Morning Bells (18 Dec 12)

Good Morning Friends.

Whenever you are in position to help someone, just do it and say thanks to god that he gave you chance to answer someone’s prayer.

Once again market behaved as per expectations and Nifty ended 22 lower. We had discussed in past 3 days that market participants will prefer to stay cautious ahead of the RBI policy meeting scheduled to be on Tuesday.

The decline was led by the Telecom, IT, FMCG Tata Power, Maruti Suzuki, Dr Reddys Lab, Tata Steel, Sun Pharma, ICICI Bank, HUL, NTPC, Bajaj Auto, Cipla, Sterlite Inds were among gainers while RIL, Infosys, TCS, Wipro, Coal India, ONGC, HDFC Bank, HDFC and BHEL were among losers in Sensex and Nifty.

Sentiment also took a beating after Government announced that it expects the economy to grow between 5.7-5.9% in the current fiscal, which is much lower than 7.6% projected in the Mid-Review Economic Survey. The Finance Ministry also estimates inflation to moderate to 6.8-7% by March 2013. It also says that trade deficit would not be significantly higher than last year. 

Well today is the day of RBI monetary policy announcement for which market is waiting since long. So lets see what RBI does today.

According to CNBC-TV18's poll, 70 percent of bankers and economist expect the Reserve Bank to cut cash reserve ratio (CRR) by 25 to 50 basis points. Only 30 percent expect RBI to keep the CRR unchanged. Most don’t believe the Reserve Bank will cut policy rates. Infact 90 percent said no repo rate cut.

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 –

So again, market will remain volatile and can see some pressure as ahead of uncertainty of decision. I expect following 3 results market may see after RBI announcement –

1. So if RBI surprise then market may move ahead (don’t expect any big run).

2. If RBI announces as per expectation - market may see some profit booking and can attempt to 5800 mark, only small probability to see some support ahead of Gujrat Poll Results.

3. If RBI disappoint - then market may see sharp decline and can break strong support zone of 5785.

The INDIA VIX on NSE was up 4.85% and ended at 14.92 against 14.23 and FNO PCR is 0.91.

The rupee on Monday ended at 54.84/86, weaker than its previous close of 54.48/49.

S&P 500 (US) ended lower at 1426 up 12.39 points at the time of writing Morning Bells.

FII DERIVATIVES STATISTICS FOR 17 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	17631	520.50	15410	455.91	415211	12081.55	64.59
INDEX OPTIONS	316527	9265.72	296767	8707.75	1588304	46593.90	557.97
STOCK FUTURES	47143	1362.82	61739	1842.09	1170149	33798.53	-479.26
STOCK OPTIONS	39530	1126.61	41196	1172.18	74414	2055.62	-45.57

FII bought 2,221 contracts worth Rs. 64.59 Cr. and OI decreased by 779 contracts.

NIFTY OUTLOOK –

Today its going be a big bang, all market participant eying on RBI policy announcement, so market may remain highly volatile before announcement.

So no strong for Nifty at the moment, just watch for range and then decide your trade accordingly, don’t-don’t go against the flow else you will be washed out.

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 5835 & 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 5879 - 5900 – 5915 - 5965 and Supports comes to 5835 – 5828 – 5807 - 5785.

Opening seems flat to positive.

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 –

In view of RBI outcome positive or negative, following stock shall be watched.

For long – Axis Bank, SBI, Yes Bank, ICICI & HDFC seems good bet.

For Short – PNB

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.

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. 

Metals –

Metal will shine in near term, recommended metal stocks to watch closely are Tata Steel, Hindalco Industries  and Steel Authority of India  (SAIL).

IT –

India's No. 2 software services provider Infosys may cut its revenue forecast next month as US business clients defer spending and balk at signing big deals. So remain careful Infy time being. Report doesn’t mean its going to react sharply right now. Follow Infy till its announcement.

============ 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 – Booked Profit @ 145 (Rs. 17 gain)

Dishman - @118 for TG 130+ SL 107

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) –

If Market open positive then (after first 15 minutes) one can bet on SBI around 2340 SL 20 pts from Open price for TG 2365+ and ICICI Bank around 1144 for TG 1162+ SL 18 points from open price. And don’t bet if market turned negative in first phase.

Low risk takers can bet with SBI 2400CE & ICICI 1200CE

For more update – stay on blog during market hours.

Today’s MG Mantra –

Its only RBI, read 3 probable move after RBI announcement in Market Outlook section. Stay away before RBI announcement if you are not sure about trade, you may burn fingures.

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.