Morning Bells (18 Oct 13)

Good Morning Friends.

God’s guidance is like a small lamp in a dark forest, it doesn’t show everything at once… but it gives enough light for next step to be safe.

As feared about slag minutes we saw it after 2PM when market turned positive to 49 points down. Market ended in the negative terrain for the second consecutive trading session on Thursday. First it was fear about any unexpected outcome and secondly main reason for negative sentiment was as the World Bank on Wednesday scaled down India's GDP growth estimate to 4.7% from its earlier projection of 5.7% for 2013-14. The World Bank also pegged the current account deficit (CAD) at 4.1% of GDP in 2013-14, significantly higher than the 3.7% hoped by the ministry.

The decline was led by the selling pressure in the IT, telecom, capital goods, auto, realty and the power stocks. On the other hand, only the consumer durables, oil and gas and FMCG stocks bucked the negative trend. Surprisingly even the mid-cap and the small-cap indices ended with marginal gains.

OMCs on Petrol Price cut

Indian oil marketing companies (OMCs) like IOC , HPCL and BPCL have decided to hold back on a petrol price cut.

Sources in OMCs have confirmed that there is a cushion of almost Re 1 per litre, and that the decision of refraining from passing on the benefit was taken in light of the upcoming assembly elections in five states. Despite the fuel being de-regulated, owing to political reasons, OMCs may not be allowed to revise petrol prices around that time.

Currency-

Rupee strengthened against the US Dollar and was approximately trading at Rs 61.44 compared with previous close of Rs 61.85 per dollar on Tuesday.

Moody’s Analysis on Indian Economy –

The Indian economy has bottomed out and the recovery is on the anvil although the days of 8 percent growth are "gone", Moody's Analytics said y’day.

"The economy is nearing the bottom of the current cycle and there is recovery in sight as investment should improve from the fourth quarter, as the government has been actively trying to restart stalled investment projects, both from the public and private sectors," senior economist at Moody's Analytics Glenn Levine said in a note.

"Yet the recovery will be modest, as weak business sentiment will take time to turn around. We expect fixed investment to grow 3.5 percent in 2014 after being flat in 2013," he added.

The former coal secretary today said, “Prime Minister could have overruled my decision; everyone was equally responsible in the matter”, adding that he was not sure why the CBI had named him.

Global Front –

US Shutdown –

The just-ended fiscal crisis undermined US credibility abroad and slowed economic growth at home, President Barack Obama said Thursday.

The day before, Obama signed a compromise deal passed by the House and Senate after weeks of bickering. It extended the debt ceiling until Feb. 7 and reopened the government by approving funding only until Jan. 15, lifting what he described as the "twin threats to our economy" for now.

"There are no winners here — these last few weeks have inflicted completely unnecessary damage on our economy," he said. "We don't know yet the full scope of the damage, but every analyst out there believes it slowed our growth."
(-MoneyControl)

INTERESTING: FACT ABOUT US SHUTDOWN -

If you remember my statement about US shutdown last week as well as y’day. I had view 99% US govt. will announce resolution for crisis, why? Then what was happening since past 2 weeks, here’s a clue for that –

Look for a short term view, when US will announce resolution EU and US market will cheer and the reason for this cheer - Slower the recovery in the US economy, longer will the Fed take to wind down its monetary stimulus. And that means party in global markets could go on for a while, despite the gloomy outlook on global growth.

MARKET OUTLOOK –

I am really enjoying this Nifty moves because when you know (or guess) about ups/downs levels you can play for volatility. It was on card that Nifty to decline above 6115 and then it will find support near 6040 and Nifty closed just around the level.

On technical part Nifty has been forming higher tops and higher bottoms on the daily chart and good supports are there, so if its believed on charts then Nifty is set to touch 6200-6230 marks. While downside it will find support 6020-5980-5940-5900. So we can clearly see supports are placed within tight range unless there’s no bad news for free fall.

Be cautious at levels 6100-6115 / 6200-6235 and nothing harm in taking precautions, max to max you will lose few rupee earning but any mishap can prevent you from big loss.

MG’s Nifty trading range –

R – 6094 – 6140/45 – 6230

S – 6020 – 5980 - 5840 – 5900- 5762 - 5670 – 5610 – 5552 - 5516

Nifty swing band is 5600-6100 (+125) and 4900-5600

ECONOMIC EVENTS / RESULT CALENDAR –

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

18 Oct – Result – L&T

19 Oct – Result – Fedral Bank, Ultratech Cement

21 Oct – Result – KTK Bank, Asian Paints, Tata Coffee, ZEEL

22 Oct – Result – Cairn India, IBR, Wipro, Yes Bank

STOCK OUTLOOK -

(Stock that can see some good moves either side)

HCL

HCL Technologies announced that it posted revenues of Rs79.61bn in the first quarter ending September 30, up 31% than a year earlier. The company made a net profit of Rs14,16bn , up 64% on a year-ago basis. The stock plunged by 7% to close at Rs1078.

Titan (Result 31 Oct) –

Titan is expected to move up from here. Here’s report for that –

The government has reduced the import tariff value of gold and silver to $418 per 10 gram and $699 per kg, respectively, according to reports.

Report said that the  tariff value, stood at $436 per 10 grams for gold and $702 per kg for silver during the last fortnight.

Trading tips –

As weekly chart one can place SL 237.4 for TG 248.5 / 254 / 260

ITC –

Among FMCG pack ITC showing good strength, infact I have initiated call from 336, still steam left and can be traded with SL 339 for TG 354 / 363

MBC PL –

Oct PL = -1000 + 250 = -750 – 1250 = -2K

Open Call –

Ashokley 17.5CE @0.7 SL Hold/0.45 TG- 18.5 in Cash

Cairn 330CE @5.2 SL 4 TG 9+

Regarding MBC calls –

I know some of you have made some loss on past 2-3 calls, here I would like to say that mostly I do swing trade so even if 3-4 calls hit SL need not to worry because 1 or 2 jackpot calls will recover all your losses and again you will be in handsome profit. But you just need to follow MBC calls because we don’t know in which bag jackpot is. Secondly you also need patience else we may burn fingers.

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