Morning Bells (25 Oct 12)

Good Morning Friends.

“Do not expect the circumstances to be always in your favour, because this world has not been created for you alone!”

So finally day has come, a quite strange and painful expiry where we seen many range bound session and more importantly last two weeks was specially designed to eat the premiums of both CE & PE.

Well as suggested in MB and also updated during market hours that on Tuesday market may go down come true and finally ended 25 pts down, it was 32 pts down but as said now its time for more n faster server & software, in post closing session Nifty corrected 7 pts. And finally closed at 5691. The main reason for sideline of market participant was Dussera holiday and F&O expiry today.

RIL has announced that the Hon'ble High Court of Gujarat at Ahmedabad has sanctioned the Scheme of Amalgamation of Reliance Jamnagar Infrastructure Limited ("RJIL" or "the Transferor Company") with Reliance Industries Limited ("RIL" or the "Company’) ("Scheme"). – (Source IIFL.com)

On Crude OIL front, crude oil price for Indian Basket declined sharply to 108.5$/bbl on Tuesday according to (PPAC) on 22.10.2012.

European stocks & US stocks both fell down deep red on Wednesday so I can say due to holiday we saved from a deep pain.

Euro zone businesses in October suffered their worst month since the bloc emerged from its last recession more than three years ago, forcing them to cut more jobs to reduce costs, surveys showed on Wednesday.

The downturn that began in smaller periphery countries is now gripping Germany and France, dragging the euro zone as a whole deeper into the quagmire.

Markit's Composite Purchasing Managers' Index (PMI), which polls around 5,000 businesses across the 17-nation bloc and is viewed as a reliable growth indicator, fell to 45.8 this month from a September reading of 46.1. (Report - MoneyControl.com)

So I don’t have much to say as its day of expiry and chart wont suggest you anything, so let’s have a look where this expiry going to take place as its surprised whole month so there could be no surprise today.

MARKET OUTLOOK –

Its like last over of the match and need to watch it carefully as this expiry will decide how next series will take place in first half. So, lets see where expiry is going to take place as upside seems capped and on down side it would be interesting to see whether BULLS manage this expiry between 5650-5700 or not.

Best idea is to stay sideline till Nifty don’t break this trading range as its giving sense for something big. Its still in No Trade Zone, one can make only Intraday position or can wait for breakout of level either side.

The INDIA VIX on NSE surges 5% to end at 13.79 and PCR is 0.95.

NIFTY OUTLOOK –

FII DERIVATIVES STATISTICS FOR 22-Oct-2012

	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY		Action
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	234252	6702.61	233442	6614.64	718471	18473.36	87.97
INDEX OPTIONS	468342	13285.35	451363	12828.76	1841629	52436.57	456.59
STOCK FUTURES	369442	10836.29	382696	11203.95	1149826	33490.46	-367.66
STOCK OPTIONS	35962	1129.61	34769	1100.41	81287	2595.09	29.20

We can clearly see that FII went long on Index future while they shorted stock future and that’s most of indices closed in RED.

On long side Nifty 5800CE has highest OI of 1.16 Cr with unwinding of 5.6 Lac, 5900CE has second highest OI of 55.84 Lacs which is real worry for bulls as both are OTM.

On short side Nifty 5600PE OI has highest OI of 75.48 with unwinding of 8 Lacs, 5500PE has second highest OI of 57.11 with unwinding of 82K, this is also strange with such a low unwinding, and both are OTM.

So if we see through data it’s seen that we are still in the range of 5600-5800. So most probably expiry seems between 5650-5700 marks or 50 pts either side. A 5% chances for sharp decline also seen.

Now Resistance comes to 5714 - 5737 – 5753 and Supports comes to 5674 – 5656 - 5635.

Opening again seems under pressure, may be market can show some strength in the beginning. PCR and VIX are also suggesting weakness.

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 can decide stock move either side.)

My top pick for next 3 months are – Cement, Infra & Banks – yes not blindly to any stock, in select good stocks only.

Realty Sector –

Is set to move big after expiry ahead of festive season. It seems good bet. DB Realty & Oberoi Realty.

Steel Sector –

Steel seems under pressure. JSPL seems under pressure.

Infra Sector –

IRB and Reliance Infra will remain under pressure.

Power Sector –

For slow but steady gain is seen. Keep eye for Mid to Long term bet.

Banks Sector –

Bank will follow trend, and further show strength in later part.

IT Sector –

Remain under pressure.

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 profit if Nifty shows strength.

DhanBank - @55 for TG 70 SL 45

Jindal Photo - @145 for TG 160+ SL 130

Omkar Chemicals – Bought @102 for TG 115 SL 83

Today’s MG Mantra –

Don’t think to be millionaire in a single day, you may burn your finger. Sit on cash is suggested. Instead of repeated instruction most of you have burned fingers in this expiry and washed out Sept. earnings.

Have a Profitable day – MG

Disclaimer –

1. I have shared my view as per my limited knowledge; please use your own skills to make a wise decision before execution of trade.

2. Those who don’t have patience and are not willing to book loss also in cases don’t enter this market.