Morning Bells (31 Oct 12)

Good Morning Friends.

“Zindagi ki yehi reet he… har ke baad hi jeet he”

So finally RBI did what I had guessed because it was very much cleared that RBI don’t have choice to keep mum also this was just a formality or can say sign of support of current reforms done by Govt.

Very few of you would have noticed my recent post else you could be more cautious with recent moves (which was the main cause for today’s fall), post was on – RBI implementing LR from 1st Jan, 2013. RBI may restructure the statutory liquidity ratio (SLR) to compute liquidity under the Basel-III regulatory norms. But today everybody would have realized the effect of this news, Nifty fell down 67 points instead of 0.25 cut in CRR else it was a cheer time or could have flat session.

Surprisingly what Govt. is trying to show common man is not correct – RBI increased Inflation for the current financial year to 7.5% from 7% earlier. RBI sees inflation climbing in the current quarter as the government cuts back on subsidies to reduce fiscal deficit. RBI also sets GDP forecast for FY13 to 5.8 percent from 6.5 percent earlier.

Well amid of all do & don’ts of Govt. & RBI Nifty fell down 67 points and closed      5597. It was just a bit good luck it didn’t break down & closed 5585. Nifty closed below 5600 mark after September 20, 2012. The revision in provisioning norms by the RBI dampened the sentiment. RBI raised banks' provisioning requirement to 2.75 percent as against the existing 2 percent on restructured standard loan accounts that would eat away profits of the banks. Other than Bankex, Realty and Capital Goods indices were down over 2 percent while Metal, Auto and Power fell 1-1.5 percent.

As informed immediately after RBI announcement that Bank, Auto & Realty are the most affective sectors, while tyre manufacturers rallied 1.5-2.5 percent after the Competition Commission of India said did not find cartelisation among tyre-makers.

IRB Infrastructure gained 4 percent following better-than-expected numbers in September quarter. RBI also stated that it don’t see any slowdown in tolling revenue.

Dr. Reddy also beaten the street expectation, company reported better-than-expected 32 percent YoY rise in Q2 net profit at Rs 407 crore, sending its shares up more than 2 percent y’day.

In other news Credit Suisse downgraded ONGC to 'underperform' from 'neutral', citing earning concerns. It stated that oil explorer's earnings in the next fiscal year could be hit by a combination of lower domestic production, higher taxes, losses at subsidiary Mangalore Refiney and Petrochemicals Ltd , and a high base in the previous fiscal year.

US stock exchanges were also closed on Tuesday due to Sandy storm. So worlds’ economy is moving at their own wish in the absence of World’s leader of economy. Hurricane Sandy is likely to leave a mark, The most obvious area would be on property and casualty insurers, which will have to wrestle with maybe $5 billion or more of claims. Futures traders made bets Monday that the stock market would open lower - about 48 points off on the Dow industrials - once trading resumes. (MoneyControl.com)

MARKET OUTLOOK –

As already warned, informed big participant may remain sideline ahead of US Prez election and can go for profit booking by this weekend latest by Monday Nov. 5, 2012. So now I see market will remain volatile and under pressure till US election results.

Obama worked hard in weak economy situation and taken steps whatever can be best to save its flag for world’s No. 1 economy and that’s corporate won’t be happy if Obama leads and Diwali could be a neutral event.

The INDIA VIX on NSE up 0.33% to end at 15.17 and F&O PCR is 0.85.

FII DERIVATIVES STATISTICS FOR 22-Oct-2012
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY		Difference
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	58421	1641.50	81450	2177.02	379422	9232.45	-535.52
INDEX OPTIONS	598516	16871.07	551495	15664.01	1599702	44775.88	1207.06
STOCK FUTURES	51755	1429.62	56262	1537.02	1049068	27532.31	-107.40
STOCK OPTIONS	68932	1906.27	69971	1942.93	51826	1425.47	-36.65

As warned y’day, FII data clearly shown that what could be happened on Tuesday, picture is same today, its third day when FII went short on all, they shorted Index Future, Stock Future and even Stock Options. Y’day Nifty has given a try to breakdown the range and broken 5600 Mark which is a sign of weakness in market. Now need to keep eye on 5585, if broken then we are going to test 5550 or even below as Nifty will try to fill the gaps, while buying momentum will come only above 5745 levels.

NIFTY OUTLOOK – 

Nifty Derivatives Statics (Key Facts)
Strike	OI	Change in OI	IV	Strike	OI	Change in OI	IV
Longs created				Shorts created
5700-CE	34,55,100	3,49,900	12.26	5600-PE	45,47,450	4,84,750	14.67
5800-CE	40,24,650	5,85,450	12.32	5500-PE	34,98,850	2,33,600	15.23
5900-CE	42,94,400	5,07,550	12.35	5400-PE	41,03,400	7,80,250	15.9
6000-CE	43,78,650	6,84,750	12.44	5300-PE	49,05,300	5,53,250	16.84

Once again huge addition to 5400 PE which somehow giving sense for shifting base from 5600 to 5400.

Had already informed Nifty was in overbought zone since very long time, now its going to settle down and this would be good if we want to see new high in this year.

Resistance comes to 5661 - 5725 – 5761 and Supports comes to 5561 – 5525 - 5461. Here I would like to mention Nifty has strong support at 5580 & 5530. Sp if 5530 broken Nifty will go for gap filling and we will see Nifty below 5500 Mark.

Opening seems under pressure with slightly negative bias.

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 doesn’t shows strength.

DhanBank - @55 for TG 70 SL 45

Jindal Photo - @145 for TG 160+ SL 130

ICICI 1150CE - @10 for TG 20+ SL (NA), will average it next week.

Note – Once can visit blog for New Stock Advice & Open Calls at MudraGuru.blogspot.in

Today’s MG Mantra –

Now trend will sell on rise if Nifty breakdown 5585 and don’t sceptical out of the blue.

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