Mktviews Weekly Techno-Funda Analysis (12/11/2012 - 16/11/2012)

Markets are crucially poised after closing with a nominal loss on a weekly basis as it witnessed selling pressure on all rises on A/c of disappointing SBI results, pressure on rupee, fiscal cliff worries arising from US as well as Eurozone growth concerns resurfacing once again. 

Key benchmark indices Nifty & Sensex have displayed resilience vis-a-vis Global Markets as they ended with nominal loss of 0.3% respectively while BSE small-cap & mid-cap index under performed by declining 0.75%. 

Sector-wise Realty & FMCG registered gains of 4.8% & 1.9% respectively and have outperformed the markets followed by Pharma, Auto & Banking which just managed to barely close in positive as they gained by 0.2-0.5%. 

Once again Capital Goods sector witnessed highest cut to the tune of 2.2% as profit booking was witnessed in LT, Bhel and other infrastructure companies. Oil & gas as well as Metal Sector too witnessed 2% cuts each on account of poor quarterly results announced by ONGC, Hindalco & Tata Steel. 

Even IT Sector fell by 1% despite Rupee weakening upto 54.8 levels. 

Q2 Corporate results announced so far has been on a mixed note. The main worrying factor is the increase in NPA woes amongst PSU Banking space. It poses a serious question mark over the credit quality of the assets held by PSU Banks. 

Though SBI have reported a rise of 30% in Net Profit for Quarter ended September 2012 on a/c of lower provisions for bad loans & treasure gains, it has been an overall disappointment with issues of lower margin & deteriorating asset quality worries weighing higher with NPA's rising to 5.15% from 4.99% a quarter earlier. 

The Cabinet Committee for Economic Affairs (CCEA) has approved proposals of divestment of 10% equity in Hindustan Aeronautics Limited (HAL) out of 100% Government holding through IPO in domestic market. 

This disinvestment is likely to take place in the next fiscal year & hence may not be accounted in the present budgeted disinvestment target of Rs 30000 Cr. 

So far, CCEA has approved sale of shares in Hindustan Copper, Sail, Bhel, Oil India Ltd, MMTC, Nalco, RINL & NMDC for disinvestment purpose, but none of the share sale has been able to go through. 

Even 12.5% stake sale in Nalco which was scheduled in the coming month has been deferred by the Government. 

Thus, it would be very crucial to see, despite these deferrals, How would the Government mop-up Rs 12000-13000 Cr which it targets till December End. 

On the macro front, IIP data would be announced on Monday, 12 November 2012 for the month of September 2012. 

Also on Wednesday, WPI Inflation data for the month of October 2012 would be unveiled. 

For the month of August 2012, IIP data had grown by 2.7%. 

WPI Inflation had shot upto 7.81% in September 2012 to a 10-Month high on account of the steep diesel price hike. 

Global risk-off sentiment has led Rupee to weaken & close at its 2 month lows of 54.79 which inturn has been sentimentally negative for the Equity Markets. 

The fall in Rupee was also partially due to RBI Governer's remark that RBI would not support the Rupee by selling US Dollars in open market & it rather prefers to leave the Rupee to float free on its own strength. 

Globally, 

US Markets remained volatile with a negative bias. Even though uncertainty of US Presidential election has ended with Barack Obama being re-elected as President for 2nd term, the solution to the lingering concerns over the fiscal cliff issues & probable tax increase as a result of that weighed on the US & all other Global Markets. 

Also, Concerns over Eurozone Growth worries have resurfaced again with Mario Draghi stating that Eurozone Economy would remain weak in the near term. 

Also European Commission has stated that Eurozone economy would virtually grind to a halt next year on A/c of debt crisis & 17 Nation Euro Economy would expand 0.1% in 2013 down from its May forecast of 1% & also cut forecast for Germany, Europe's largest economy to 0.8% from 1.7% estimated earlier. 

Last Week, as advised, Failure to cross the critical resistance level of 22350 by HangSeng led to a profit booking exactly upto 21300 levels. Also Dow Jones violated its crucial support level of 13020 & closed around 12815 levels post falling exactly upto our given level of 12,736 (Low 12,743). 

Going Forward, 

Dow Jones post a sell-off last week faces critical resistance around 12996-13020. Till it does not cross 13020, it could face selling pressure on every rise & could possibly revisit 12,300-12,400 support zone. 

