Morning Bells (07 Oct 13)

Good Morning Friends.

Race can’t be won by accelerating on “Top Gear” but it can be won only by changing the gear on right time.

As discussed in Friday’s MB, about 5910 and we have seen in past 2 sessions that Nifty is facing problem in moving ahead. This week also remain highly volatile and can find lake of investment interest as on 11 Oct. we have important data announcement as well as industry heavyweight Infy will announce its Q2 figures. For IT cos Q2 seems good as Rupee remained mostly on downside in this period.

So till Nifty doesn’t’ close above 5990-6020 sentiment will remain dicy, in past 2 session we witnessed selling pressure as Nifty tried to attempt 5950.

On global front, once US shutdown crises resolves dollar again start gaining and would be interesting to see where Rupee goes. Current situation is in favour of market like India.

Well move to market commentary - Indian equity market ended a highly volatile session almost unchanged on Friday as market participants preferred to remain cautious ahead of the August industrial production data and the September import and export data which is scheduled to be released on October 11 and October 10 respectively.

ON Friday when market opened on positive note but gains were short-lived as market sentiment was hit after activity in services industry in India shrunk at the fastest pace in more than four years in September. The HSBC Services Purchasing Managers' Index, compiled by Markit, slipped from 47.6 in August to 44.6 in September, its weakest since April 2009.

The realty, auto, metals and the oil and gas stocks were among the top gainers. Even the mid-cap and the small-cap gainers ended with marginal gains. On the other hand, power, capital goods and the banking stocks were among the major laggards.

Currency Moves –

Foreign exchange reserves fell to $276.264 bn as of Sept. 27, as compared with $277.382 bn in the earlier week, the Reserve Bank of India said on Friday.

MARKET OUTLOOK –

On charts Nifty contradicted its bearish head & shoulders pattern and closed above its 200-DMA for the week. This is good sign in terms of current bounce but still Nifty to do a lot, first it need to cement its 5800 mark to move further and secondly to generate buying interest it need to close above the range of 5990-6020. Till then sentiment remain dicy.

Mainly market will behave next week on Q2 earnings and economic data.

MG’s Nifty trading range –

R – 5960/74 – 6020 - 6094 – 6140/45 – 6230 (5990-6020 range can be act as crucial resistance and trend changer)

S – 5840 – 5762 - 5670 – 5610 – 5552 - 5516

Nifty swing band is 5600-6100 and 4900-5600

DMA – 100DMA – 5806, 200DMA - 5840

Technical Trend changer supports – 5715 – 5580 – 5535 – 5250 - 5120

ECONOMIC EVENTS / RESULT CALENDAR –

11 Oct – IIP & PMI data, Result – Infy

12 Oct – Dussera Holiday

14 Oct – WPI, Result Baja Corp, Indusind Bank,

15 Oct – HDFC Bank, TCS

16 Oct – Bajaj Auto

17 Oct – US senate voting decision, Result HCL Tech.

21 Oct – Result – KTK Bank

STOCK OUTLOOK -

(Stock that can see some good moves either side)

FMCG –

Second half of this financial year, one is going to see fair bit of buoyancy in rural economy because of monsoons, better agricultural prices and election related spending, that is an important pack to be in.

So FMCG pack which has significant revenues coming in from rural India.

Media Sector & Telecom –

Keep eye on these sectors where reforms are happening in a relatively silent manner. If one looks at the media sector where because of digitization now spreading from four cities to another 38 cities, one is going to see significant pickup in subscription revenues. In addition to that- FDI related news on telecom sector makes it a good candidate to outperform. On the whole, a handful of these sectors could continue to outperform the broader markets.

IT Sector –

Big IT firms such as TCS, Infosys and Wipro are expected to announce strong earnings for the July- September quarter, helped by a steep decline of the rupee against the US dollar and improved demand for outsourcing services.

TM –

Jaguar Land Rover UK is celebrating record September sales with retail figures up 13 per cent year-to-date over the same period last year.

RPower -

Reliance Power’s portfolio of ultra mega power projects is in a trouble. Report said that the company has been facing issues, including law and order problems, for starting work on the project.

Earlier this week, the company seeks tariff increase for the 4,000-Mw power plant at Tilaiya in Jharkhand. The group had already won two UMPPs prior to bidding for Tilaiya.

MBC PL –

Oct PL = -1000

Bajaj Auto 2000PE @30 SL 20 TG 40+

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