Morning Bells (5 Nov 12)

Good Morning Friends.

Throw your PAST (except experience) in the dustbin, keep the PRESENT on your working table and display your FUTURE on the notice board.

So how was the week? Hope everything is going smooth, now a bit pause ahead of world leader worry. Well right now sentiment seems smooth on home ground.

Due to few big errors and bad experience slowly-slowly our stock exchange has developed a good system, so we do not need to worry much about it as Sebi has keen eye on that all happenings. Promising hawk-eye vigil on those trying to make unlawful gains through manipulations, market watchdog Sebi has said it has developed a surveillance system that even foreign regulators are looking to emulate.

Sebi Chairman U K Sinha said told PTI that "From the system that was there earlier and the system and processes we have got right now, there is a world of a difference... In fact, my impression is that many of the countries do not have such kind of systems in place. Some of the regulators outside India are looking at our systems. When I attend IOSCO meetings and exchange data, we find that our system is quite advanced." Sinha told PTI in an interview here.

In another optimistic note, Prime Minister's Economic Advisory Council (PMEAC) chairman C Rangarajan has said that there is no case for lowering India's credit rating and the global agencies need to look at the international scenario before taking any rating action. "The rating agencies also need to recognise the fact, we have taken some strong actions in the recent period. Therefore I believe the rating agencies do not have a strong basis for reducing the rating of India," told to PTI.

This week will have stock-specific action in view of earnings from a slew of blue chips, major corporate result announcements this week include Cipla , Tata Power , Reliance Infrastructure , Hindalco , Bharti Airtel, Tata Motors, Sun Pharmaceuticals Industries, ONGC , Ranbaxy , Tata Steel , Jindal Steel & Power, Coal India and SBI.

For a mid-term view – since financial markets have suffered over the last four years with the mortgage crisis, the Lehman crisis, Greece, Europe and policy paralysis in India. Now there is a lot of optimism about Europe and America that markets will make new highs.

There are also hopes for fall in commodity prices because equity fell down and commodity enjoys the bull phase so now either the end of the bull market or there could be a correction, and with hope of that foreign buying is coming because we are the country that is going to benefit the most from the fall in commodity prices. Let’s see what happens.

MARKET OUTLOOK –

Markets may open lower as US stocks closed lower on Friday. Also after a spectacular rally, some profit booking can be seen as investors will also track the US presidential election, which is scheduled on Tuesday.

After biggest event of the year i.e. US Polls, post that we will be again on home ground and reforms may take the centre-stage again with developments on several important bills for which parliamentary approval is needed is expected to be taken up in the winter session.

Market is consolidating since long seems now players looking for some ground reality on reform announcement. So one needs to see physical activity happening on ground for that to pick up

The INDIA VIX on NSE end at 13.66 and F&O PCR is 0.94.

FII DERIVATIVES STATISTICS FOR 2 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	61543	1616.73	33350	914.30	409039	10230.03	702.43
INDEX OPTIONS	287339	8148.23	272609	7720.63	1685013	48012.59	427.60
STOCK FUTURES	43216	1178.29	34093	925.21	1054562	28580.46	253.08
STOCK OPTIONS	38041	1064.41	38155	1059.93	62010	1747.44	4.48

 
Data shows that OI has increased with huge 37,081 contracts and Nifty went up, so FII have initiated fresh longs in Nifty & Bank Nifty. So FII data showing bullishness but approach seems cautious if we look to Nifty option data may be ahead of US Prez election.

We need to play safe especially today, may be there’s trap to book profit at higher levels so be with strict SL especially in second half. Or maybe there could be flat session. Nothing harms in exit and re-enter.

NIFTY OUTLOOK –

Nifty Derivatives Statics as on 2 Nov 2012 (Key Facts)
Strike	OI	Change in OI	IV	Strike	OI	Change in OI	IV
Longs created				Shorts created
5700-CE	44,07,500	-8,84,100	12.33	5300-PE	59,95,900	-60,650	16.89
5800-CE	53,45,250	1,78,800	11.84	5400-PE	50,24,400	2,59,750	15.31
5900-CE	67,39,150	6,85,000	11.62	5500-PE	46,26,150	-3,25,650	13.98
6000-CE	55,53,750	7,93,350	11.78	5600-PE	64,92,250	7,92,650	12.95

Nifty data show fall in OI in 5700CE and 5300PE which is somehow showing a bit cautious approach.

Resistance comes to 5711 - 5725 – 5740 and Supports comes to 5683 - 5667 – 5654 - 5625. 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.

Trend deciding levels are, on downside keep eye on 5625, can lead to 5500-5450, while some buying momentum can be seen above 5725 and can lead to 5750-5850.

Opening mildly bearish as US market ended lower and there’s also worry ahead of US Prez election.

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

DB Realty - @102 for TG 115+ SL 94

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

Infy 2450CE - @29 for TG 42+ Updated SL 18

On Public Demand –

With receiving lot of request but you all know I don’t make call until I don’t track stock, so I just expressing SR Levels and small view on blog members demand, but still you need to track records and take my view as my very personal view.

Note – Remember as told market may open lower today and we need to take advantage of that for good level entry into stocks.

IVRCL Infra – CMP 41.6 TG 44.5 SL 38, R 42.5 – 43.3 – 43.9 S 40.4 - 39.5

(Result on 10 Nov)

(Stock may show weakness in opening. Lot of infrastructure stocks have giving signs of life as realty prices are now started moving up a bit, also there’re lot of hopes with single window infra clearance. So don’t make long positin but it’s a momentum play. IVRCL seems good bet for 1-2 sessions. One can make strategy with 2CE v/s 1PE for good profit.)

Hindalco – CMP 117.7 TG - Not beyond 122 SL NA, R 119 – 120 – 122 S 116 – 114.5 – 113.5

(Result on 6 Nov)

(Result factor is already priced in and do not have potential for a good move right from here, it will strong resistance at 121 & 122, if it crosses 122 then 125-126 is the point from where it may have correction. So I would prefer to wait for right time to go short.)

Today’s MG Mantra –

Market may remain choppy or in tight range, it would be best to book profit on your position and then re-enter on Wednesday else be with tight SL.

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.