Major Asian Index Hang Seng trading near 21,380 has given a downward break-down in daily charts with all technical indicators RSI, Stochastics & MACD signalling a negative cross-over. Small support lies around 21,260 levels, violation of it would mean more pain in the short-term upto 20727/20415. Only if support 21,260 is held, small pullback upto 21500/21720 could be witnessed.  

FII's were net buyers in the Cash Segment but were net sellers in Derivatives Segment while DII's on the other hand were net sellers for the third consecutive week. 

FII Weekly Cumulative Derivatives Stats : 

Index Futures : -1071 Cr; 

Index Options : -1145 Cr; 

Stock Futures : -745 Cr; 

Stock Options : -325 Cr; 

Cash Segment : 

FII : +1333 Cr; 

DII : -831  Cr. 

On the Derivatives Front, 

Nifty PCR OI has decreased from 1.09 to 1.06 levels with significant additions witnessed in 5800-6000 Calls as well as 5600-5800 Puts with highest OI recorded in 5800 Calls as well as 5600 Puts suggesting a near term trading range of 5646-5812. 

Indian Indices have been resilient so far as they have managed to escape with a cut of 0.2% when Global Markets have witnessed cuts anywhere between 3-4%. 

Technically, Markets have formed a Doji-Star like pattern on weekly charts displaying indecisiveness amongst the market participants. 

Nifty Futures traded in a narrow trading range of 2% i.e 5702-5818 for the entire week with a zig-zag movement.

Even on Daily Charts, Momentum Oscillators RSI & Stochastics have signalled a negative crossover while MACD is on the verge of signalling a negative crossover, which could be confirmed on a breakdown below 5646 with volumes.  

Though Nifty Futures have taken multiple supports around 5720-5730 area, it is witnessing selling pressure on all rises & every upmove has been embraced by strong supply from higher levels indicating the inability to sustain at higher levels. 

What has happened till now was consolidation at higher levels with a negative bias but a breach of 5646 would accelerate the downward momentum leading to lower levels upto 5568/5510. 

Nifty Futures would face critical resistance @ 5796-5812 zone. Only a cross-over above 5812 with strong volumes would enable a pullback upto 5910/5970 zone. 

Probable Trading Range for the coming week : 5646-5812 

A Special Mahurat Trading Session will be held on Tuesday, 13 November 2012 from 3.45 PM to 4.30 PM to mark the beginning of the new Samvat 2069. The Market will remain closed on Wednesday, 14 November 2012 on account of Diwali. 

  Wish You and Your Family a Very Happy, Prosperous & a Profitable New Year Ahead. 

Regards,
Team Market View Investments. 
Mo : 9987750901. 
Visit www.mktviews-nifty50.blogspot.com
Facebook : www.facebook.com/mktviews. 

Never Forget : There are no Speed Limits on the Road to Excellence !!!

Caveat :
Investing in Stock markets carries high risk and hence Professional should be consulted before taking any investment decision / call. The inputs presented here are for information purpose and are not buy or sell recommendations to any individual or to any groups. 

Disclaimer : As equity traders/Advisors We, our relatives and friends may have position in the stocks suggested by us. We are individuals and dont belong to any brokerage house or company. All Recommendations are based on technical and/or fundamental analysis and/or Personal observations. Trading in stock markets involves risk . We give Recommendations, opinions or suggestions with the understanding that readers acting on this information take in to account all risks involved with market. Acting on the basis of views expressed here is the sole responsibility of the reader. No responsibility will be assumed by the authors for the consequences what so ever, resulting out of acting on these recommendations. The information herein, together with all estimates and forecasts, can change with/without notice depending on the Market Conditions.

Mktviews Weekly Techno-Funda Analysis (05/11/2012 - 09/11/2012)

Markets have closed with nominal gains on a weekly basis on account of Short-Covering & selective buying at lower levels despite getting pegged back in initial first half of the week due to RBI holding key interest rates steady as against an expectation of a rate cut.

Key benchmark indices Nifty & Sensex have ended the week advancing by 0.7% while BSE small-cap & mid-cap index under performed by rising only 0.3%.

Sector-wise Auto amassed highest gains to the tune of 3.9% on account of their higher monthly sales volume while Pharma & IT advanced with 2-3% gains on A/c of Rupee depreciating to 54 levels once again.
Capital Goods sector witnessed highest cut to the tune of 1.9% followed by FMCG & Banking which declined by 0.5-0.7% each.

