Morning Bells (28 Oct 13)

Good Morning Friends.

Problem is just the distance between Expectations & Reality. Either expect less and accept the reality or expect a lot and turn it into reality.

So we have entered to festival week and I guess since Nifty hit 6230 now we should more focus on Market outlook rather than what’s going in sectors or on daily basis because now market is eagerly awaiting to break its trading range either side. On upside as discussed Nifty to close above 6230-35 to make new high or to break 6080 to visit 5950 and close below 5950 (or say decisive breach) for 2 successive day will give signal to revisit 5600 levels.

Nifty closed marginally lower on Friday, right now it continues to consolidate in a narrow trading band. The reason for this narrow reason is that traders remained cautious ahead of the Reserve Bank meet scheduled on 29 October.

The BSE Realty index was the top loser, down 2% followed by BSE capital goods index down 1.7% and BSE metal index down 1%.

On the currency front, the rupee was weak at around 61.61 against the dollar. The Indian unit had opened a tad weak at 61.50 per dollar against the previous close of 61.47.

RBI Policy meet outlook –

Experts divided in 2 camps, some believes that due to festive season RBI will give a pass while some sees that due higher inflation another 25bps hike is likely.

So overall today could be a highly volatile day as bears and bulls both would try to take advantage of this event. What if, if I tell you that RBI can deliver a balance output, mean RBI can hike repo rate as well as can give some liquidity freedom to bring more liquidity into the market.

So overall don’t try your luck without any proper information as option prices are already up. Best idea could be short straddle in select banking stocks.

MARKET OUTLOOK –

Well its assumed that market is in consolidation mode and eagerly awaiting to break its trading range. Most of experts now expect that Nifty losing its steam and can fall dramatically. Overall, it was a consolidation time for the market after a 6 percent rally witnessed in the previous three weeks but consistent inflows of foreign money kept a check on the downside.

Few also believe the market may surpass its January 2008 record of hitting 6357 on the Nifty and 21206 on Sensex in the next few days, may be by end of September quarter earnings season.

Meanwhile, FII were net buyers in October so far and bought more than Rs 13,000 crore worth of shares (including Friday's provisional figure) in current month, in addition to Rs 12,633 crore worth of buying in September.

MG’s Nifty trading range –

R – 6240 – 6290 – 6350 (To hit new high, close should be above 6230-35)

S –6120 – 6070- 6020 – 5980 (Trend Changer level 5950)

ECONOMIC EVENTS / RESULT CALENDAR –

28 Oct – Result – Dabur, JSW, Maruti, VIP

29 Oct – Result – JSW Steel, Sriram Transport, Tata Comm, Welspun Corp

30 Oct – Result – Bata India, BharatiAirtel, DLF, Havells, IDBI Bank, Jindal Steel, LIC Hous. Fin., Lupin

31 Oct – Result – Adani Enterprise, Allahbad bank, BOB, BOI, UBI, Dr. Reddy, FRL, IDFC, Jubilant Food, SesaSter, Titan,

OI Activity –

STOCK OUTLOOK -

(Stock that can see some good moves either side)

ITC –

Reported higher-than-expected 21.5 percent growth in its net profit of Rs 2,230 crore in three months period ended September 2013. Its operational performance was good too due to pricing power, but sales disappointed the street.

Net Sales increased 8.9 percent (far lower than analysts' expectations) to Rs 7,780 crore during September quarter from Rs 7,146 crore in a year ago period, dented by slow volume growth in cigarette business and fall in agri volume.

MBC PL –

Oct PL = -2000 + 5000 (Loss in Ashokley 17.5CE) = -6600

Open Call –

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