Thursday, 17 January 2013

Morning Bells (18 Jan 13)


Good Morning Friends.

RISK is my life, POSSIBLE is my hope, IMPOSSIBLE is my enemy, DANGEROUS is my game. It’s MG, and I am like that only.

Govt. is continue with its further agenda. Market players will be happy but the overall citizens to face the disadvantages of such decisions. Some of you would have remember my post on MoneyControl when Mr. P.Chidambaram was appointed as FM – view was clear, he’s master mind in creating taxes, even with such a move which general man can’t imagine and can understand at the time of announcement.

Well, The Indian stock market recovered smartly to end the day with gains despite a weak start. The main reason for this recovery and healthy gain was deregulation of diesel prices, the government y’day authorized Oil Marketing Companies (OMCs) to raise diesel prices by a small amount periodically. The OMCs are free to raise prices, technically as early as midnight. They could continue raising prices till they cover their present per liter loss of Rs 9.60. With measures like this, the Street anticipates a lot more reformist policies coming during the Union Budget. 

Also, Gov.t will not factor the impact of diesel price hike by oil companies while computing the oil subsidy bill for the current fiscal, Finance Minister P Chidambaram said today.

Govt. has told state fuel retailers to raise diesel prices by 0.40 rupees to 0.50 rupees a litre every month to gradually align them with market rates.

To compensate the move Govt. reportedly hiked the cap on subsidised LPG cylinders from 6 to 9. Reports said that Consumers will get a quota of five subsidised cylinders between September 2012 and March 2013 and from April 1, 2013, they will be entitled to nine cylinders per annum. There will be no change in LPG and kerosene rates, Oil Minister M Veerappa Moily reportedly said.

My View – Since govt. don’t want to be blamed and to face strong oppose by citizen its passes the control to OMCs, and still OMCs will still seek signals from government for any price hike. It shows political incapability to take any tough decision. So don’t get too excited by decision right now, reason is simple one - When petrol was deregulated, OMCs had no courage to increase the price and always looked at Govt. to give signals for an increase. But yes its well planned and well decided roadmap for next inning i.e. next Govt. will take benefit from these announcements/decisions.

The Union Finance Minister P. Chidambaram said that the fiscal consolidation roadmap for Centre has been laid out and the Government will not breach the Fiscal Deficit limits. The Union Finance Minister highlighted the challenges that economy is facing today and the urgency of reform measures needed to address these challenges.

India Ratings says that the 2013 Outlook on both public and private sector oil and gas companies is Stable despite issues like high gross under recoveries (GUR) of public sector companies (PSCs) and a still uncertain global macro-economic environment.

The December factory output is likely to remain in the positive territory and in the range of two-three percent but in the months to come it is expected to remain "subdued", global research firm Dun & Bradstreet says.

Gainers – RIL, Wipro, TCS, Infosys, Tata Power, Dr Reddy’s Lab, SBI, Tata Steel, Tata Motors, Bharti Airtel, NTPC, Sterlite Inds, Gail India were among gainers in Sensex and Nifty.

Losers - Sun Pharma, Hero MotoCorp, BHEL, Bajaj Auto, M&M, ICICI Bank, L&T, HDFC were among losers in Sensex and Nifty.

Sectoral - FMCG, Consumer Durables, Bankex, PSU, Power, Realty, Metal, IT, Auto, Oil and gas indices are the gainers while Healthcare, Capital Goods indices are the losers.

On Global front –
Asian markets were lower ahead of key Chinese economic data including fourth-quarter GDP, December industrial output, retail sales and house price on Friday.

US stocks hit a five-year high at the open on Thursday after better-than-expected results from online marketplace eBay and as data showed first-time claims for unemployment benefits dropped to a five-year low.

=========================  MARKET OUTLOOK  =========================

It’s a blockbuster Friday today because industry heavyweight like ITC, Wipro, HDFC Bank & RIL (Fri 18 Jan) will post their quarterly no.s and I am expecting no one of them will disappoint.

After disappointing statement of RBI governor today Govt. tried to fuel the market and market recovers in late trade.

The INDIA VIX on NSE remained flat and ended at 14.01 against previous close of 13.99.
FNO PCR is 0.92 against previous close 0.93.

Indian Rupee gained smartly around 30 Paisa against USD y’day and was trading at 54.39 against its previous close 54.79, highest level in more than a month.

S&P 500 (US) was trading lower at 1479.79 up 7.16 then its previous close at the time of writing M Bells.

Now next trigger is RBI policy on 29 Jan 12. Here please remember I am expecting to cut the repo rate by 25bps in the upcoming monetary policy and no rate cut.

==========================  NIFTY OUTLOOK  ===========================

Once again Nifty closed above/in the range of 6030-6040. Now it would be interesting to see whether buying comes in the range of 6030-6070 or will see profit booking once again. As told trend turning slowly to sell at higher levels till 6070 is not taken out on closing basis, then Nifty will switch to 6050-6150 band. For longs 5935 is SL and 6085 for bears.

Buying in selective stock will continue.

FII sold 3276 contracts of Nifty & Bank Nifty futures worth Rs. 103.06Cr. with net OI increased by 9254 contracts indicating FII have booked profit in longs. Volume also suggesting lake of participation at higher levels.

