Morning Bells (10 Oct. 12)

Good Morning Friends.

Living is very simple… Trying is also simple… Smiling is too simple… Winning is also simple… Then what is difficult?... Being SIMPLE is very difficult!.

So much awaited correction has taken place and seems now its time for rest for bulls and worry started for bears. I see it too good if now onward market shows strength for upward journey because this approx 150 pts correction has taken out weak bulls and they are out of race, same strong bears have booked profit during the 150 pts correction.

Consumer Durables, Pharma, IT and FMCG indices were the biggest leaders while he Oil & Gas index was the biggest loser and other sectors indices were remain flat.

On home ground BSP parliamentary board meeting is set to take place tomorrow. The news was on tune like Aziz Naza’s “Peene walon ko peene ka bahana chahiye” meaning market erases gains on the same tune fear about BSP’s stand in tomorrow’s meeting.

Interestingly I don’t see anything new, people talking about 1% chance and I am just laughing – that 1% is if tomorrow she says that I am going to vote against the Govt. (which become real worry) but how can she - she stepped down in the recent assembly elections in UP and she needs a year to set things right, so what will be her stand - probably she can say that she will be against FDI in retail like everybody including strong supporter Mulayam is saying but she can’t consider the MALAI out of the table as after quitting Mamta both M2 has good position in UPA, no matter they are supporting from outside, but who know what is happening inside.  (Refer my earlier 3 posts on Great India Political Drama, when Mamta has just threatened to quit UPA2, it was predicted well before while most of fellow members on forum were talking about Govt.’s death)

Another sign of reform has given by PM Mr. Singh in his inaugural address at the International Seminar on Energy Access in New Delhi y’dday, Mr. Singh said Govt has to provide 24x7 Electricity to all in 5 years.

Now only a bit worry is EU worry as now finally Dragi has cleared that countries need to sufficient before considering for funding.

I see this as a good opportunity because when Asia was weak people bet on EU, and when EU and China looks weak where investors will go? Definitely they have only option which is India with a bit risk but will be far better than EU & China, so to my person view momentum remains upward and we are going to see 6000 before 2013. So probably to my guess focus is shifting slowly-slowly to India.

Another drama is continuing with KG-D6 gas field. Reliance Industries  with partner BP Plc have warned of their KG-D6 gas field shutting down in 2015-16 if the government does not approve investments needed to keep the nation's largest gas fields alive. "That is a fear," oil secretary G C Chaturvedi told reporters when asked if there was a possibility of the main producing fields in KG-D6 fields shutting down in future. Natural gas production from Dhirubhai-1 and 3 gas fields and MA oil field in the Bay of Bengal KG-DWN-98/3 or KG-D6 block has slid to about 26 million standard cubic meters per day from 61.5 mmscmd achieved in March 2010. "It (production) will keep coming down," Chaturvedi said. (Source MoneyControl.com)

Another news is from Software Co. Polaris – Market regulator Sebi today barred Polaris Software Labs's CMD Arun Jain from securities market for a period of two years for alleged insider trading in the company's shares. Restraining him from accessing the securities market and further prohibit him from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner for a period of two years from the date of this order," Sebi said. Sebi cleared that Jain dealt in 15,080 shares of the company on behalf of Polaris Holding Private Ltd (PHPL) on the basis of 'unpublished price sensitive information' held by him and had made unfair gains to the tune of Rs 27.26 lakh. (Reports MoneyControl.com)

So Market is looking 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.

MARKET OUTLOOK –

As I feel focus is shifting from EU & China to now India, definitely it will take time but this sense gives us too many reasons as well as great hopes to sustain the momentum. Well next will start kick off with heavyweight results till expiry of the series. First heavyweight Infy is set to announce its no.s on 12^th and after long time profit seen up which can be considered as good sign for market.

Bulls have successfully defended the 5700 mark y’day and it can be considered as good victory for bulls though in later half sentiment was dampened due to various factors like BSP meet, weak global cues etc. So probably today market may remain under pressure as BSP meet will be going on.

So now market may remain range bound, need to watch two level, on upside 5825 which has strong resistance while on down side its has strong support 5640 & 5585.

Market short term trend (for this week) is selling on rise till 5754 is not taken out on closing basis.

NIFTY –

As told y’da 5640 had good support and bears were unable to break it on Monday and had also told that chances of pull back was fair. Once again it got resisted around our first resistance 5729.

5800CE & 6000CE has highest OI of 73lacs & 70 lac, while 5600PE has highest OI of 63 Lacs with a fresh addition of 3.2 lacs.

Vix has fell down to 16.80 and PCR comes to 1.04.

Resistance at 5729 - 5754 – 5780 and Supports at 5678 – 5652 – 5628 - 5585.

Opening again seems muted one and under pressure as most of global market closed in red and also S&P 500 loosed steam.

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.

Tata Steel – Y’day said it has achieved best ever quarterly saleable steel production at 1.87 million tonnes (MT) in the July-September period, in Q2 of the last fiscal, it had achieved 1.71 MT of the saleable steel output.

Power Sector - Another sign of reform has given by PM Mr. Singh in his inaugural address at the International Seminar on Energy Access in New Delhi y’dday, Mr. Singh said Govt has to provide 24x7 Electricity to all in 5 years.

Banks – Banks will regain its winning streak whenever Nifty will sustain only, or in some cases it will drive the Nity towards upmove.

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.

Infy - is expected to post a 24.9 percent rise in profit in the quarter ended September 30 to Rs 2,380 crore, according to Thomson Reuters data, so mood is a bit upbeat now.

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 (Closed above 20, loss 12Rs – will cover soon)

Today’s MG Mantra –

Market seems volatile on global economy worry and remain under pressure just for the sake of political development. So in short term one can sell on rise (till 5754 is not broken) and can sit with cash for right time to enter.

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.