Morning Bells (11 Feb 13)

Good Morning Friends.

Prayer is not an attempt to change the GOD’s mind, but its an attempt to let GOD change our mind in positive way. Good Morning.

Oops! Like you all, I also did same mistake of most of you on Friday. Instead of almost surety to see Nifty below 5900 once it breaks 5935, I was hoping if Nifty hold 5900 mark and some of my positions turned in loss. (smiles)

Well, news to notice is that the IMF may say that the slowdown in the India’s GDP growth is more due to domestic reasons than global factors. But for the market, it seems like the global turn of events has cast a shadow which as the indices remain in consolidation mode after hitting a multi-month highs in January 2013. Eurozone was back in the news for all the wrong reasons. Political risk has risen after a banking scandal in Italy hurt sentiment. Corruption allegations came to the surface for the government of Mariano Rajoy in Spain. While Spain averted the need for a sovereign bailout from its European Union partners, it has had to resort to seek a bail out for its banking sector.

Regarding GDP Nos, its important to notice here that sentiments were hurt on the macro front with the latest official estimate pegging GDP growth at a mere 5% in 2012-13, the lowest in a decade and even lower that the RBI’s projection of 5.5%.

Not happy with CSO's growth projection, Finance Minister P Chidambaram today said there are signs of upturn in the economy and it is likely to grow at a higher rate of 5.5 per cent this fiscal and further improve to 6-7 per cent in 2013-14.

"While 5 per cent growth rate of CSO is low and is a matter of concern...we believe growth will be closer to 5.5 per cent rather than CSO's estimate of 5 per cent", he said while launching the Rajiv Gandhi Equity Savings Scheme (RGESS) here.

Gainers – TCS (up 5.5%), HDFC (up 4%), HDFC Bank (up 1.5%), Tata Motors (up 1.3%) and Wipro (up 1.2%) were among gainers in Sensex and Nifty.

Losers - Cipla  (down 8.1%), Reliance Power (down 7.4%), BHEL (down 7.2%), Reliance Capital (down 6.6%) and NTPC  (down 5.7%) were the major losers in Sensex and Nifty.

Sectoral – all sectors ended in the red with consumer durables, power, metal, and oil & gas losing around 4%.

Equity Dipped –

Dragged down by state-owned ONGC, the combined market valuation of top six Sensex companies plummeted by Rs 54,994 crore last week amid an overall weak broader market.

ONGC, Coal India, RIL, SBI, ITC and ICICI Bank saw erosion in their market capitalisation. The gainers were TCS, HDFC, HDFC Bank and Infosys.

Overall, the BSE 30-stock index, Sensex, fell by 1.49 per cent to end the week at 19,484.77.

Energy major ONGC saw the steepest fall of Rs 16,256 crore from its market value which came down to Rs 2,68,171 crore.

Its scrip slipped nearly 6 per cent to Rs 313.45 during the week.

Coal India Ltd's m-cap dropped by Rs 10,485 crore, to Rs 2,14,219 crore.

The market value of RIL plunged Rs 9,464 crore at Rs 2,79,614 crore, while SBI's value dipped Rs 8,288 crore at Rs 1,53,427 crore.

ITC m-cap tanked Rs 5,794 crore at Rs 2,37,762crore, while ICICI Bank lost Rs 4,707 crore to Rs 1,30,347 crore from its market valuation.

In contrast, TCS added Rs 15,041 crore to Rs 2,78,561 crore in its m-cap, while the value of HDFC surged Rs 4,402 crore to Rs 1,24,390 crore.

HDFC Bank added Rs 2,521 crore to Rs 1,54,014 crore, while the value of Infosys jumped Rs 1,094 crore to Rs 1,60,211crore.

On Domestic Front –

Industry body CII today asked the government to extend tax benefits pertaining to mergers and amalgamations (M&As) to all businesses such as telecom, sports, IT and entertainment.

Market regulator Sebi has allowed stock exchanges to introduce incentive schemes for brokers and intermediaries to enhance liquidity in illiquid securities in the equity cash segment.

On Global front –

The investment by overseas investors into Indian stock market since the beginning of 2013 has crossed USD 7 billion mark, out of which more than USD 3 billion were pumped in the month of February alone.

Foreign Institutional Investors (FIIs) infused a net amount of USD 3.23 billion (about Rs 17,211 crore) during February, taking the total for 2013 so far to USD 7.29 billion (Rs 39,270 crore ) for Indian stocks.