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

Resistance – 6055 – 6091 – 6130 and Support – 6000 – 5961 -5935

Opening seems a bit positive (12-15+) after diesel price hike and momentum remain positive ahead of industry heavyweight but a volatile session is expected.

=========================  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.)

OMC –
Now analyst get enough time to analyze the Govt. decision. Its good in long term but for short term its remain subdued, so profit booking is not ruled out in OMCs

RIL –
Declining KG-D6 volumes and muted gross refining margins (GRMs) are likely to impact Reliance Industries '(RIL's) December quarter earnings.

Analysts on an average expect a 17% year-on-year jump in net profit to Rs 5,200 crore. Revenues may grow around 6% to Rs 90,000 crore

Banking –
After statement of RBI governor now view is neutral on banking stock. But I believe that the public sector banks are still plagued with non-performing assets (NPA) and therefore, they would like to stay away from this sector at the moment.

HDFC Bank –
India's second largest private sector lender HDFC Bank is likely to report a robust growth of 29% year-on-year in its third quarter (October-December) net profit in 2012-13. Net interest income or the difference between interest earned and paid out, would grow 25% y-o-y on the back of strong credit expansion, suggested an analyst poll estimate by CNBC TV18.

Telecom –
Govt. approves 50% cut in CDMA spectrum reserve price.

Finalisation of Revised Reserve Price for the Auction of Spectrum in 800 MHz band (CDMA) for all service areas, since no bids were received during auctions held in November, 2012

Tata Motors –
Tata Motors was slipped y’day as its global sales decreased 13.88% in December 2012 to 98,968 units over the same period in the previous year.

But today it back on track when TM announces Jaguar Land Rover India, confirms it reached wholesales of 2393 cars in 2012, compared to 1813 cars in 2011, up 32%.

Hero Moto –
Hero MotoCorp missed street expectations by a wide margin as high costs and increased advertising and promotional spends to boost sluggish growth dragged third quarter net profit down 20 percent year-on-year to Rs 488 crore.

The India's largest two-wheeler maker's net sales for the Oct-Dec quarter were up 3 percent to Rs 6,151 crore.

Analysts on an average were expecting net profit at Rs 608 crore on revenue of Rs 6,142 crore, according to a CNBC-TV18 poll.

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

Wait is the winning key in stock market, don’t get impatience.

============ 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 – 330 (Gain -1%)

Satyam Computer – @103 TG 130+ (Active from 15 Dec 12) CMP – 115 (Gain +11%)

On Mobile – @44 TG 60+ SL 41 Qty 2K (Active from 01 Jan 13) CMP – 45 (Gain +2.5%)

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

============ PL Sheet (started from Jan 2013) ============
(If someone find any error in PL, please draw our attention)

MG Blog (Total 25,650) –
Cash = +9,650.00
FNO = +11,500 + 4,500 = 16,000

Billionaire Club
TOTAL = +29,750.00 + 14,750 = 44,500

Today’s MG Mantra
Still one need to remain cautious on higher levels till 6070 is not taken out on closing basis.

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.

11 comments:

  1. good morning MG sir..
    i have bought pantaloon fut @ 265 on 15/01/2013.
    please suggest what i shud do?
    your reviews are truly helpful..thanks sirjee....

    ReplyDelete
    Replies
    1. Hi Yash, where was you few days back, I had posted Rel Capital & Rel Infra call specially for you.

      PNR - is range bound, pattern its forming if continue then it may reach around 232 level where it can find support. First small support comes around 241, watch this level closely.

      No big announcement or news at the moment - view is purely on technical.

      short term remain subdued. For mid term one can hold.

      Delete
  2. Hi MG!!
    I missed ur Satyam Comp call...can i buy it now..
    & what about ur other 2 calls...wats ur approx time frame for the targets...

    I'm not very good in stocks..can i also trade in future??

    ReplyDelete
    Replies
    1. I am bullish on all. As its in Investment basket itself mean it will take time and one can accumulate for short - Mid term view.

      Delete
  3. MG, also could you please give ur opinion on Lupin & Wipro...what could be their near term target ??

    ReplyDelete
    Replies
    1. Wipro we started 404 and exited y'day. For others would be good to ask in weekend or in evening in weekdays as during mkt hours not possible to concentrate on other scrips.

      Pharma I dont track.

      Delete
  4. Dear MG! I bought Dhanlakshmi bank and Hexaware. Currently they are trading at my buying price, should I continue holding them. Kindly suggest the time frame.. Thanks..

    ReplyDelete
    Replies
    1. If its in cash then you can hold. For Hexa keep SL 82, Dhan a either deep SL 54 or tight SL62, if goes below 62, one can but around 2nd SL. remember to my personal view banks to fall around/after RBI policy.

      Delete
  5. Sir
    Where can we get information on company results with fast update?

    ReplyDelete
    Replies
    1. At BSE & NSE, refer our link section

      Delete
  6. guruji haat jod ke sorry....
    i was into formation of new office..as we r commission agents of yarn here..was staaying away from markets..though reading ur m bells silently..
    thanks for ur guidance sirjee..
    pls send me ur mail address on yashdurgiya@ymail.com
    wanna learn about ur billionare club..thanks again

    ReplyDelete