Wednesday, 17 April 2013

Morning Bells (18 Apr 13)

Good Morning Friends.

Thought of the day – If your mind tells you one thing and your heart tells you another, before you do anything first you decide whether you have a better mind or a better heart.

After rallying for three consecutive trading sessions, the Nifty took a breather on Wednesday. Despite a gap up opening, the markets were unable to hold on to its gains and closed off the day’s high, tracking weakness in the European markets.

Now today is the day of TCS, i.e. to watch how market reacts on TCS better than expected Q4 Nos after decline in RIL instead of better than expected Q4 Nos. –

FY13 net profit came in at Rs 13,941 crore, up 30.9% YoY.

Revenues of the country's largest software company came in up 2.24% QoQ and 23.9% YoY at Rs 16,430 crore. The revenue figure is as per International Financial Reporting Standards.

It reported a 28.8% YoY rise in FY13 revenues at Rs 62,989 crore.

Q4 earnings before interest and tax or EBIT margins came in at 26.5%.

Volume growth for the period stood 4.4% QoQ. 

Other income surged 100% at Rs 442 crore as compared to Rs 221 crore in Q3.

Gainers –
Sun Pharma, Sterlite Industries, Bharti Airtel, Maruti Suzuki, ICICI Bank, BHEL, Hindalco Industries, Hero MotoCorp, NTPC, Tata Motors and Coal India were among the major gainers in Sensex and Nifty. 

Losers –
RIL, Wipro, Infosys, TCS, ONGC, Tata Power, Tata Steel, HDFC Bank, Jindal Steel, L&T and Gail India were among the major losers in Sensex and Nifty.

Sectoral –
Among sectors, PSU, capital goods, consumer durables, auto, metal, power, banks, FMCG, realty and healthcare ended with gains. The losers pack was led by IT and oil and gas.

Domestic Front –
RBI Policy –
Now everyone is talking about rate cut during RBI policy on May 3rd. But as per data at 5.96%, the wholesale price index-based inflation for March has grown at the slowest rate in more than three years. It is significantly lower than the 7.69% recorded in March last year and 6.84% in February 2013.

Based on this data, Care Ratings feels the Reserve Bank will be constrained from pursuing a rate cut in its forthcoming Monetary Policy meet on May 3.

Global Front –
GOLD Bubble –
Precious metals have witnessed an unprecedented selling rout in terms of magnitude and duration. The yellow metal has lost whopping US$240/ounce over last three trading sessions and registered a low of US$1,322/ounce, the lowest level since September 2011. The havoc in the commodity markets has compelled CME Group and Shanghai Gold Exchange to increase margins on gold futures. One cannot ignore the fact that gold prices were due for a correction, considering the unabated “Bull Run” over the last 10-11 years.

Cyprus story: It is widely reported that Cyprus may sell some 400mn euros worth of gold to partially finance its bailout. At the prevalent price levels, 400mn euros are equivalent to 10 to 12 tons of gold. Rumors mills were churning reports that the gold liquidation plan by the Cypriot government is weighing on the prices. Although, we take this theory with a pinch of salt, as Cyprus gold holdings are at minuscule 13.9 tons, which accounts for just 0.045% of global central bank gold holdings. This is immaterial, if compared with global central bank’s net purchase of 535 tons of gold during 2012. Gold has trumped over other currencies as the reserve asset of choice for central banks looking to diversify away from US dollar and Euro. Global central banks have remained net buyers of gold since 2010. There were concerns that a gold sell-off by Cyprus could set precedence for other debt-ridden nations. Troubled Eurozone countries like Greece, Ireland, Portugal and Spain could be compelled to sell their gold holdings. However, these nations have meager gold reserves, with the combined gold holdings among the mentioned nations amounting to 780 tons, or just 2.5% of total world gold holdings. We infer that even in the worst case scenario, if Cyprus resort to running down its gold reserves, other central banks might not follow suit. These countries are subject to the Central Bank Gold Agreement (CBGA) which limits central bank gold sales. This can be explained by the fact sales under the CBGA throughout 2012 just amounted to 5.5 tons, where Germany only sold some quantum for the purpose of  minting  commemorative  gold  coins.  Other CBGA  members remained  completely inactive in regard with exercising their right to sell their gold reserves. Central banks outside the purview of CBGA also refrained from selling gold reserves, except minor sales by the bank of Mexico for the motive of coin-minting.

=====================  MARKET OUTLOOK  =====================
Well now y’day was the day of RIL, RIL also helped to pull Nifty up. Now today is the day of TCS.

As per most of experts, though RIL result is inline but it would be a non event for market and wont cheer the market.

The INDIA VIX on NSE was up 0.68% and ended at 16.36 against previous close of 16.25.

FNO PCR is 1.13 against previous close 1.04.
(PCR suggesting we are heading towards weakness)

Indian Rupee – Rupee declined by 6 paisa and was trading at 54.21 against its previous close of 54.15.

S&P 500 (US) was trading at 1551.82 up 22.75 then its previous close at the time of writing M Bells.


16 Apr – RIL
17 Apr – HCL, TCS, Yes Bank
18 Apr – Essar Ports, IndusInd Bank,
19 Apr – Oberoi Realty, Wipro
22 Apr – Cairn India

=======================  NIFTY OUTLOOK  ========================
The key 200-day Moving Average has once again proved a key support. Nifty bounced back after breaching this vital level on April 4. Since then, the Nifty, which was looking technically weak some times back now comes to 60:40 chances band. Now it would be interesting to see whether Nifty sustain above this level or not.

