Morning Bells (17 Dec 12)

Good Morning Friends.

Don’t think that time will change your life, remember “Time” can only change the date of expiry of opportunities.

Oh! Inflation came down to lowest in 10 months, figure shows relief but many experts don’t believe in it. Instead of Govt. push towards reforms and better than expected IIP & WPI investors turned cautious after the recent run up and other key events like the RBI policy meeting. 

WPI for November stood at 7.24% (Provisional) for the month of November, 2012 (over November, 2011) as compared to 7.45% (Provisional).

A moderation in inflation is a pleasant surprise, but I think yet the number is quite high against the RBI’s comfort zone but its also true that lower than expected inflation number has increased the expectation of market particiapnt. Lets see what RBI announce on Tuesday 18.

According to MoneyControl - Seventy percent of bankers and economists we polled expect RBI to cut CRR by 25-50 bps. Only 30% expect RBI to keep CRR unchanged. And most don't believe that the RBI will cut the policy rate.

So enjoy the gloomy sentiment and bet on rate sensitive stocks with a bit tight TGs & SLs, yes more importantly don’t go for a big deal, it could be “Hero ya Zero”.

The government's reform push continued with the Cabinet clearing the proposal to set up the Cabinet Committee on Investment, which will expedite projects over Rs1,000cr by setting timelines for concerned ministries. Cabinet also approved a urea policy that will make the country self-sufficient in fertilizers besides brining in projects to the tune of Rs350bn, reports stated. A 30% cut in the base price of airwaves is among the other decisions taken by the government.

On Friday, the top gainers in the Sensex were Reliance Capital (up 4.2%), Tata Motors  (up 3.6%), Reliance Infra (up 2.8%), Hero Motocorp (up 2%) and HDFC (up 1.7%) while The top losers were BHEL (down 7.4%), Tata Power (down 4.6%), NTPC  (down 4.4%), Grasim (down 3.3%) and Hindalco (down 3.1%).

On global front - this could be the week when markets lose patience with politicians and the "fiscal cliff." There have been talks between the White House and Republicans, but there were no visible signs by Friday of a deal that would bring about a compromise on taxes or spending.

RBI Monetary Policy Review - 18 Dec 12

MARKET OUTLOOK –

Since past few days we are bang on Nifty, but I don’t know how many of you have made money. I have told many times don’t go against market breath. Market just reacted what we have mentioned in MB about inflation figure, have a look what we had predicted -

1.  As told in past 3 MBells and informed that it seems that market have reached to some kind of a resistance point, so its not only profit booking but also seems fatigue, so market can face few more choppy sessions.

2.  So if today inflation remains on higher side (i.e. disappoint then expectation) then market is surely going to test lower levels below 5800 mark and trading range will shift to 5700-5950. And if inflation figure comes as per expectation or surprise then it will remain balanced (don’t expect any huge rally) but yes bank stock will rally. Also remember its Friday. So power of weakness is more than strength.

So, it was a flat week for the market, although wasn’t a bad week. But as told few times earlier, now short term trend is changing slowly-slowly towards down and will remain range bound till RBI policy and if RBI surprise then only I see some upmove else market is going down from here.

The INDIA VIX on NSE was up 1.38% and ended at 14.71 against 14.51 and FNO PCR is up at 0.93.

The rupee fell to its lowest on Friday ended at 54.48/49, weaker than its Thursday closed at 54.46/47.

S&P 500 (US) ended lower at 1413.58 down 5.87 points at the time of writing Morning Bells.

FII DERIVATIVES STATISTICS FOR 14 Dec 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	29470	878.03	34240	1012.16	415990	12153.42	-134.12
INDEX OPTIONS	422211	12432.57	422016	12417.47	1579794	46510.05	15.10
STOCK FUTURES	45074	1288.46	44847	1310.29	1157357	33354.96	-21.83
STOCK OPTIONS	55583	1577.30	55397	1568.25	73866	2040.93	9.04

FII sold 4,770 contracts worth Rs. 134.12 Cr. and OI increased by 560 contracts.

NIFTY OUTLOOK –

As expected market remains range bound instead of better than expected WIP nos. Now investors will keep close eye on RBI Monetary policy review on 18^th and Bank stock shown good move on hopes that RBI can go Santa.

But as warned so many times, now its again time for a another warning bell, Nifty behaviour give us thought - when the market opened high and closed at the lows of the day, for three successive days, it shows sign market is fatigue and not only profit booking.

So remember – upside seems capped (except RBI surprise) and there’s more room for downside. As discussed earlier Nifty will face resistance in the range of 5950-5980 (more accurately around 5965) and downside it will have strong support around 5785, so may be market may remain in this range for few more session but once market will start its downward journey then it can even breakdown 5785, so it would be better to keep 5785 as SL for longs in Cash and 5835 for FNO. Mid term trend is still buy on dips.

Resistance comes to 5897 - 5915 – 5944 - 5965 and Supports comes to 5850 – 5821 – 5803 - 5785.

Opening seems a flat to under pressure.

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 will help you in taking positions.)

Banks –

Credit ratings agency Moody's lowered the rating outlook of Punjab National Bank, Bank of Baroda and Canara Bank from stable to negative on account of rising bad loans.

Realty, Infra & Power –

Realty - Now this sector will remain stock specific and in general view, most of realty stock may show weakness.

FMCG –

Considered to be defensive stock but many FMCG stocks showing weakness, we may see weakness in ITC, HUL, Dabur & Titan.

Coal & Minings –

NMDC -

Watch if it comes around 150 level then it will remain under performer for mid term and if it crosses 167 level then will see some good move in near term and stock may visit around 190 levels.

Coal India Limited -

From the energy security point of view Government has encouraged acquisition of coal assets abroad. Accordingly, Coal India Limited (CIL) has taken initiatives to acquire coal assets abroad through its Coal Videsh Division.

Auto Sector –

Tata Motors -

The Board of Directors of Tata Motors today announced the appointment of  Cyrus P. Mistry as the Chairman of the Board with effect from December 28, 2012, on the retirement of  Ratan N. Tata. 

============ 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.

DB Realty - @128 for TG 145+ SL 107 (plz book profit above 140)

Dishman - @118 for TG 130+ SL 107

Jindal Photo - @145 for TG 160+ Updated SL 126 on closing basis. (Exited @ 126 with loss)

DB Corp – @219 TG 240+ SL 201 (1-4 Week)

============ INVESTMENT BASKET ============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+

Satyam Computer – @103 TG 130+

============ TODAY’S PICK ============

(Intraday to 1-2 sessions) –

For more update – stay on blog during market hours.

Today’s MG Mantra –

Don’t fall under excitement, read market outlook and Nifty outlook carefully – and act as per suggestion, you can make huge profit in 3 days.

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 or consult your financial advisor.

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