Morning Bells (16 Jan 13)

Good Morning Friends.

RISK is my life, POSSIBLE is my hope, IMPOSSIBLE is my enemy, DANGEROUS is my game. That's my name is MG.

Jara Yaad Karo woh Kurbani – I know, many of us now don’t believe on such lines and even few laughs, because they feel “Mujhe Kya (I am not concern with it)”, but think if every patron will start thinking like that then what will happen? The first think which will disappear will be this stock market, dreams of millions will be washed out.

Well, finally our great leaders woke up from deep sleep, I was watching a discussion on NDTV 4 days back, a retired army officer who fought 2 battles told a real truth “Jitane neta he, inka apana koi army me he nahi, inhone kabhi koi apana khoya nahi, isiliye inhe aman ki aasha ki bat karana achcha lagata he” – why our countrymen are not like US citizens, if we will be like that, believe me, our next politicians will be like Obama or Bush.

(PS-with no intention to heart anyone, just my personal thought)

Well, finally our PM admitted it (may be under pressure) that now no usual business with Pak in this circumstances.

So, here’s our business, Finally the moment come when Senses saw a two year high today 20,000 Mark, made high 20,036. Realty & Bankes helped a lot to Sensex to bring this joyful moment. Nifty also managed to close above its physiological level of 6000.

Actually following reasons helped a lot to continue the momentum which are Govt’s decision to defer the implementation of controversial rules on tax avoidance, has been a big positive for the market. Strong corporate earnings (Infosys, Axis Bank and TCS) reported so far and expectations of a rate cut by RBI following a downward trajectory in WPI inflation are suggesting that the current rally is likely to continue with minimal correction in the immediate term. 

The fact that FIIs have already pumped in ~Rs87bn this calendar year into Indian equities shows the inherent strength in the market

FDI - The government today cleared four FDI proposals totalling about Rs 1,287 crore, but Swedish furniture major IKEA's proposal for setting up cafeterias in retail outlets was not taken up for consideration. For more details -

http://www.moneycontrol.com/news/business/fdi-worth-rs-1287-cr-cleared-ikea39s-case-not-taken-up_808197.html#toptag

The finance ministry has finalised norms for new bank licenses and has sent its comments to the Reserve Bank of India (RBI). CNBC-TV18's Siddharth Zarabi reports this exclusive.

Gainers – TCS, SBI, Tata Steel, ONGC, Bajaj Auto, Tata Motors, NTPC, Hindalco Inds, BHEL, HDFC, Bharti Airtel, ICICI Bank, Gail India are among gainers in Sensex and Nifty.

Losers - RIL, Infosys, Hero MotoCorp, M&M,  Dr Reddys Lab, Sun Pharma, Sterlite Inds, Coal India are among losers in Sensex and Nifty.

Sectoral - Oil and Gas , HC, PSU, Realty, Power, Oil and Gas, FMCG, Capital Goods, Consumer Durables, Bankex, were the gainers while Metal, IT indices were the losers.

Some other Domestic news are –

Telecom shares Bharti Airtel and Idea Cellular surged on speculation the Indian mobile carriers may raise voice call tariffs.

Shares of cement companies rose over 2 percent on news of them drawing up plans to  question the legality of the cartelisation case when it comes up for hearing before the Competition Appellate Tribunal (Compat) on 29 January.

On Global front –

Ratings agency Fitch issued a strong warning to the United States on Tuesday to deal with its recurrent debt-ceiling dramas in a way which strengthens the economy in the long term, saying that its top "AAA" credit rating was at stake.

S stocks fell on Tuesday on worries over the debate brewing in Washington over raising the US borrowing limit, while Apple's stock extended its fall on concerns of weaker demand for its products.

Economic data offset some of the negative tone after retail sales rose more than expected in December. But manufacturing activity in New York state contracted for the sixth month in a row in January.

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.

MARKET OUTLOOK –

As discussed in past 3 days, 2-3 good earning result will give strength to market, and finally first Infy then TCS and then Axis bank gave breather and momentum breather provided by Inflation figure and GAAR.

