thursday.

  10. MG Sir,
    in nifty call spread on 29 nov 12 i think the profit is 1700 not 2700. because in 5800CE the profit is 33-10=23 points and in two lots it is rs 2300 and in 5800PE the loss is 600.So the total profit is 2300-600=1700 on investmest of rs 2000. if i am wrong pls clarify

    1. Thanks Vilas - yes you are right. Late night work - happens :)

      Everybody can do like what Vilas has done, i.e. if there's any incorrect info or mistake then plz notify me... dont fear I take all this as help from all of you... as still I am too a human... with full of mistakes like all.

    2. Sir ,
      what was wrong with ultratech cem today ..?
      wild movements ... even bse/nse closing price & charts , volume are super natural .

      Your call just doubled in last min...

      Thank you

  11. Rajvansi Ji, Thanx for your yesterday's suggestion on Suzlon. I already added suzlon @18 yesterday. Today it closed @19.55 with huge volume.

    Now thinking to sell it around 23-24 if this momentum is continued.

    1. Hello Rahul ,
      one thing good with you -- you view -- LONG TERM .

      There are many people who turned day traders from long term investors and vice verse (me too...)

      Sorry could not share my view yesterday due to technical prob (network)

      Yes , suzlon is a front line co in wind generation and also a global player .
      There is tremendous potential for growth in it for long term .
      The margins are not so good due to high material cost , but their patents & experience (brand) is good .
      My cousine works in suzlon (past 7 years) , some experience he shared with me --
      Suzlon needed large funds for new projects and thus they opted to give shares instead of pay/bonus .
      Since I was a investor at that time (& an BE electrical/suzlon was my dream co but why to work for peanuts) and suzlon was also a top traded co at that time (5 years back) I suggested him to en cash his dues by converting in to shares @ 350 level .
      And now its @ ___ levels .

      Ok , it not bad to buy a beaten down stock , but its a traders favorite and so when it came till 100 rs , even I bought huge quantity , but sold below 60 .

      See these midcap & small cap stocks when rise they run like very fast but also come down fast . So quick entry & exit is best .

      Where as large caps or blue chip stocks correct , but regain their levels atleast .

      Suzlon has a basket of FCCB's , unless and until it is cleared it wont appreciate much .

      Since you are a long term investor you can hold it , just dont put sl & keep accumulating at lower levels . In next 5 years you will see good levels .

      There are 2 stories in suzlon (you will not find it any where as i had a project on it)

      1 -- either the co will survive and rise and rise by clearing dues & become a debit free co .
      2 -- it will not able to clear dues and file for bankruptcy , this will trigger it up side as some major co will try to take over it .

      Probability of 2nd is less ...

      Thank you.

  12. Dear Don, Thanx for sharing your knowledge and experience. Similar to you I am also a fan of Suzlon just because its green energy business.
    I entered suzlon @58. It went down, I added again & again just because Sometimes your feelings affect your decisions.
    Meantime, I got small profits around 40-45, 25-30 levels.
    Now my avg. price is 38.

    At present, It seems that solar energy is getting more popular than wind energy. But I still have feeling that It will never be like CRT monitor(after LCD). Both solar and wind energy can co-exist.

    Out of your 2 stories, 1 st one will take time (if it happens).

    Anyway I don't have any hurry.

    Also, with this blog I am getting mid-term gains that can erase my other losses in a year time. Thanx a lot to MG sir and other blog members.

    1. Dear Rahul - I have one point here. My funda is when stock is not volatile (watch BGR Energy to know what exactly volatility is) then I exit above 20% loss, averaging is bad technique like see Suzlon itself, your avg buy price is 38 an stock is quoting 19, mean still you need 100%+ move to come to NPNL.

      In future apply this theory - exit whenever slow move stock goes below 20-25%, very few stock make a comeback fast after such a fall.

      You can also use hedge technique if your investment size is big.

    2. You are correct sir, But it needs courage to book loss of 20-25% for the people like me. You can say this is my weakness and not to book loss thinking that one day scrip will come to that level.

      As this worked in case of JP Associates. I still have share of JP Asso purchased @125 on oct2010, then @101 on jan2011 then @70. Meantime I got profit in it around 55 and 75 levels. Now my avg. price is 95. Thinking to sell one more chunk around 100.

      But as you told Averaging is a bad technique, this may not happen with all other scrip like HCL Info, Jyoti Structures, Sesa Goa and Suzlon.

      Anyway, I got very good teacher and guide in you. I will follow your suggestion in future.

    3. Dear Rahul, as mentioned scrip should be volatile but suzlon is out of volatility, my very personal view - suzlon is out of that, whenever it moves up small, it goes down more and still there's no fix view how they will get out of debt.

      Secondly my view different - if buy goes in wrong direction, I book loss and try to manage those losses in another stock.

      Like what we do in FNO, at the end of expiry we need to book loss or profit. So if loss we try to take new position to cover those losses.

      We need to put aside our emotion in stock market else only loss will be there.

      Another view that - if I buy 2K stock of 100Rs then my 2L will blocked and secondly when it comes to half of its price then it will be 1L. Instead if I have exited at 40K loss then I could have buy it again at 50Rs and when it will bounce back to 100 I will be in good profit rather than NPNL.