RBI in its Q2FY13 Monetary Policy review reduced the CRR by token 25 bps from 4.5% to 4.25% while keeping Repo & Reverse Repo unchanged. Lowering CRR would infuse Rs 17000 Cr into the Financial System.
Meanwhile, RBI has raised the provisioning requirements for restructured loans to 2.75% from 2% earlier which may impact the profitability of banks in short term but would lead to improvement of Balance Sheet's health over the longer time frame.
By holding key interest rates steady, RBI has re-iterated that managing inflation remains its top most priority while raising concerns over growth trajectory.

Finance Minister P Chidambaram unveiled a 5-year roadmap for fiscal consolidation to promote investments, control rising inflation & put India back on the growth path. He also revised the budget deficit target for FY13 to 5.3% of GDP as against the budgeted target of 5.1% of GDP.
Some important measures announced by the Finance Minister include a transition to GST, quick review of DTC before its introduction & passing in the Parliament, meeting its budgeted disinvestment target of Rs 30,000 Cr for the fiscal & raising Rs 40,000 crore from sale of spectrum.
Finance Minister also emphasized that the Government is determined to address the twin challenges of Current Account deficit & fiscal deficit.

Rupee has once again weakened upto 54 levels following volatility in Global markets as well as owing to RBI holding key interest rates steady. If rupee continues its weakness & breaches 54.45 levels, it could slide all the way back upto 56 zone. Else would be range bound between 52.85-54.45 zone.

Globally,
US markets were shut on Monday & Tuesday as the super storm Sandy hit through North Eastern USA.
US markets gained momentum on Thursday on A/c of bullish consumer confidence & encouraging employment data but got pegged back on Friday's session due to uncertainty ahead of the US Presidential Elections.
Investors will closely watch the US Presidential Election which is scheduled for Tuesday, 6 Nov 2012 that will decide the Global Market trend in Future.

Dow Jones trading around 13090 is very close to its crucial support zone of 13020-13030. If 13020 is held, can bounce back upto 13450-13500. If support 13020 is violated, trend would turn negative for short term & retest of 12736-12550 would be imminent.

Major Asian Index Hang Seng trading near 22100 has key resistance at 22350.
Above 22350, can give an upmove upto 23700/24000 levels.
Technical Indicators RSI & MACD are approaching overbought zone & hence If 22350 does not cross, can lead to profit booking upto 21,300 levels.


FII's were net buyers in the Cash as well as Derivatives Segment while DII's on the other hand were net sellers for the second consecutive week.

FII Weekly Cumulative Derivatives Stats :
Index Futures : +111 Cr;
Index Options : +4109 Cr;
Stock Futures : +426 Cr;
Stock Options : -192 Cr;

Cash Segment :
FII : +697 Cr;
DII : -631 Cr.


On the Derivatives Front,
Nifty PCR OI has increased from 1.07 to 1.09 levels with significant additions witnessed in 5700-6000 Calls as well as 5500-5700 Puts with highest OI recorded in 5900 Calls as well as 5600 Puts suggesting a near term trading range of 5610-5832.

Technically,
Nifty Futures have strong support at 5610-5620 area which coincides with the 38.2% Fibonacci Retracement level of the entire upmove from 5240 to 5840 & Index have taken multiple support from this zone & bounced back to 5720 zone.
Till 5610 holds, it can once again move upto 5830-5842 levels.
Only on decisive cross over of 5842 with volumes, this current uptrend could get more momentum & can go all the way upto 5900/5955 area.
If 5842 is not crossed, we expect Nifty Futures to oscillate between 5610-5842 range.
But a breach of the support 5610 could lead the index to drift to lower levels of 5530/5470.




Regards,
Team Market View Investments.
Mo : 9987750901.
Visit : www.mktviews-nifty50.blogspot.com
Facebook : www.facebook.com/mktviews.

Never Forget : There are no Speed Limits on the Road to Excellence !!!

Caveat :
Investing in Stock markets carries high risk and hence Professional should be consulted before taking any investment decision / call. The inputs presented here are for information purpose and are not buy or sell recommendations to any individual or to any groups.

Disclaimer : As equity traders/Advisors We, our relatives and friends may have position in the stocks suggested by us. We are individuals and dont belong to any brokerage house or company. All Recommendations are based on technical and/or fundamental analysis and/or Personal observations. Trading in stock markets involves risk . We give Recommendations, opinions or suggestions with the understanding that readers acting on this information take in to account all risks involved with market. Acting on the basis of views expressed here is the sole responsibility of the reader. No responsibility will be assumed by the authors for the consequences what so ever, resulting out of acting on these recommendations. The information herein, together with all estimates and forecasts, can change with/without notice depending on the Market Conditions.