Thursday 10 October 2013

Morning Bells (10 Oct 13)



Good Morning Friends.

All the relations are like an insurance policy, we should pay the premiums of feelings, love & care regularly to maintain the relations.

It was a great recovery on D street and Nifty managed to close above physiological level of 6000 but still its closed in critical range of 5990-6020. Above 6020 there are few strong resistance in narrow range, so even if Nifty showing strong momentum it would not be easy climb upside. Only a case if it can give a try like y’day then short covering will help to break further levels at once.

Well the main reason was the trade deficit which narrowed and this data will also help in CAD & to Rupee which was indeed a positive sign for market which was witnessing pressure since currency fall.

The complete story is - market shot up by 1.5% on Wednesday as trade deficit surprisingly narrowed to a two-and-a-half-year low in September. The deficit stood at US$6.7bn, the lowest level since March 2011, compared with US$10.9bn in August.

Another highlight was - Merchandise exports rose by 11.15% year-on-year in September to US$27.68bn posting a third straight month of annual growth, while, Imports fell 18.1% year-on-year to US$34.44bn.

And feather of the news was - In addition, the gross direct tax collections rose only 10.66% to Rs. 3.01 lakh crore during the April-September period of 2013-14 fiscal. The collections totalled Rs. 2.72 lakh crore in the same period of 2012-13 fiscal.

Barring the BSE consumer durables index, all the other major BSE sectoral indices ended with gains. The BSE realty index was the top gainer (up 4.2%) followed by BSE Healthcare index up 2%, BSE Bankex index up 2%, BSE capital goods up 1.8% and BSE power index up 1.5%.

Why infra sector is zooming now days?
Cabinet Committee on Investment (CCI) will shortly enjoy the option to overrule meaningless objections of infrastructure related ministries that have been hindering execution of mega projects until now so that it is able to approve of stalled projects, disclosed,  Dr. Montek Singh Ahluwalia, Deputy Chairman, Planning Commission.

The UPA Government is going to empower the CCI on this front after it has been recommended by Cell in CCI on fast track projects, exceeding investments of Rs. 1000 crores which is headed by Anil Swarup, Additional Secretary, added Dr. Ahluwalia, while inaugurating “Infrastructure Conclave 2013” organized by PHD Chamber of Commerce and Industry, here today on the subject of Fast Tracking Stalled Projects”.

Dr. Ahluwalia pointed out that CCI, which was set up to facilitate faster clearances for mega projects, hanging on fire due to various reasons, needs to be empowered with an option to overrule meaningless objections of infrastructure related ministries on one pretext or other which arise out of petty issues so that stalled fast track projects are cleared in one go.
(Source: IIFL)

MARKET OUTLOOK –
As discussed in opening para Nifty is closed in critical range, first it need to breach 6020 decisively then it need to take out 6135 and lastly 6200, we are going to make new high. But it all depends how their next week should pan out.

And next week is full of thrill, the world has never seen US defaulting in a direct manner, will that eventuality occur not occur, the market today is definitely not pricing that in. They are hoping that eventually things will settle down. So clearly, if the momentum is in favour of India but there are events which we need to watch out for.
So, one must also not forget the looming US debt crisis and its possible impact on world economies, so that too could be keeping the investors away and the confidence to go long in the market at higher level is missing.

So be cautious here at levels 6050 / 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. That’s the MG’s tag line till levels not crossed.
MG’s Nifty trading range –
R – 6020 - 6194 – 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, RIL
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)

Sesa-Ster
Sesa Sterlite said that its mined metal production increased by 16% in Q2 and 22% in H1 compared with the corresponding prior periods respectively, and we expect to deliver approximately 950kt of mined metal production during the year.

Tata Steel –
Tata Steel today said that its Hot Metal production stood at 2.46 million tonnes in Q2 (up by 19% y-o-y) and 4.93 million tonnes in H1 (up by 20% y-o-y).

