Morning Bells (2 Nov 12)

Good Morning Friends.

Even a small dot can stop a big sentence but few dots can give continuity, amazing but true. Every ending can be a new beginning.

So finally it was yet another day of consolidation for the market as Nifty kept drifting in the range of 5600-5650. Y’day’s gain was mainly due to Consumer Durables which was up by 5.26%, followed by Auto sector up 2.26%., auto stocks surged as sales accelerated ahead of festive seasons. Realty and Power were also up by more than a percent while FMCG witnessed profit-booking and was down by about a percent.

A minor improvement in the manufacturing growth data also boosted the positive sentiment. The HSBC India Manufacturing Purchasing Managers' Index (PMI) a measure of factory production stood at 52.9 in October slightly up from September, when it was 52.8.

The Empowered Group of Ministers (EGoM) on the 2G auction headed by Kapil Sibal met on Thursday and decided to go for partial refarming, wherein operators will be allowed to retain 2.5 MHz through an administrative allotment by paying an auction-determined price. Bharti Airtel, Idea and Vodafone will get advantage with this announcement. These companies will have an opportunity to retain 2.5 MHz of spectrum at the time of refarming in the 900 MHz spectrum. If they do not want to pay a market-determined price, they may choose to surrender the entire spectrum. But, as far as the government is concerned, it is going to give an option to these telecom companies. (MoneyControl.com)

In a cabinet meet PM Mr. Singh told to cabinet for more promising output out of poor situation. He’d told “We are working against the political calendar, but we should not lose sight of the fact that we are also involved in the task of nation-building”

In a recent development in Spain, market regulator said on Thursday that it would extend the ban on short selling of all stocks on Spanish exchanges by an additional three months. The regulator had banned short selling of all stocks back in July in the wake of increased market volatility.

MARKET OUTLOOK –

Well, as suggested in MBells market opened weak y’day but was showing strength and then corporate earning no.s boosted the sentiment and later PMI. The way market is consolidating since long seems now players looking for some ground reality on reform announcement.

Now next step lies in the winter session of Parliament. Though there are many reforms that have been announced and they don’t need Parliament’s approval, there are also many things that can be done outside Parliament in terms of execution on the ground. Now market have heard announcement and is worried about the lack of investments which is slow down, so one needs to see physical activity happening on ground for that to pick up

The INDIA VIX on NSE end at 14.40 and F&O PCR is 0.93.

FII DERIVATIVES STATISTICS FOR 1 Nov 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	37500	1028.13	28842	794.98	371958	9119.92	233.15
INDEX OPTIONS	301294	8397.32	263811	7403.04	1656875	46769.33	994.28
STOCK FUTURES	44101	1189.57	39481	1080.05	1058059	28369.12	109.51
STOCK OPTIONS	32570	882.25	34981	957.12	58188	1623.14	-74.86

Data shows that OI has decreased and Nifty is up, so FII have done profit booking in Nifty & Bank Nifty Futures at higher levels. So data shows bullishness but movement still shows weakness, may due to fear of Friday or of US Prez election.

We need to play safe today and try to book at least partial profit in your positions as nothing harm in exit and re-enter.

NIFTY OUTLOOK –

Nifty Derivatives Statics as on 1 Nov 2012 (Key Facts)
Strike	OI	Change in OI	IV	Strike	OI	Change in OI	IV
Longs created				Shorts created
5700-CE	52,91,600	21,550	11.63	5300-PE	60,56,550	7,51,350	16.56
5800-CE	51,66,450	47,200	11.54	5400-PE	47,64,650	55,150	15.4
5900-CE	60,54,150	1,60,850	11.51	5500-PE	49,51,800	2,19,950	14.47
6000-CE	47,60,400	-2,97,800	11.82	5600-PE	56,99,600	4,72,600	13.74

Y’day OI on long side was very low and only 5.5 Lacs contracts added to key options. While it was a 3^rd day when above 7 lac addition to 5300PE has been seen. Approx 15 Lac fresh addition to key puts has been seen which is indicating weakness in coming days.

Resistance comes to 5662 - 5680 – 5710 and Supports comes to 5615 – 5585 - 5565. Here I would like to mention Nifty has strong support at 5580 & 5530. So if 5530 broken Nifty will go for gap filling and we will see Nifty below 5500 Mark while buying momentum is likely to accelerate above 5745 levels.

Opening seems on positive 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

Omkar Chemicals (New call) - @110 for Updated TG 122+ SL 106

ICICI 1150CE - @7.25 (Average price) for TG 20+ SL (NA – Hero to Zero)

Today’s MG Mantra –

Its Friday and then US Prez election on Tuesday, if get lucky then we may have space to settle position on Monday, so never try luck against the sentiment.

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.