Morning Bells (5 Apr 13)

Good Morning Friends.

Good Results are generated at the END of the day, only if – Good Thoughts are generated at the beginning of the day.

PLEASE READ TODAY’S MORNING BELL CAREFULLY, I HAVE GIVEN IT MY BEST TIME AND TRIED TO PUT IMPORTANT INFORMATION WHICH WILL HELP YOU ALL A LOT IN COMING DAYS OR SAY FOR REST OF THE YEAR.

Once again a massacre in DStreet continued for second day. Oops, I am sorry, we managed to escape in last two shootout, first one in Feb end and second in March after RBI outcome, but yes this time we missed and caught under fire as I was expecting this sell of next week onward, but it took place earlier when US job report went against market expectation. Since IT index was the main index which was imitating downside and today it too broke down and that’s we saw such a huge fall in Nifty. Now my all hopes is with 5545, if this level broken then we may see around 250-300 points fall in coming weeks and immediate trend will turn Negative.

The Indian equity market further cracked on Thursday extending its downfall to the second straight trading session. The Nifty has now dropped ~170 points in last two trading session. The benchmark indices witnessed accelerated selling pressure after the Nifty breached the 200 Day Moving Average third time in the past six trading session.

The index heavyweights like JP Associates, Jindal Steel, HCL Tech, Reliance Infra, DLF and Tata Steel led the decline. Only seven stocks ended in the green out of the 50 stocks of Nifty index.

Realty stocks were biggest losers of the day. BSE realty index ends the day with losses of 3.24 percent. DLF loses 4 percent, Sobha Developers down 5.5 percent, HDIL down 5.3 percent.

IT stocks took a u-turn in trade today. After gaining 24 percent in the March quarter, the index was down 2.45 percent today

Gainers –

Maruti, Coal India, Dr Reddys Lab, HUL and M&M were among the major gainers in Sensex and Nifty. 

Losers –

RIL, Infosys, TCS, Wipro, Sun Pharma, Tata Power, NTPC , ICICI Bank, SBI, Bharti Airtel, Hero MotoCorp, Bajaj Auto, ONGC, Sesa Goa, Gail India and HDFC were among the major losers in Sensex and Nifty.

Hero MotoCorp hit 52 week low today.

Sactoral –

Only the S&P BSE Pharma index ended with marginal gains. Even the S&P BSE Mid-Cap and the Small-Cap index which outperformed the benchmark indices came under pressure.

Domestic Front –

Sugar De-Control –

The Cabinet Committee on Economic Affairs has finally decided to decontrol the sugar industry.

In other words the regulated release mechanism and the levy sugar obligation has been done away with.

Global Front –

US –

Globally, the Rally in the US came to a halt after the Federal Reserve could start tightening its US$85bn a-month asset-purchase plan by the summer.

EU –

European stock markets struggled for direction on Thursday, as investors awaited the latest monetary decisions from the European Central Bank and the Bank of England.

=====================  MARKET OUTLOOK  =====================

The benchmark indices have closed below their 200-Day Moving Averages for first time since August 2012, which is a bearish sign.

A fall below this average indicates breach of support and market participants consider closing their long positions inferring the long term trend has turned bearish. 33 stocks in the Nifty are trading well below its 200 DMA.

Also, Experts are comparing it and believing that its making same pattern as 2008. In fact after breaking the 200 DMA conclusively Nifty fell 50 percent in 2008 that was the biggest bear market.

According to experts - We also had a trend where some of these high-flying midcaps fell quite a bit already before you saw the Nifty breaching 200 DMA. There was also a bit of a relief rally over the last 2 or 3 days.

Back in 2008, we had some of these stocks actually falling another 50-60 percent after the breach of 200 DMA on the Nifty. So that’s why that level is important.

Foreign funds sold shares worth 3.68 billion rupees on Wednesday, provisional exchange data shows. FIIs continue to be big buyers of Indian stocks in 2013, having bought over $10 billion. A sharp sell-off by FIIs can drag market to lower levels.

Slowdown in China and fall in commodity prices are among the major concerns for the Indian markets. The political uncertainty will continue to impact market moves and with talks of an early election on the cards, market may turn cautious in the near term. So now traders and investors need to remain cautious.

Now one can focus more on defensives and interest rate sensitive cyclicals

The INDIA VIX on NSE surged 6.5% and ended at 15.85 against previous close of 14.87.

FNO PCR is 0.90 against previous close 0.96.

Indian Rupee – Rupee seen major decline by 44 paisa and was trading at 54.87 against its previous close of 54.43.

S&P 500 (US) was trading at 1555.07 up 1.38 then its previous close at the time of writing M Bells.

=======================  NIFTY OUTLOOK  ========================

As informed during market hours, don’t try to swim against the flow, you may burn fingers. Stay away from market and wait for clear indication, which down now, just hope is 5545, if broken then next support seems around 5200-5250.

Intraday Resistance – 5703 – 5673 – 5624 and Support – 5545 – 5516 – 5466 (Pivot 5594)

Opening – Seems subdued and under pressure as market will see lake of participant, everybody will look for direction.

========================  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.)

Sterlite –

Shares of Sterlite Industries was down by 3% after the mining company declared inability to deliver copper from its smelter unit following the closure of the Tuticorin plant in Tamil Nadu last week after complaints of a gas leak, say reports.

Tata Motors –

Tata Motors edged higher by 0.4% after the company along with its partner, Diesel & Motor Engineering PLC announced the launch of Tata PRIMA range of trucks in Sri Lanka yesterday.

Dr. Reddy –

Shares of Dr. Reddy’s Labs surged by 3T to close at Rs1892 after the company announced the launch of Zoledronic Acid Injection in the US market. The injection is the generic version of Reclast, which got United States Food and Drug Administration, is a single use vial for intravenous infusion.

Coal India -

Shares of Dr. Reddy’s Labs surged by 3T to close at Rs1892 after the company announced the launch of Zoledronic Acid Injection in the US market. The injection is the generic version of Reclast, which got United States Food and Drug Administration, is a single use vial for intravenous infusion.

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

Bajaj Auto 1800CE @22 TG 32+ SL 15 (2 Lots)

(Booked loss of -1750)

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

(Start exiting from stock if Nifty goes below 5500 mark)

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

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

MG Blog Since Jan 13 (Total 50,300) + Apr 13 = +5900 – 1000 (Loss of HPCL) – 1750 (loss in Bajaj Call) = +3150

(Profit of Mahidra Satyam is not included here because it was in investment basket and call was active since Dec. 12, once can also compensate its profit with loss in On Mobile)

Billionaire Club Since Jan 13 (Total 1,09,350) + Apr= +5900 – 11600 (Loss in Idea Call, 2 lots) = -5700

(This is first time since Jan 13 when BC PL went in RED)

Today’s MG Mantra –

Stay away and see what song market is going to play then dance.

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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.