Morning Bells (7 Dec 12)

Good Morning Friends.

Excellent definition of friend – A friend is a gift given to you by your own behaviour.

Oh, market was just heading for profit booking ahead of Rajya Sabha voting tomorrow and at right time all of sudden BSP announced that they will support the Govt. in the retail FDI vote in the Rajya Sabha . This will give the Govt. a majority and the UPA is set to win the vote and market recovered from a 70 point dip to 80 point up, what a swing.

The day began with a positive gap but succumbed to selling pressure immediately following offloading in the Telecom, IT and the Healthcare segment. Nifty hit an intra-day low of 5838 and then Nifty bounced back led by the interest rate sensitive stocks like Banking, Auto and the realty stocks.

RIL, ICICI Bank, Tata Steel, Tata Power, NTPC, Tata Motors, Maruti Suzuki, Dr Reddys Lab, SBI were among gainers in Sensex and Nifty. 

Infosys, TCS, Wipro, Sun Pharma,Coal India, HDFC Bank, M&M, Bharti Airtel, Hero MotoCorp were among losers in Sensex and Nifty.

Dr. Parthasarathy Shome has been appointed as Adviser to Finance Minister, in the rank of Minister of State, co-terminus with the period of office of the Finance Minister. Dr. Shome was responsible for constituting guidelines for General Anti Avoidance Rules (GAAR) under the Shome Panel set up by Dr Manmohan Singh. So seems Govt is seriously looking to roll out GAAR from April 2014.

The Cabinet has deferred its decision regarding National Investment Board (NIB). Reports stated that Cabinet also renamed it as Cabinet Committee on Investment.

On Domestic front – RBI monetary policy review on Dec 18 where rate cut is unlikely.

On global front Employment Situation (Dec 7) of US will be eyed.

According to Jan Dehn, co-head research, Ashmore Investment Management, feels that a deal on fiscal cliff will be reached by January. He is of the view that both the Democrats and the Republicans have too much to lose if they don't find an agreement.

So, overall, as said this week was full of excitement and traders enjoyed the volatility.

MARKET OUTLOOK –

Market seems in uptrend and participant eagerly waiting for breakout of 6000, but it may not be that much easy. The winning streak on FDI will give a lot of courage to Govt. to go ahead quicker, maybe during the session or post session, with a lot of things, which are still incomplete, to revive the economy back into action

So now market again will turn to further new flow i.e. proceeding for pending bill in parliament and will look for global cues.

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 was down 8% and ended at 15.24 and PCR is down 0.75.

The rupee gained 0.75% and traded at 54.13 against previous close 54.54 as per NSE data.

FII DERIVATIVES STATISTICS FOR 6 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	34282	1017.94	37919	1124.72	385129	11341.41	-106.78
INDEX OPTIONS	634171	18700.81	638637	18835.08	1425103	42302.53	-134.27
STOCK FUTURES	37642	1089.41	51388	1553.95	1103479	32087.22	-464.54
STOCK OPTIONS	64294	1805.11	66887	1872.77	62374	1753.17	-67.66

FII sold 3637 contracts worth Rs. 106.78 Cr. and booked profit on longs.

NIFTY OUTLOOK –

Now all is set good for time being and most of it was already priced in though a bit doubt always remain there so this volatility was just part of that. Now I guess traders can go for profit booking and market may see a small correction. May be it can take place today or next week. Going forward 6050 – 6100 is on card.

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

So for short term view Nifty seems in the range of 5785 – 6000.

6000CE has highest OI of 78.49 against Tuesday OI of 82.11 meant 3.6 Lac decreased in OI, so traders have booked profit on their longs. Profit booking also seen in 6100CE while 2.54 lacs contracts added to 6200CE.

While on short side only major addition was seen in 6000PE where 4.29 lacs contracts added. 5500PE still has highest OI of 69.11 Lacs while 5800PE has second highest OI of 63.48 lacs.

Resistance comes to 5969 – 5990 – 6007 - 6072 and Supports comes to 5865 - 5838 – 5800 - 5785.

Opening seems flat and under pressure as guessed all was priced in and people can go for profit booking, secondly its Friday too, so market remain choppy. People who have already initiated longs need not to worry at the moment and can keep SL 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 will help you in taking positions.)

Realty & Infra –

After winning FDI vote in LS and post RS vote win Realty, Infra and all rate sensitive stock to perform excellent in coming days.

Our y’day’s Reliance Infra call rocked and hope you would have earned good.

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.

KFA –

Looks attractive post Eithad talks and seems Eithad looks serious player and taking things serious to enter Indian market. If it comes to brand recall then KFA has good brand recall value among its competitors.

United Spirit –

Is giving good moves, intraday traders can watch 2-3 days its movement and then can earn good chunk of amount in intraday to one week swing trading.

Auto Sector –

Post FDI approval now its turn for beaten sectors to out perform.

Tata Motors -

TM will among those stocks who can get benefit of it. It may move to 287-289 level in coming days and then to 302. Keep SL 262.5 and then 254.

============ 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.

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)

DB Corp – @219 TG 140+ SL 201 (1-4 Week)

SBI call spread – 2100PE @11 SL 4, 2400CE @23 SL 10 (hold till next instruction)

Rel Infra – @501 Updated SL 512 Updated TG 520+

Hero MotoCorp – @1820 SL 1800 TG 1875+ (Positional)

Nifty 6100CE - @28 (2lot) – Booked loss at 18.

============ 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) –

For more update – stay on blog during market hours.

Today’s MG Mantra –

All were priced in and now Nifty needs a small correction before making new high of 2012. Its Friday, so short term trader can book profit.

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.