Morning Bells (27 Feb 13)

Good Morning Friends.

Strength grows when we dare, Unity grows when we pair, Love grows when we share & Relations grow when we care. Live in peace, not in pieces. Good Morning.

Whooops… Nifty has broken its strong support of 5780 y’day, we had thought few days back and I had informed that there’re two event before that you need to offload your longs, first one was RBI policy announcement and second one was Budget. Those speculation comes true today, Nifty screwed y’day and since it has broken strong support, now its like dam is cracked and open gateway. Deep correction will lead sharp upmove but don’t get confuse with it, it would possibly to offload longs at higher level and to take fresh shorts at higher level.

Indian equities saw heavy selling pressure on Tuesday with the key benchmark indices closing at 3-month low, impacted by European concerns.

It was a terrible trading session on Tuesday as the Indian equity market went off-track. The NSE Nifty index fell over 100 points during intra-day for the first time since May 2012. It was a scene of carnage all over the bourses as heavy offloading was witnessed today. Global sell-off is being blamed for the same.  

Sentiment was hit after election results in Italy pointed to an unclear winning coalition, raising worries that a new set of elections could get under way in coming months and bring renewed political instability to the euro zone.

To add to the pain, the Railway Budget 2013-14 presented by the Railway Minister, Pawan Kumar Bansal was unable to deliver any positive surprises simply dragging the benchmark indices into a free fall with no signs of comeback throughout the day.

The Nifty closed below the 5800 mark for the first time in two months as heavyweights like Bajaj Auto, HDFC, Maruti, Tata Motors, Tata Steel and Coal India fell effortlessly. If this was not enough, the Mid-Cap and the Small-Cap stocks extended their bloodbath for the second straight day as both the indices fell ~2% each. 

Railway stocks ended with heavy losses on Tuesday. Stone India plunged by 16%, Texmaco fell by 11%, Kalindee Rail Nirman nosedived by 11% and Titagarh Wagons fell by 8%.

The advance decline ratio at BSE was in favour of the bears. 2071 stocks declined against 775 advancing stocks, while 115 stocks remained unchanged.

Gainers – TCS, Infosys, Bharti Airtel, NTPC, Grasim, JP associates and Hindustan Unilever were among gainers in Sensex and Nifty.

Losers - RIL, Wipro, Sun Pharma, SBI, ICICI Bank, Tata Steel, Hero MotoCorp, ONGC, Dr Reddys Lab, Bajaj Auto, Tata Motors, Hindalco Inds and M&M were the major losers in Sensex and Nifty.

BUDGET –

It would be highly volatile day.

On Domestic Front –

Railway budget was absorbed by investors.

On Global front –

Markets are worried about the Italian political environment , the kind of coalition that will emerge and if the upcoming coalition will be stable or not. If the coalition is messy like anti Euro, then there is a possibility that we may see Italy exiting the Euro zone. This also indicates a messy version of risk appetite around the world. 

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

As warned, Nifty seen high volatility. Now there could be a possible sharp upmove and high volatility say around 100-150 points on budget day. So now these 2 days are for dare devil, they could be hero or could be zero. So small risk traders are suggested to avoid these 2 days.

The INDIA VIX on NSE was up 3.77% and ended at 17.36 against previous close of 16.73.

FNO PCR is 0.77 against previous close 0.84.

Indian Rupee – Decline 0.22 paisa and was trading at 54.09 against its previous close of 53.87.

S&P 500 (US) was trading at 14.88 up 0.34 then its previous close at the time of writing M Bells.

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

For short term now Nifty is in range seems 5700 –5950.

Resistance – 5907 – 5873 – 5817 and Support – 5727 – 5692 - 5636

Opening – Seems flat and range bound session is expected after such a free fall correction. Further mood will depend on EU sentiment. Around closing time say after 2.30 I prefer to stay away from market as high volatility could be there.

========================  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.)

Ranbaxy –

Shares of Ranbaxy fell by 4.5% after the company posted a net loss of Rs. (6160.96) million for the quarter ended December 31, 2012 as compared to net loss of Rs. (27103.21) million for the quarter ended December 31, 2011. Total Income has decreased from Rs. 39303.55 million for the quarter ended December 31, 2011 to Rs. 15086.32 million for the quarter ended December 31, 2012.

Pantaloon -

Pantaloon Retail ended lower by 3.5% after the company reported a loss of Rs0.20bn in the quarter ended 31 December compared to a profit of Rs 0.05bn in the year earlier. Net sales rose 17.64% to Rs 12.52bn.

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

Hexaware – Place order for March 75PE @1 to 1.2 (max 4 lots) first buy 2 lots and then buy another 2 lots at 20 paisa below. SL 0.5 TG 2.5+ (Remember its Positional)

=============== 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. = +10,300

Billionaire Club (Jan +51,000) + Feb Ser. = +20,400 – 3200 (JI Loss) = +17200

(JI – Loss 3200)

Today’s MG Mantra –

Stay away. Watch market and see how premiums are reducing at rocket speed regardless of wither its PE or CE.

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.