Market analysts attributed strong FII inflows to signs of easing interest rates by the Reserve Bank and the subsequent impact of improved liquidity position.

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

As I had warned you all to watch Nifty 5935 mark closely, if it breaks Nifty will head below 5900 mark, again comes true. Since last couple of months we are bang on Nifty predictions. But as told “Oopdesh hi nahi Anukaran bhi chahiye”…. same has happened with me too.

Finally Nifty slipped below the crucial 5900 mark intraday, all sectors ended in the red with consumer durables, power, metal, and oil & gas losing around 4%. Which itself meant market is slowly-slowly inching towards 5800 Mark. It will find support around 5840, if broken then 5780-5800 is possible and seems a stoppable mark.

So, now I think its time to sell on rally or take short positions with SL of 6000. Also for cash segment this downside can be used to buy, people who have missed the rally in 2012 can join the party mean one can watch 2 levels, 5840 & 5780-5800, these two levels can be watched carefully and one can initiate fresh longs in this range, as both seems good support and market can bottom out from here. They can keep SL 5870 itself.

This is also week when industry heavyweights can disappoint and shake the market. ONGC (can be positive), SBI (NPA can increase), Tata Motors (Total sales could be disappointing), DLF will announce their Q3 Nos. and most of them can disappoint.

So, Benchmark indices may turn volatile in the coming week amid various economic data points to be announced. The IIP numbers will be announced next week. The other data points are WPI, Import-Export numbers for the month and CPI. A host of results will continue to flow in. But the market looks unlikely to stage any rally in the coming week.

The INDIA VIX on NSE was up 1.81% and ended at 15.16 against previous close of 14.89.

FNO PCR is 0.90 against previous close 0.86.

Indian Rupee weakened against USD by 28 paisa and was trading at 53.50 against its previous close 53.22/23.

S&P 500 (US) was trading at 1517.93 down 8.54 then its previous close at the time of writing M Bells.

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

Keep eye on 5900 then on 5840 & 5780-5800, as market can not fall straight so there is possibilities of small rally which can be used to book profit and then again re-enter at lower levels.

Nifty is in range of 5780 – 5840 - 5900-5950-6040-6150-6190 for current series.

Resistance – 6013 – 5983 – 5943 and Support – 5873 – 5843 - 5803

Opening - seems flat and range bound as market will wait for further direction.

========================  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.)

Sun Pharma –

Sun Pharmaceutical Industries Ltd.and Taro Pharmaceutical Industries Ltd announced that they have mutually agreed to terminate their merger agreement, announced in August 2012, pursuant to which all shareholders of Taro (other than Sun Pharma and its affiliates) would have received a cash payment of $39.50 per share upon the closing of the merger.

Each of Sun Pharma and Taro (at the direction of the Special Committee) agreed that terminating the merger agreement was in the best interest of the respective companies and shareholders.

NTPC –

A USD 2.1 billion share auction in state-run power utility NTPC was fully covered on Thursday, provisional data from the Bombay Stock Exchange showed.

By 3:05 p.m., the single-day auction had received bids for 840.65 million shares at an indicative weighted average price of Rs 145.46 per share. Final bid numbers will be available later on Thursday.

The government was selling 783.26 million shares, or 9.5 percent of the company's stock, at a minimum price of Rs 145 per share for bids.

Under new rules announced last month, the SEBI allowed bidders at share auctions to modify or cancel their orders if they deposit 100 percent of their order value upfront. Investors who bid without making a deposit are only allowed to make upward changes to their bids.

MCX -

MCX-SX (India's New Stock Exchange) - the third exchange after BSE and NSE - is set to commence live trading in the capital market's cash and futures & options (F&O) segments with effect from February 11, 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.

Axis Bank 1500CE – @19 TG 27+ Updated SL 12 (Active from 7 Feb 13)

=============== 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)

Satyam Computer – @103 TG 130+ SL 112 (Active from 15 Dec 12)

On Mobile – @44 TG 60+ Updated SL 39 Qty 2K (Active from 01 Jan 13)

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

(If someone find any error in PL, please draw our attention)

MG Blog Jan Series Total Profit = +25,900 (Cash +9,650.00 & FNO = +16,250)

Billionaire Club (Jan +51,000) + Feb Ser. = +7500

(Axis bank 1450PE = 3000 + Rel Infra fut 4500 = 7500)

Today’s MG Mantra –

Don’t go against market sentiment. Market creating base around 5950.

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.