Now all eye will be on Bajaj Auto (Wed 16 Jan) with Friday blockbuster Wipro, HDFC Bank & RIL (Fri 18 Jan) and I am expecting no one of them will disappoint except RIL and will help Nifty to hold its current levels.

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.

Now as discussing now it would be interesting to see whether some profit booking comes between 6050-6100 range or not. On broad basis market to 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 down 0.88% and ended at 13.58 against 13.70.

FNO PCR is 0.89 against previous close 1.05.

Indian Rupee declined 0.12 Paisa instead of positive market against USD y’day and was trading at 54.61/62 against its previous close 54.49.

S&P 500 (US) was trading at 1470.55 down 0.19 then its previous close at the time of writing M Bells.

NIFTY OUTLOOK –

So finally Nifty moved and closed above its physiological level of 6000 mark, I see further buying momentum come only above 6,030 level and may trade within 6,080-5,950 range. Its also not ruled out that some profit booking will be seen between 6050-6100, but after a small correction it will move further next week.

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.

FII sold 3276 contracts of Nifty & Bank Nifty futures worth Rs. 103.06Cr. with net OI increased by 9254 contracts indicating FII have booked profit in longs. Volume also suggesting lake of participation at higher levels.

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

Resistance – 6077 – 6097 – 6127 and Support – 6027 – 5998 -5977

Opening seems a bit downside ahead of global cues and profit booking at higher levels. Market to show some strength in later part.

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.)

AirTel –

Sanjay Kapoor, CEO (India and South Asia) has resigned from the company and Gopal Vittal will take over as the head of its Indian operations with effect from March 1, 2013.

"After almost 15 years of illustrious innings at Bharti Group, Sanjay Kapoor, CEO (India and South Asia), Bharti Airtel, has decided to pursue his future aspirations outside of Bharti," the company said in a statement, announcing some top level changes.

Tata Motors –

Globally sold 98,968 units in December. The sales growth was 3 percent lower from what it sold in Nov. So far this financial year, Tata Motors has dispatched 8.81 lakh units.

Tata Motors shares closed up 1.2 percent at Rs 331.55 on NSE on Tuesday. The sales numbers were announced after markets closed.

Tata Motors has initiated an organisation restructuring which includes hiving off ‘quality’ as a separate vertical. The company will also set up a strategy for acquisitions

Bajaj Auto –

Will announce its Q3 Nos. today.

Analysts on average expect the company to report a net profit of Rs 842.7 crore, up 6 percent year-on-year, while revenue is seen up 8 percent at Rs 5,449.1 crore, according to a CNBC-Awaaz poll. It must be noted that Bajaj Auto had an exceptional loss of Rs 59 crore due to valuation losses on derivative hedging instruments in the year ago quarter.

Deccan Chronicle –

The National Stock Exchange said trading of shares in Deccan Chronicle Holdings Ltd would be suspended from January 23, saying the newspaper publisher failed to provide shareholding and financial information.

The NSE said Deccan Chronicle had not provided financial results and information on shareholding patterns as required for listed companies.

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)

(SL hit @22 – Total gain 1500)

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

(Booked profit @40, Total gain 3000)

============ 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) ============

(If someone find any error in PL, please draw our attention)

MG Blog (Total 25,650) –

Cash = +9,650.00

FNO = +11,500 + 4,500 = 16,000

(Gain from Bajaj Auto 3000 + Gain from TCS 1500 = 4500)

Billionaire Club

TOTAL = +29,750.00 + 14,750 = 44,500

(Gain from Axis Bank future 5250 (@1389 sold 1410) + Tata Steel future 6500 (@ 423.5 sold 430) + Bajaj Auto 3000 (@28 sold 40) = 14,750)

Today’s MG Mantra –

Go with rate sensitive stocks and OMCs. Also its not bad idea to book partial profit at higher levels just to keep safe your investment.

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.