Morning Bells (5 Dec 12)

Good Morning Friends.

When the voice on the inside becomes more profound and clear than the opinions on the outside… then you have mastered life.

Today there’s nothing much to say as market will remain volatile ahead of voting on FDI in parliament which is today at 6PM. So when we wake up tomorrow morning market will be set for either direction.

Well debate over FDI in retail is underway and Nifty back on track in second half after flat opening, Nifty was stuck in a narrow trading band in the first half and gained momentum in the second half led by the Oil & Gas, Realty, Power, Banking and the Healthcare stocks. Even the Mid-Cap and the Small-Cap participated in the upswing and the consumer durables, IT, Auto and the metal stocks remained under pressure.

The actual fight is for market cap in retails sector, currently the share of organized retail is 6-7 percent of the market and experts assume that there is a huge jump and it increases three times in next 10 years, so it seems a great opportunity for FII and that there’s lot of pressure to approve FDI in retail and that’s the biggest hope on which FII is fuelling our market.

Well, meanwhile some random fact came out during the discussion over FDI in parliament which is BJP said - FDI in retail will lead to unemployment and the supermarkets will pay farmers and employees less. They also explained that fast food chain McDonald's do not source potatoes from Indian farmers for its fries.

So drama will continue as BJP don’t have any strong issue in recent so want to continue to oppose while Kapil Sibbal said that FDI thought was BJP’s movement.

In between the ruckus both the Samajwadi Party (SP) with 22 MPs and Bahujan Samaj Party (BSP) with 21 MPs in the Lower House have yet not clarified their position on the FDI issue, but the government expressed hope that the two parties would support FDI in retail, either in the form of a positive vote or an abstention to help the UPA scrape through.

BSP chief Mayawati had said her party would decide on the vote on the floor of the House but also said her party would not go with the "communal forces" (read BJP), hinting she would support the government on the issue while Mulayam Singh has also said same - said drop FDI but wont make any chance for BJP.

On global front, this week will see three market-moving data releases in the US -- ISM Manufacturing Index (Dec 3), Jobless Claims (Dec 6) and Employment Situation (Dec 7).

The outcome of the ECB governing council meeting in Frankfurt on Thursday will also keep investors on the edge.

So, overall, as said this week is full of excitement and traders need to be cautious as we have very important events as well as data this week which will influence the market for further move either side.

MARKET OUTLOOK –

Nifty gain its momentum in second half and closed up 18 points. Though most of experts and we know that Govt. seems confident about voting and most of that has already priced in, but as there always remain a doubt till result, situation is same for Indian market. So once result will declare market may take either direction.

Here I would like to warn you – if voting get success market will see a small rally and can attempt to 6000 by this weekend or mid of next week, there onward market will remain in uptrend because there enough is happening globally and in the macro economy to form a base. But if FDI voting fall down then we may see a sharp correction say over 150-200 points and then market will form a base for new high.

In the last two decades, the last month of the year has generated returns between 0.7% and 15.7%, which has given birth to the December phenomenon theory. Only four times in the last 20 years -1994, 2000, 2001 and 2011 - December has generated negative returns, states a recent Morgan Stanley report.

The INDIA VIX on NSE up 2% and ended at 15.91 and PCR is down 0.75.

The rupee gained a bit and traded at 54. 67 against previous close 54.89 as per NSE data.

FII DERIVATIVES STATISTICS FOR 4 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	20253	584.25	30144	893.19	374647	10933.47	-308.93
INDEX OPTIONS	265689	7799.95	281470	8296.73	1382264	40730.09	-496.78
STOCK FUTURES	35787	1032.15	39693	1183.10	1068945	30570.09	-150.95
STOCK OPTIONS	38664	1039.37	41884	1113.45	48036	1331.72	-74.08

FII sold 9891 contracts worth Rs. 308.93 Cr. and OI decreased by 2311 contacts in Index Futures.

NIFTY OUTLOOK –

Nifty will face resistance at / in the range of 5950 & 5980 while 5785 is the SL for longs for short term trend.

So for short term view Nifty seems in the range of 5785 – 6000.

6000CE has highest OI of 82.11 with fresh addition of 8.17, while huge addition of 9 lacs contracts added to 6200CE @ premium of 10.6. On short side 5500PE has highest OI of 65.77 Lacs while 5600PE to 5800PE has almost equal OI around 58 lacs. Today huge addition of 7.89 lac seen to 5500PE, I guess this would be in the hope any disappointment on FDI.

Nifty Future Dec series OI is 1.97 crore with fresh addition 0.36 lacs.

Resistance comes to 5903 - 5917 – 5939 - 5958 – 5990 and Supports comes to 5867 - 5845 – 5831 - 5785.

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 can decide stock move either side.)

Realty & Infra –

Till the investment board is set up for infra specifically don’t expect a major move in infra stocks at least over the next few weeks.

Realty sector is moving and as told earlier around expiry of current series would be good time to book at least partial profit in realty stocks.

Life Style Segment –

There’s news of good salary hikes and signal of increasing life style expenses. One can keep eye on Mahindra Holidays & Thomas Cook.

United Spirit –

While most of expert expecting stock to touch 1900 level after multiple high Shares of UB Holdings ended higher by 5% while shares of United Beverages Limited shot up by over 18%. 

Auto Sector –

TVS Motor –

TVS Motor Co said it expects to finalise before the end of the ongoing fiscal a partnership with BMW for collaboration in two-wheelers. "Talks are on (with BMW) and we expect something to materialise before the end of the ongoing fiscal," TVS Motor Co President (Marketing) HS Goindi told media. The company is in talks with the German firm, which has also started selling high-end performance bikes since 2010 in India.

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

IMPORTANT NOTICE – Market may react sharply on FDI voting result, so if it falls down during voting then one needs to keep strict SL (8-10% from CMP) on all open position, as then we may see a deep correction in Nifty and mid caps will be key sector which will be most target most.

KP IT - @127 for TG 140+ SL 117 – Exited at 126.5 with NPNL

Dish TV - @78 for TG 84+ SL 72 – Exited at 78 with NPNL

DB Realty - @128 for TG 145+ SL 107

Dishman - @118 for TG 130+ SL 107 (Has given buy signal and may see some move in this series)

Jindal Photo - @145 for TG 160+ Updated SL 126 (126 on closing basis, volatility SL 123)

ITC – Shorted @298 for TG 290+ SL 303 - Exited @ 296 as had informed to exit in early session.

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

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

Mahindra Holiday – @334 TG 375+ SL 295

Satyam Computer – @103 TG 130+ SL 95

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

(Intraday to 1-2 sessions) –

DB Corp - @219 for TG 240+ SL 201(1-4 week)
 

For more update - stay on blog during market hours.

Today’s MG Mantra –

To all blog members & visitors, though there’s no big worry seems but market will react sharply on FDI, so if it falls down during voting then one needs to keep strict SL (8-10% from CMP) on all open position.

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.