Morning Bells (09 Oct 12)

Good Morning Friends.

If someone pointed your mistake then be happy by knowing the fact that atleast someone is there who is interested in what you have done… Take things differently & make things right.

So much awaited correction has started taking place or you can say market has taken a breather, after the recent rally and before move further.

I was expecting a 50 point correction but its extended loss further on global concern. As repeatedly informing in M Bells that I am not removing test regarding EU concern, y’day EU fell down on further worries and Nifty too extended it loss 40+ points.

Now market look forward on corporate earnings and on various growth no.s – GDP, Inflation, IIP, Monsoon etc. I am considering this correction is good for Nifty to drive further as I am expecting few more reforms coming in the next few weeks.

Euro Zone debt crisis remain main concern for the global economy as Spanish Prime Minister Mariano Rajoy is desperately hoping that solution will emerge and save him from a Catch-22 situation - the pressures of the regional elections in his birthplace of Galicia on October 21 and accepting the bailout package from the ECB at the EU summit in Brussels on October 18. (Report MoneyControl.com)

The US economy too seems to be losing some steam. So I see Asian market will look to China for next stimulus, Markets are now focusing on whether China will inject more stimuli by way of more infrastructure spending or a rate cut.

So once again, October series is full of promises and various actions globally. This is also month of corporate earnings so market will remain full of thrill. On global front any move from China to support its economy will be an added positive, particularly for commodities.

MARKET OUTLOOK –

I have nothing much to say for market outlook at the moment. Much awaited correction is taking place now it would be interesting to see how deep it would be.

Now there are many strong support zones for Nifty below 5700 Mark. First support comes at 5640 from where Nifty can see a pullback, then 5585 is another good support.

As informed y’day that if Nifty don’t close above 5825 then chances are to visit 5650 are high, and Nifty has taken U turn from 5815. So be sit with cash to enter at lower levels as buying opportunities are coming good for equities.

Market trend remain buy on dips, so small correction could be used to make fresh entry at lower levels till 5585 is not broken out.

NIFTY –

As told above 2 Crore OI in first week was giving sense for something wrong. Well a little bit of a pause is good. Well Vix is reached 17.17 and Nifty PCR 0.94.

5640 has come as good support. If broken then next big support comes to 5585. Chances for a pullback is more from 5640. On upside if 5700 has been taken out the Nifty could correct to 5585. After consolidation we will head towards 5900-6000 by Diwali.

Resistance at 5700 - 5729 – 5783 and Supports at 5640 – 5585.

Opening seems muted one or under pressure.

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.

KFA – No buyer since past 3 trading sessions.

Brent crude – May pick up.

Banks – Banks always follow trends on both side, so if market decline further bank will lead decline.

IT – Investors are entering to mid-cap IT industries on expectation that it will outperform in near future while large cap seen some pressure y’day while IT heavyweight seems under pressure.

Insurance and Pharma – FII now eying on further reforms in sectors like insurance and pharma, so next big earnings can come into both sector.

OPEN CALLS –

(Be with strict SL and don’t hesitate to book profit)

TM 300CE - @3.75 for TG 4.5-5+ SL 2.25 (Made high 4.55, hope you would have booked profit)

DhanBank - @55 for TG 70 SL 45

Jindal Photo - @145 for TG 160+ SL 130

Nifty 5900CE - @31 for TG 55+ SL 8 (If not exited then now its blind bet, exit above 25 or wait if Nifty closes above 5700 mark)

Today’s MG Mantra –

5720 & 5585 these are two level which will decide current trends, so stay away from trade or make only intraday positions only.

Have a Profitable day – MG

Disclaimer – I have shared my view as per my limited knowledge; please use your own skills before making a wise decision.