Morning Bells (6 Nov 12)

Good Morning Friends.

I met money and said “You are just a piece of paper”, Money smiled and said “Ofcourse I am just a paper but I have never seen a dustbin in my life.”

So count-down has begun and the event has just a step ahead for which global economy was waiting. When we will wake-up tomorrow morning we would have name of the leader of world’s economy.

So let’s start with US Polls, in the view of all big experts it is a very close election, and now stock market too divided on preference. Stock market could prefer Romney so there should be more pro-business, but point of worry with Romney is that he has made it clear he would not reappoint Bernanke, so now it seems market may like Obama than Romney to win. Also many polls and experts results are suggesting Obama can win.  So if Obama wins, in view of India, our main focus will be Infra & Power sector.

Post US Polls there is the Greece vote on Wednesday as well, if the vote doesn’t go through there could be major worry with Euro zone economy crises, so I think market may remain under pressure and there could be negative waves.

On Home ground there’s another worry - rupee hit a 7-week low against the US dollar losing over 65 paise. It was trading around the 54.48 levels against the US dollar.

Meanwhile, Finance Minister P. Chidambaram was quoted as saying that India would end this year with 5.5 to 6%, barring any unexpected shocks. He was hopeful that next year the country would get back to 7% growth, and in 2014-15 get back to 8% growth.

There’s nothing much to say about market as this week will have stock specific action, today evening US polls will start while on Wednesday market will wait for news from Greece.

This week has QE from some 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 –

So as told many times, big investors will take cautious approach ahead of US Polls, once it’s over FII flows will resume. As already suggested market is in trading range, watch for breakdown or breakout of either side, keep eye on 5680 & 5730 both are trend deciding levels on closing basis.

On worry of US polls market may have dip of approx 50 points or near the support levels 5625 – 5580.

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 14.55 and F&O PCR is 0.93.

FII DERIVATIVES STATISTICS FOR 5 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	18313	500.67	22078	621.01	423922	10635.28	-120.35
INDEX OPTIONS	282403	7998.65	271274	7690.58	1689074	48183.20	308.07
STOCK FUTURES	27244	732.63	27223	743.62	1055755	28598.70	-10.99
STOCK OPTIONS	24462	683.60	26195	746.64	66129	1866.99	-63.03

Data shows that FII have sold Index Future, OI increased by 14,883 contracts and Nifty closed marginally up which indicates FII have done profit booking on their longs and created fresh shorts.

We need to play safe especially today & tomorrow, so be with strict SL or there could be under pressure session. Nothing harm in exit and re-enter.

NIFTY OUTLOOK –

Nifty Derivatives Statics as on 5 Nov 2012 (Key Facts)
Strike	OI	Change in OI	IV	Strike	OI	Change in OI	IV
Longs created				Shorts created
5700-CE	44,71,950	64,450	12.61	5400-PE	52,91,850	2,67,450	16.3
5800-CE	53,85,950	40,700	12.26	5500-PE	49,75,500	3,49,350	14.8
5900-CE	68,47,400	1,08,250	12.22	5600-PE	68,97,050	4,04,800	13.82
6000-CE	60,38,350	4,84,600	12.45	5700-PE	50,78,600	6,03,650	13.08

Huge shorts created y’day, now range is a bit narrow, 5900CE is having highest OI while 5700PE has highest OI on downside. This indicates a bit cautious approach and also indicating Nifty can remain below 5700 mark for next 2-3 sessions.

Resistance comes to 5715 - 5727 – 5745 and Supports comes to 5686 - 5667 – 5658 - 5625. Here I would like to mention Nifty has strong support at 5630 & 5580. So if 5580 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 seems mildly bearish and under pressure.

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

DB Realty - @102.5 for TG 115+ SL 94

Omkar Chemicals (New call) - @110 for Updated TG 122+ SL 106 – Booked profit at 119, call closed.

ICICI 1150CE - @7.25 (Average price) for TG 20+ SL (NA – Hero to Zero) – Exited at 7.5 at NPNL basis.

Infy 2450CE - @29 for TG 42+ Updated SL 18 – Exited at 24 with Marginal loss.

View 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 (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.)

Dishman Pharma – CMP 98.7 TG seems - 108 SL 91, R 100 – 101.5 – 103 S 97 – 95 – 94

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.