I also emphasize here, right now Nifty is just in HNS (Head and Shoulder) pattern, though one need to study it very carefully with various DMA. Lets have look on DMA calculations –

The 200-day Moving Average is a popular long-term technical indicator used by intra-day or short-term watchers to analyse price trends. In lay terms, it is the average closing price of a share over the last 200 days.

The 200-day moving average is perceived to be the dividing line between a stock that is technically healthy and one that is not. Moreover, the percentage of stocks trading above their 200-day moving average helps determine the overall health of the market.

Most traders use moving averages to determine the profitable entry and exit points in specific securities as it indicates the ‘trend’ or the overall direction. It also provides useful support and resistance points and can be put into play by even novice traders.

Now its seen technically that Nifty may see some hurdle between 5720-5750 or more precisely be cautious above 5700.

So I personally feel this 5720-5755-5805 range is danger, as per chart patter may be Nifty moves up a bit down then attempt for 5800 but till 5915 is no taken out, I wont bet for mid to long term, it may slip any moment for much lower levels.

Intraday Resistance – 5787 – 5759 – 5724 and Support – 5661 – 5633 – 5597 (Pivot 5696)

Opening – Seems uncertain, as per sharp decline in global market, we should open weak but TCS can cheer and can restrict fall. Lets see.

========================  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.)

Stocks which hit a 52-week low during the week were Banco Products, SAIL, Ferro Alloys, Godfrey Phil, Hind Zinc and Sesa Goa.

Shares of HCL Technologies ended 1.8% lower at Rs749 per share. Its Q3 FY13 PAT rose 7.8% QoQ at Rs 10.40 bn. Q3 sales came in at Rs 64.25 bn, up 2.4% QoQ.

Reliance Industries slipped 3% in trade today to Rs778 per share despite posting higher than expected Q4 results. The company’s fourth quarter net profit rose 32% to a higher-than-expected Rs 55.89 bn.

Bharat Petroleum Corporation Ltd has reportedly said that it is planning to invest Rs 325bn to expand its refining capacity to 47.5 mt in the next three-four years.

The company will invest Rs 100bn on its Numaligarh refinery to expand its capacity from three mt to nine mt, says report.

BPCL owns 61.65% in the Numaligarh Refinery.

In Mumbai refinery, the capacity would go up from 12 mt to 14 mt through change of its crude oil distillation unit.

TCS is planning to hire 45,000 employees in FY14.
Human Resources: 

“We have added, trained and integrated over 69,000 professionals during 2012-13. With business demand continuing to be robust, we have made almost 25,000 fresh offers on engineering campuses for trainees who will join us from the second quarter of this fiscal year.” said Ajoy Mukherjee, Executive Vice President, Head, Global Human Resources, Tata Consultancy Services. “Our efforts to increase retention by engaging with our employees and offering them a progressive career path are paying dividends with IT attrition rates falling further to below ten per cent.”  

HCL Technologies Ltd Q3 PAT stood at Rs10.40bn, up 7.8% QoQ. Its Q3 sales at Rs64.25bn, up 2.4% QoQ. The company has added 37 new clients in Q3.

The company has announced that the Board of Directors of the Company at its meeting held on April 17, 2013, inter alia, has declared an interim dividend of Rs. 2/- per equity share of face value of Rs. 2/- each of the Company.

The record date of April 23, 2013 for payment of said interim dividend has been confirmed by the Board of Directors. The payment date of the said interim dividend shall be April 30, 2013.

L&T -
According to reports, Larsen & Toubro (L&T) is close to winning $800-mn contract from Saudi Aramco for building its upstream processing facilities for the Midyan field,

A formal announcement is expected in the next few days, report said.

Reports stated that L&T has been increasingly focusing on its international businesses to improve its topline.

Yes Bank –
Total Income has increased from Rs. 20514.50 mn for the quarter ended March 31, 2012 to Rs. 26670.30 mn for the quarter ended March 31, 2013.

The Board of Directors of YES BANK Ltd. took on record the Q4FY13 and (audited) FY13 results at its meeting held in Mumbai today.

The bank posted a net profit of Rs. 3621.50 mn for the quarter ended March 31, 2013 as compared to Rs. 2718.00 mn for the quarter ended March 31, 2012.

Total Income has increased from Rs. 20514.50 mn for the quarter ended March 31, 2012 to Rs. 26670.30 mn for the quarter ended March 31, 2013.

Bajaj Auto -
Country's third largest two-wheeler maker Bajaj Auto today said it has raised the prices of its entire range of motorcycles by up to Rs 500 due to rise in logistics and other expenditures.

"We have increased prices between Rs 300 to Rs 500,effective April 12 to take care of increased logistics and other costs," Bajaj Auto President (Motorcycle Business) KSrinivas told PTI.

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

=============== 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)
(Start exiting from stock if Nifty goes below 5500 mark)

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

MG Blog Since Jan 13 (Total 50,300) + Apr 13 = +5750

Billionaire Club Since Jan 13 (Total 1,09,350) + Apr = +7900

Today’s MG Mantra
Don’t follow first our trend, actual trend will be only after that.

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Have a Profitable day – MG


  1. If any one holding longs, try to exit at best price, as suggested in MB, I am not fully convinced with with range 5720-5800 and may be we can head towards lower levels from here.

    1. View is not exactly for today - its till next expiry with some zig-zag rout so on safe side start reducing your portfolio.

  2. Dear Sir,
    TATA mototrs at 280 level. Is it the time to enter?.

    1. I think I have already commented on TM last week and before that week too - when TM was falling and out TG was 256-261 range from 285 levels, then for longs SL was 251 and for short it was 271.

      So above 271 - 291 is possible and and TM can head towards 300 level.