Morning Bells (4 Dec 12)

Good Morning Friends.

When the voice on the inside becomes more profound and clear than the opinions on the outside… then you have mastered life.

So finally after previous week’s 4% rally the Indian stock markets took a breather on Monday, after attempting to hit the 5900 mark thereon markets were on a constant declining mode as market participants preferred to take some profit off the table.

Profit booking was seen in the Banking, FMCG and telecom stocks while some buying seen in the Realty, Metals, Power and the Consumer Durables stocks.

On eventful last week regained its recent high of 5815 with strong weekly close at 5880, rupee posted strong reversal helped the Indian stock market.

Well, scene is still not changed though we have reached to 5900 mark but if we look, Indian economy continues to remain under pressure. There are lot of things which suspect investors for further move like risk of slippage in GDP growth below 5.5%, fear of overshoot in fiscal deficit above 5.8%, rupee impact on inflation, risk of delay in rate cut action from RBI; all these factors can put down investor’s sentiment in near term. Also the lack of political consensus on reforms and delay in financial support to core sectors of the economy are major factors to delay the recovery process. The current relief rally is driven only on the hopes that the worst is behind and the turnaround will be in sight.

Well now all eyes will be on FDI discussion which is slated to start in Lok Sabha from today and will continue till Wednesday. So market may see some volatile moves.

So nothing much to say about today and tomorrow as all eye will be on FDI in multi-brand retail discussion in Lok Sabha which have a discussion on December 4 and 5 while ajya Sabha has decided to have a discussion on December 6 and 7 on the issue under a rule that entails voting.

Key note on FDI discussion is - If government is able to push through some of the important reform initiatives, the markets will gain further and we can see some good strength especially in the sectors which beaten down like infrastructure, capital goods, public sector banks.

Market has also entered into a week which seems full of excitement as will react sharply on FDI discussion and imminent voting.

Right now market is stock-specific as investors react to monthly sales data for auto and cement companies.

On global front - according to experts global investors will also focus on continued negotiations over the so-called 'US fiscal cliff’.

More on global front, this week will see three market-moving data releases in the US -- ISM Manufacturing Index (Dec 3), Jobless Claims (Dec 6) and Employment Situation (Dec 7).

The outcome of the ECB governing council meeting in Frankfurt on Thursday will also keep investors on the edge.

So, overall, as said this week is full of excitement and traders need to be cautious as we have very important events as well as data this week which will influence the market for further move either side.

MARKET OUTLOOK –

Nifty closed flat down 9 points. Today market will show strength and will react sharply if anything see going against expectations. FII & DII both have fuelled market with the hope that UPA has done its homework before giving nod for FDI voting.

So today I don’t see any damage in market sentiment but yes one need to be cautious and keep tight SL as there’s always doubt i.e. if it doesn’t then what?

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 up 3% and ended at 15.62 and PCR is 0.93.

The rupee lost 0.51% and traded at 54.89 against previous close 55.61 as per NSE data.

FII DERIVATIVES STATISTICS FOR 3 Dec 2012
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY		Difference
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	24989	727.92	33956	978.97	376958	10987.25	-251.05
INDEX OPTIONS	313370	9174.66	290722	8527.81	1335125	39215.11	646.85
STOCK FUTURES	38299	1110.23	40909	1183.47	1058871	30141.28	-73.24
STOCK OPTIONS	34952	952.36	38475	1056.32	45142	1247.16	-103.96

FII sold 8967 contracts worth Rs. 251.05 Cr. and OI increased by 4927 contacts in Index Futures. So y’day FII booked profit on longs in Index futures.

NIFTY OUTLOOK –

Bulls seems tired y’day and as per charts bears can gear-up to take the charge, bull will try to ceiling 5800 for bears and 5785 will act as strong support for short term traders, So for short term view Nifty seems in the range of 5785 – 6000.

6000CE has highest OI of 73.94 with fresh addition of 8.29, while 9 lacs contracts added to 6100CE @ premium of 22. On short side 5500PE to 5800PE has almost equal OI around 58 lacs. Today huge addition of 8.44 lac seen to 5500PE & 7.26lacs to 5800PE, I guess this would be in the hope any disappointment on FDI.

Nifty Future Dec series OI is 1.97 crore with fresh addition 3 lacs.

Now Nifty will face resistance at / in the range of 5950 & 5980 while 5785 is the SL for longs for short term trend.

As told Nifty giving signal for correction and seems under pressure, so one should need to opt cautious approach and should wait for FDI discussion result, this will be a key signal to move market either side.

Resistance comes to 5895 - 5920 – 5958 - 5890 and Supports comes to 5850 - 5830 – 5808 - 5785.

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.)

Realty & Infra –

Till the investment board is set up for infra specifically don’t expect a major move in infra stocks at least over the next few weeks.

Realty sector is moving and as told earlier around expiry of current series would be good time to book at least partial profit in realty stocks.

Life Style Segment –

There’s news of good salary hikes and signal of increasing life style expenses. One can keep eye on Mahindra Holidays & Thomas Cook.

United Spirit –

United Spirits has scaled multiple highs in recent weeks, stock seems over priced in short term view and may see correction till 1900.

Auto Sector –

TVS Motor –

TVS Motor Co said it expects to finalise before the end of the ongoing fiscal a partnership with BMW for collaboration in two-wheelers. "Talks are on (with BMW) and we expect something to materialise before the end of the ongoing fiscal," TVS Motor Co President (Marketing) HS Goindi told media. The company is in talks with the German firm, which has also started selling high-end performance bikes since 2010 in India.

============ 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 doesn’t shows strength.

IMPORTANT NOTICE – Market may react sharply on FDI voting result, so if it falls down during voting then one needs to keep strict SL (8-10% from CMP) on all open position, as then we may see a deep correction in Nifty and mid caps will be key sector which will be most target most.

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 (Has given buy signal and may see some move in this series)

Jindal Photo - @145 for TG 160+ Updated SL 126 (126 on closing basis, volatility SL 123)

ITC – Shorted @298 for TG 290+ SL 303 (plz exit in morning trade either at cost or min profit or min loss)

============ INVESTMENT BASKET ============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+

Satyam Computer – @103 TG 130+

============ TODAY’S PICK ============

(Intraday to 1-2 sessions) –

WILL UPDATE DURING MARKET HOURS, AS NEED TO CHECK MARKET SENTIMENT

Today’s MG Mantra –

To all blog members & visitors, though there’s no big worry seems but market will react sharply on FDI, so if it falls down during voting then one needs to keep strict SL (8-10% from CMP) on all open position.

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.