Morning Bells (04 Jan 13)

Good Morning Friends.

Your mind is your greatest friend, if you control it. But your mind is your greatest enemy if it controls you. Good Morning.

So finally Nifty closed above physiological level of 6000, first time in 2 years. Thought market seems in consolidation phase after a decent welcome rally in New Year. It was the third straight day of gains as the technology and Oil and Gas stocks kept the indices in the green. Throughout the day, profit booking was visible in banking stocks and momentum shifted to mid cap and small cap counters. Markets could continue its sectoral shift to high-beta sectors in the near term. Now immediate resistance seen for Nifty at 6090/6100.

RIL, Infosys, Wipro, NTPC, TCS, SBI, Bajaj Auto, NTPC, Tata Steel, Dr Reddys Lab, ONGC, Dr Reddys Lab, Bajaj Auto, Coal India,  are among gainers while Bharti Airtel, ICICI Bank, Tata Power, Sun Pharma, BHEL, Gail India, Hero MotoCorp, Tata Motors, HDFC Bank, Maruti Suzuki, ITC, M&M are among losers in Sensex and Nifty.

Sectoral wise Oil and Gas , HC, PSU, FMCG, Power,Realty, Metal, IT, Teck, Oil and Gas, Metal, are the gainers while Auto, Power, Bankex, Capital Goods, Consumer Durables indices are the losers.

The Finance Minister was making his introductory remarks during his first pre-budget meeting with stakeholders from agriculture sector. The Union Finance Minister P .Chidambaram said that Agriculture and Allied Sectors are critical sectors for inclusive growth. He said that foodgrain production during last year 2011-12 was 257.4 million tons and during the current financial year 2012-13 equally good foodgrain production is expected.

Interestingly still there are many nervous investors, sitting on the sidelines all this while, have started to dip their toes into the equity pound, hoping not to dive into a January trap.

Forex - A good way to judge market momentum is to look at the currency market. The dollar index currently is at the crucial 80-mark. The Asian sales desks have already started advising caution, citing the dollar index rise as an indication and some experts expecting a 10% correction.

MARKET OUTLOOK –

Next trigger for market will be RBI monetary policy outcome.

Sakthi Siva of Credit Suisse expects that first half of the year will be good and the second half will be tough. I have a bit different view that first quarter of 2013 and there onward time will be tough as many big local & global event including parliament election possibilities are there.

I also feel one should be cautious in the previous week of RBI announcement.

Well, there are early signs of overheating in the Indian equity markets. Indian ADRs, particularly banks who are trading at a premium, are looking over bought. A lot of FIIs have already tired to participate in the Indian market, also, a lot of underperformers are moving now, which is usually considered as the last leg or last phase of a market rally. 

So here onward I am expecting a range bound & cautious move till important data & RBI policy and market will react on corporate No.s, Govt. data announcement and finally on RBI policy announcement.

The INDIA VIX on NSE was down 1.75% and ended at 13.47 against 13.71 and FNO PCR is 0.91.

Indian rupee dropped and ended at 54.49/50 than its previous close of 54.35/36.

S&P 500 (US) was trading at 1464.85 up 2.43 at the time of writing M Bells.

NIFTY OUTLOOK –

Due to decent rally and then fear of outflow in January putting investors cautious and people are looking for profit booking in sectors which run decent in current rally and feeling it could be a trap.

Nifty is in range of 5835-5885-5990-6040-6090 for current & next week.

Resistance comes to 6020 – 6034 – 6052 - 6090 and supports at 5992 – 5974 – 5961.

Opening seems flat and under pressure.

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.)

Jet Airways –

News appearing in a leading financial daily titled "Etihad may buy 24% stake in Jet for up to Rs. 18bn. in 10 days" Jet Airways (India) Ltd has clarified that while Jet (“the Company”) and Etihad are in a discussion regarding a potential investment by the latter in the former, these discussions have commenced recently pursuant to the liberalized FDI Policy which permitted foreign investment in the shares of an Indian airline. An appropriate announcement shall be made upon finalization of the terms of the investment with Ethiad as per legal and regulatory requirements.

Reliance Power –

Reliance Power commissions 600MW Butibori thermal power plant, the first 300MW unit achieved full load in earlier this year in August.

Reliance Power has synchronised the second of the two 300MW units of its Butibori Thermal Power Project near Nagpur in Maharashtra. The Unit has been synchronized on 2nd Jan '13 in the early hours and simultaneously coa firing of the unit has been achieved.

IT Sector –

Worldwide IT spending is projected to reach USD 3.73 trillion in 2013, a 4.2 per cent increase from USD 3.58 trillion in 2012, research firm Gartner said y’day.

Auto Sector – to shine in first quarter of 2013

Metal Sector - to shine in first quarter of 2013

Realty Sector - to shine in first quarter of 2013

Pvt. Banks - to shine in first quarter of 2013

============ 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 even small profit if Nifty doesn’t shows strength.

DB Corp – @219 TG 240+ SL 201 (1-4 Week) – TG Achieved stock made high 242 y’day. (Profit 250x21=5250)

Dishman - @118 for TG 130+ SL 107 (CMP 116)

Rel Capital – @498 TG 520+ SL 490

Rel Infra – @546 TG 565+ SL 537

ICICI Jan 1200CE – @27 TG 40+ SL 21 (2 lot)

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

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

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12) CMP – 341 (Gain +2%)

Satyam Computer – @103 TG 130+ (Active from 15 Dec 12) CMP – 108 (Gain +4%)

LakshmiVilas Bank – @105 TG 125+ SL 97 (Active from 27 Dec 12) CMP – 113 (Gain +5%)

On Mobile – @44 TG 60+ SL 41 Qty 2K (Active from 01 Jan 13) CMP – 48.45 (Gain +10%)

============ HOT SHOT ============

Keep eye on following stocks, if Nifty shows strength then these stock can give you reasonable return in very short term –

============ PL Sheet (started from Jan 2013) ============

MG Blog = +5250

DB Corp – @219 TG 240+ SL 201 (1-4 Week) – TG Achieved stock made high 242 y’day. (Profit 250x21=5250)

Billionaire Club = +17,000

Today’s MG Mantra –

Cautious approach today as profit booking is there and also its Friday.

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.