Morning Bells (22 Feb 13)

Good Morning Friends.

PERSONALITY is : Who we are and what we do when everybody is watching. CHARACTER is : who we are and what we do when Nobody is watching.

Nothing to say at the moment, after FED news global market turned into deep red. Benchmark indices logged their biggest single-day loss in seven months Thursday, as the slide in European shares unnerved investors in India as well.

Brokers said unwinding of derivatives trades could have been one of the major reasons for the collapse. It is not clear if foreign institutional investors were sellers in a big way, but many players feel that could well have been the case.

Unlike in the previous weeks when investors were mostly dumping midcap and small cap shares, Thursday’s crash was broad-based.

Market expectations are low ahead of the Union Budget next Thursday, as the widely-held view is that Finance Minister Chidambaram is likely to focus on fiscal consolidation through expenditure cuts. While this would help avert a sovereign rating downgrade, it would also delay economic recovery, say analysts.

FII flows are the biggest risk to the market. They have crossed 2 percent of market cap on a 12-month trailing basis, which has historically been a warning sign for prospective equity returns,” said a Morgan Stanley note to clients this morning, adding, “The trigger for a reversal of flows comes from a global risk off which is hard to time.

So far in 2013 alone, FIIs have net bought around Rs 43,000 crore worth of shares, coming on the heels of Rs 1.3 lakh crore of net purchases in 2012.

Gainers – Sun Pharma, Cipla, Bajaj Auto were among gainers in Sensex and Nifty.

Losers - RIL, Infosys, Wipro, NTPC, TCS, SBI, ICICI Bank, Tata Steel, Hero MotoCorp, ONGC, Dr Reddys Lab, Tata Motors, Hindalco Inds, Mahindra & Mahindra, Bharti Airtel, BHEL were the major losers in Sensex and Nifty.

Sectoral - Oil and Gas , HC, PSU, Power,Realty, Metal, IT, Teck, Bankex, Capital Goods were the major losers.

BUDGET –

“The Indian Railways ensures transportation services to citizens and businesses and enhances infrastructural backbone of the country. The railway budget is crucial to the running of this institution.  Overall, we would expect increased focus on modernization of the railways and increased spending on safety and infrastructure from the rail budget.

This would be achieved through allocation of funds for modernization and maintenance of infrastructure such as power equipment, signaling equipment, fencing lines, firefighting equipment etc.

On Domestic Front –

The Budget session of the Parliament began today. Minutes before the Budget Session of Parliament commenced, Prime Minister Manmohan Singh sought productive and constructive sittings of the two houses.

"We're looking forward to a productive, constructive session of Parliament. That's what our country's people expect," the prime minister told reporters outside parliament. He also urged the opposition to participate in "responsible dialogue and debate".

On Global front –

Global market is on correction.

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

There could be chances for a small bounce on account of encashment of shorts and just a little hope with budget. So probably Nifty should hold 5820/5780 till main budget day. And after the Budget it may be a different story if the global markets continue to correct and we have seen the fund flows beginning to reduce significantly. One could think of a bigger correction after the Budget.

The INDIA VIX on NSE was up 8.59% and ended at 16.94 against previous close of 15.60.

FNO PCR is 0.95 against previous close 0.94.

Indian Rupee – lost 40 paisa and was trading at 54.47 against its previous close of 54.07/08.

S&P 500 (US) was trading at 14.99 down 12.08 then its previous close at the time of writing M Bells.

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

Nifty is in range of 5780 – 5820 (100 DMA) - 5840 - 5900-5950-6040-6150-6190 for current series.

Resistance – 5977 – 5949 – 5900 and Support – 5824 – 5795 - 5747

Opening – Short term trend was already down, and now FED’s report has confirmed it. Opening again seems down and under pressure. There could be chances for a small bounce on account of encashment of shorts and just a little hope with budget. So probably Nifty should hold 5820/5780 till main budget day. And after the Budget it may be a different story if the global markets continue to correct and we have seen the fund flows beginning to reduce significantly. One could think of a bigger correction after the Budget.

========================  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.)

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

Jain Irrigation 65CE – @2 TG 3.5+ SL 2 Lot-1(Active from 19 Feb 13)

(Updated SL hit, No Profit No Loss)

=============== 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+25,900) + Feb Ser. = +6500 + 3800 (Rcom) = +10,300

Billionaire Club (Jan +51,000) + Feb Ser. = +13,500 + 3800 (Rcom) + 3100 (NTPC Future) = +20,400

Today’s MG Mantra –

Excitement can be harmful, its time to be cautious.

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.