Morning Bells (15 Jan 13)

Good Morning Friends.

Speak in such a way that others will love to listen to you. Listen in a way that others will love to speak to you.

Oh! Its was Makar Sakranti, the day of Kites and seems our market was flying like that. After stellar performance by Infy, Monday was the day for TCS, but as a tradition TCS decided to announce corporate earnings after market hours. Market was eagerly waiting for WPI Inflation figure.

Here I would like to inform you that many people were not aware about it i.e. Inflation figure will be announced y’day and many popular site hadn’t had a single word about it while it was the most important event. Because this is the key indicator whether RBI will cut interest rate on 29 Jan. or not, may be they wont but Inflation figure gives hope that now inflation is coming under control and reducing slowly-slowly.

Well, market was expecting it around 7.3 as compared to 7.24 of Nov. i.e. slightly higher, it was also OK but when it comes surprising market cheers! Inflation 7.18 in December slowed to a three-year low and bank stocks rallied. Nifty was up around 40 points and was showing some volatility and finally the much awaited statement from FM came out – they differed on GAAR till April 2016, ie. FII investors get breather on tax paying, which means FII to continue brining more funds to India. Market rally and reached 80+ points within few minutes and finally closed almost days high.

As we are discussing DII move since past couple of days, y’day it tried twice to put Nifty under pressure was selling heavily, but finally technical indicators triggered and market rallied.

Now for today – TCS has beat the street expectations, India's largest software services exporter's revenue rose 3 percent sequentially (22 percent year-on-year) to Rs 16,070 crore and third quarter net profit of Rs 3,551 crore, up 1 percent (up 23 percent from a year ago), helped by new deal wins, Dollar revenues increased 3 percent to USD 2,948 million.

So now it would be interesting to see whether market moves up further or deny, as today we have double effect – first TCS result effect and then market will wait for Axis bank Q3 Nos.

The Planning Commission y’day made a case for lowering of interest rates for attracting investments and reversing the declining trend of economic growth.

Gainers – RIL, Infosys, TCS, ICICI Bank, Tata Steel,  Dr. Reddys Lab, Tata Motors, NTPC, Bharti Airtel, Jindal Steel, Hero MotoCorp, ONGC, Tata Motors, Hindalco Inds, BHEL are among gainers in Sensex and Nifty.

Losers - Wipro, Tata Power, SBI, HDFC Bank, Coal India, Sun Pharma, M&M, Bajaj Auto, Maruti are among losers in Sensex and Nifty.

Sectoral - Realty and IT stocks were among gainers in Sensex and Nifty. Realty index was up 5%, while IT index was up 3%. Other indices were Oil and Gas , HC, PSU, Power, Metal, Power, Teck, Oil and Gas, Consumer Durables, Bankex, Capital Goods, are the gainers while the Auto index was the only loser.

HCL Technology (671, up 4%) & Mahindra-Satyam (118, up 2.47%) hit 52 week high y’day. We had initiated Satyam call few days back @103 and our fellow are getting approx 20% profit in just few days. (please refer Investment Basket section for more details.)

The Organization for Economic Cooperation and Development said that its leading economic indicator suggests that the global economy is stabilizing as the U.S., U.K., China and India return to growth.

The composite leading indicator for the U.S. climbed to 101 in November from 100.8 in October, the Paris-based OECD said today in an e-mailed statement. The reading for the U.K. rose to 100.7 from 100.5, while China’s reading climbed to 99.7 from 99.5. (IIFL)

MARKET OUTLOOK –

This week market to react on corporate earnings of industry heavyweights, especially if there’s any disappointment. This week we have industry heavyweights TCS (Mon 14 Jan) Axis Bank & Reliance Ind. Infra (Tue 15 Jan) with Friday blockbuster Wipro, HDFC Bank & RIL (Fri 18 Jan) and I am expecting no one of them will disappoint and will help Nifty to hold its current levels. And besides earning results India will release December inflation data on Monday which will be watched closely as it will give indication for RBI poloicy rate cut.

As discussed Nifty is on the lower end of range and buying momentum to come above 6030-6040, if Nifty crossed levels decisively then Nifty will switch to 6050-6150 band.

I had also informed you to some profit booking also comes between 6050-6100 range but now since inflation figure is in under control, GAAR differed to 2016, market can hold a bit till RBI policy announcement and also market is eagerly waiting price hike in Diesel.

Trend is still buy on dips with a bit cautious approach and till 5915 is safe. Next trigger RBI policy on 29 Jan. In between triggers could be announcement on Diesel price hike, and some more triggers would be announcement of good quarterly nos from 2-3 good high beta.

The INDIA VIX on NSE rose 3% and ended at 13.72 against 13.23.

FNO PCR is 1.05 against previous close 0.97.

Indian Rupee got stronger 0.26 Paisa against USD y’day and was trading at 54.50 lower than its previous close 54.75/76.

S&P 500 (US) was trading at 1468.67 down 3.38 then its previous close at the time of writing M Bells.

NIFTY OUTLOOK –

So finally Inflation figure & GAAR made it possible and Nifty moved above its physiological level of 6000 mark, so till its not sustain that level confidently it remain subdued as I see further buying momentum come only above 6,030 level and may trade within 6,080-5,950 range.

Note that – once Nifty will try to cross 6050, bears will give attempt with full pace to drag, so 10-15 points from here can trigger for short covering and we can see sudden spike.

Nifty is in range of 5835-5885-5990-6040-6090 for current week.

Resistance – 6053 – 6082 – 6128 and Support – 5978 – 5932 -5903

Opening once again seems flat and then market can go for volatility.

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.)

RIL –

Reliance Industries ' KG-D6 gas field has seen production drop to just 22 million standard cubic meters per day as the company shut over a third of wells due to high water and sand ingress.

Tata Steel –

Tata Steel KZN reportedly shut two ferrochrome furnaces in South Africa to help power utility Eskom manage.

The Tata-Eskom deal follows shutdowns by other ferrochrome producers in the country, including a joint venture between Merafe Resources and Xstrata, report says.

There were reports that Tata Steel KZN's plant, located at Richards Bay on South Africa's eastern Indian Ocean coast, produces 150,000 tonnes of ferrochrome.

============ 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 even small profit if Nifty doesn’t shows strength.

TCS 1400 CE – @16 TG TG-35+ Updated SL 22 (Active 11 jan 12)

Bajaj Auto 2150 CE – @28 TG-45 / 50+ SL 19 (Max 2 Lot) (Active 14 jan 12)

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

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

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12) CMP – 330 (Gain -1%)

Satyam Computer – @103 TG 130+ (Active from 15 Dec 12) CMP – 115 (Gain +11%)

On Mobile – @44 TG 60+ SL 41 Qty 2K (Active from 01 Jan 13) CMP – 45 (Gain +2.5%)

============ HOT SHOT ============

Keep eye on following stocks, if Nifty shows strength then these stocks can give you reasonable return in very short term –

============ PL Sheet (started from Jan 2013) ============

MG Blog –

Cash = +9,650.00

FNO = +11,500

Billionaire Club

TOTAL = +29,750.00

Today’s MG Mantra –

Go with rate sensitive stocks and OMCs.

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.