Tata Communication –
Tata Communications today announced the extension of its low latency network in Asia with direct connections to the National Stock Exchange of India (NSE), the Singapore Exchange Ltd (SGX) and the Hong Kong Stock Exchange (HKEx). The low latency network further extends the company's global financial trading connectivity network. As a result, it will support mission critical, real-time trading applications by seamlessly connecting the exchanges with major financial capitals in Asia, the United Kingdom and the United States.

Tata Communications' low latency network is faster than traditional point-to-point systems. The pure Ethernet platform with native multipoint support enables financial trading businesses and other companies that require latency sensitive connectivity to respond faster in the dynamic Asian market. The global network integrates exchanges with market leading low latency connectivity to Europe and beyond, enabling firms to reach major financial centres, such as in Chicago and London in milliseconds, through a single network and single supplier model.

MBC PL –
Oct PL = -1000 + 250 = -750 – 1250 = -2K
Exited Infy call spread with 10 point loss

Open Call –

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Monday 7 October 2013

Morning Bells (08 Oct 13)



Good Morning Friends.

When we trust a person we think that they are with us forever to share our pain. But time reminds us that tasty fruits are only seasonal.

Once again Indian equity market ended flat on Monday with the NSE Nifty managing to sustain above the 5900 mark. As discussed our strong support 5840, markets took a sharp turn and bounced back taking support at its 200 DMA. So here 5840 and 5960 are key levels and market to behave like that till it doesn’t break either side.

Buying momentum in the pharma, metal and telecom stocks lifted the market to close near day's high while among the major laggards were, the banking, capital goods and realty stocks. The BSE IT index was in momentum and was the top gainer among the BSE sectoral indices.

Some good news from RBI counter - Starting with the Mid-Quarter Review of September 2013, the Reserve Bank of India (RBI) began a calibrated withdrawal of exceptional measures undertaken since July 2013. This was done with a view to normalising liquidity conditions. Accordingly, the marginal standing facility (MSF) rate was reduced by 75 basis points from 10.25 per cent to 9.5 per cent.

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)

New Banking License – again in news
Finance Minister P Chidambaram said that the Reserve Bank of India (RBI) would shortly issue seven licences.

Speaking at a conference at State Bank of Mysore, in Bangalore on Saturday, Chidambaram said the new banks should not try to become clones of existing banks.
According to Chidambaram, the new banks which would receive banking licence shouldn’t look like each other with different names. Each bank should cater to the needs of a special group of customers.

“We will have competition, efficiency and progress only if people attempt different things and do things differently,” he added.

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.

Apollo Tyre –
Shares of Apollo Tyres surged over 4% after the company and U.S.-based Cooper Tire disagreed over price Apollo Tyres should pay in its takeover. The disagreement over price came to light after Cooper on Friday filed a complaint in a U.S. court to force Apollo to close the acquisition "in a timely manner"

Coal India -
Coal India declined by 3.2% after reports stated that the government will offload its 5% stake in the company by way of follow-on public offer (FPO) in December.

Bombay Dyeing –
Shares of Bombay Dyeing shot up over 12% on media reports that three private equity funds are in talks to buy up to a 24% stake in the company.

L&T –
L&T has secured two EPC projects of about Rs1100 Cr value in hydrocarbon segment in UAE and Qatar.

Takreer (a subsidiary of state-owned Abu Dhabi National Oil Company- ADNOC) awarded an EPC project of a new Aviation Fuel Terminal at Abu Dhabi International Airport for developing storage and delivery of Jet A-1 fuel.  The project is scheduled to be completed in 30 months.

Coal India –
Coal India declined by 3.2% after reports stated that the government will offload its 5% stake in the company by way of follow-on public offer (FPO) in December.

MBC PL –
Oct PL = -1000 + 250 = -750
Bajaj Auto 2000PE @30 Updated SL 32 = +250

Open Call –
Infy call spread – 3400CE @72 & 2700PE @80 combined premium = 152 SL 100 TG – Will announce.

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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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