India Morning Report: Markets may have a great week from 6200 levels

Sesa Sterlite is the only bad news in the market despite what the SGX Nifty might have you believe. The silver linings playbook again plays out the unearned expectations market economy built into the logit mind of the Indian markets with enough logic to propose either candle to the trader at 9, now bothered no end by the SGX Nifty only on Monday. The rest of the week will see the good tick in Maruti with a flurry of small car launches to regain share in the local auto markets and concurrent good news for the industry too.

Japanese automobiles spurred by the Yen aside, Banks are ready to gloat on good results as the NPA circles are now wholly identified scab NPA marks admittedly on large parts of the sector but totally mapping out a clear sharper growth trajectory for the Private Banks and even the foreign owned banks ( there is one that is listed, however that may not get the benefit of the industry) Rupee will make another great turnabout from 62.5 levels back to even below 61 in inra day candles as FIIs return for earnings season

Lupin continues to shine and Infy has again reached the stratospheric levels from which it xan be a good short as cosmetic changes to the EC structure do not mean much for earnings prospects and the Sector remains on watch with the Rupee likely trying to make a big move up and not facing much resistance, Export Demand lull more a factor of Chinese and European dream fallout as both awaken to another despondent forecast in 2014 and TRade is unlikely to pick up till the second half of the year

The 6100 build up wll likely strengthen though with Calls written but the new OI may end up being a hedge. Markets will of course head south first and one should await the consolidation to finish before diving into the green (white) Candles. Shors should avoid sector s and focus on Tata Motors, Sesa Sterlite and even Infosys as cautionary wellness levels will be established (baselined) before discussing and mooving in on expectations from reslts and infact in the case of Infy perhaps the wait would last till the real results and 3400 /3450 levels cannot be ruled out for it in the run up

To underline stylised facts the markets are keeping (more like memes of a post crisis market) , apart from the big positives in Pharma ( incl. Sun Pharma), Banks would keep the positives for the day  and Monday reports that include India’s Services PMI may not contribute much to the market recovery but form a basis none the less

The IIP redesign around Capital Goods is long pending and probably another will be chalked up soon to get bigger weightage for Services. Meanwhile Capital Goods continue to account for an inordinate amount of the volatility despite a less than 10% weightage becaause of the size of the orders when they come, ensuring November was a really low score reported. TaMo’s 17% jump in US JLR sales similarily mean nothing to shorts on the stock. It is no time to measure and speculate on range Strangles esp short strangles so early in the series, but towards the end of the week you could probably sell in to harvest time decay.

Anyway, markets are not moving below 6200 significantly, Bharti ranges from 310 – 34 0 and so shorts on the stock may sustain existing shorts and build ups, ITC is ready to move up but will wait as profit taking is still suggested but will be brief given the cornering of the top prices in Thursday afternoon by a single operator (cartel)

Pre Open shows energy cos moving back up and note that a significant speculative interest has been started into the market with a build up in JP associates at its lowest levels for another attempt on Mount Everest by powered trading rooms

11am update: Unfortunately, markets have caught the correction inbetween and sitting on it, making this week at 6200 especially dicey till a south move is done into the market nomics. Also the move on Aurobindo is probably done. Any such new top off and profit taking now could trigger the move to 6000 levels. I am warning the watch tower only as there will be no editin of the report on Tuesday and maybe Wednesday before 11 am when I expect to be back , idling for this deed again.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s