OIL SHOCK

The oil price could spike to $150 per barrel briefly if the conflict in Iraq hits operations in the country’s major southern oil fields, Société Générale (SocGen) has warned.

A report by the bank noted that this kind of supply shock could affect up to 2.6 million barrels per day of Iraqi oil exports, CNBC reported.

A disruption of this scale could then spark a co-ordinated release of strategic oil reserves by member states of the International Energy Agency, although SocGen acknowledged this was an unlikely event. Meanwhile, Saudi Arabia could also put more oil onto the market to mitigate the impact on the global economy.

‘In this extreme case, however, the spike would not last very long, probably not more than one quarter, probably less,’ said Michael Wittner, global head of oil research at SocGen.

A more likely scenario in his view would be what the report described as an ‘extended de facto sectarian civil war’ in Iraq lasting one to two years, which would lead to less extreme supply disruptions of up to 500,000 barrels per day.

TRADING IDEAS FOR 30-6-14

Above 41 level………….No worry for Bulls @ all.

We see Sharp Rally upto 42.75——————-43.30 level very soon.

Risk Takers :Buy 45 Call & Buy 36 call…….Hold this position upto 10th July !!

Once crosses 98.60 level with volumes ……………………??

We see Rally upto 101—103 level in hrs only.

Above 103…………Nonstop Blast upto 108 not ruled out.

Two hurdles :100—————–101.25 level.

Once Crosses 101.25 with volumes and sustains…………….??

Target :105–106.25 in hrs only.

Yes ,For Quick Gains u can Catch these two stocks !!

Once Breaks 1394 ,Last Support at 1387

Below 1387 if sustains for 15 minutes ,Watch NONSTOP PANIC upto 1364—————-1357 level in hrs only.

Below 1421 ,Bears will have upperhand.

Dead Cat Bounce ………..can happen in PSU Bank Stocks (But 99% of stocks are Looking very weak )

Yes ,Now IT +Pharma moving up -So Bank ,Big Stocks are Down (Everything is  Orchestrated -But u will not be able to see if u just look at Trading screen)

NIFTY FUTURES 30-6-14

Today ,Watch 7559 as First Hurdle for Traders.

Now Crossover with volumes and sustains for 15-20 minutes will take to 7583—7591 level.

Next Target :7616–7624 in hrs only.

Support @ 7524 level.Break with volumes ,Next Support at 7504 level !

GOLD DUTY CUT LIKELY

The government is likely to reduce the import duty on gold and ease restrictions on the gems and jewellery sector in the budget on July 10.

There are indications that the budget can announce a marginal cut in duties to prevent a sudden surge in imports. Gold duty has been raised to 10 per cent from 4 per cent.

The government is also keeping a close eye on the developments in Iraq. A senior finance ministry official said the rise in global crude oil prices following the unrest in Iraq was unlikely to stall the move to cut duties.

“There have been discussions on Iraq and the spike in crude price. The current account deficit (CAD) will be very much in control this fiscal,” the official said, indicating the assessment of the government on the current geopolitical situation and its impact on the economy.

If the unrest in Iraq escalates, it can push up crude oil prices, resulting in higher diesel and fuel rates.

Besides, the high oil import bill will result in dollar outflows and hurt the rupee’s value and the current account deficit (CAD).

According to some estimates, even if the crude prices move up to $120-$125 (the worst-case scenario), CAD will still be below 3 per cent of GDP (gross domestic product) in 2014-15.

CAD had dropped sharply to 1.7 per cent of GDP, or $32.4 billion, in 2013-14, on the back of plunging gold imports.

Analysts said the below-normal monsoon could also weaken demand as much of the yellow metal is purchased by farmers.

“If crop production is lower because of poor monsoon, it will mean less money for farmers to put towards gold purchases. Already the demand is subdued because of high duties. There are hopes that the government may relax those duties, but if the farmer income falls because of a poor harvest, it is possible gold demand may not get much of a bounce,” analysts said.

“Going forward, we expect some widening of trade deficit on the back of gold demand picking up on expectation of a reduction in import duties. However, the extent of trade gap is unlikely to be worrisome as we expect exports to maintain good performance,” Yes Bank chief economist Shubhada Rao said.

Gems and jewellery

The government is also set to ease the 80:20 scheme for the gems and jewellery sector. Under the scheme, nominated agencies are allowed to import gold on the condition that 20 per cent of the inward shipment will be exported.

Gems and jewellery exports account for about 15 per cent of India’s total outbound shipments and exporters have been urging the government to lift the import curbs.

Vipul Shah, chairman of the Gems and Jewellery Export Promotion Council, said, “The 10 per cent duty makes the operations of smuggling economically viable. Also, it is an appropriate time to scrap the 80:20 scheme as the CAD is under control.”

TAX BREAK FOR POWER FIRMS

In what could benefit power projects with a combined generation capacity of 20,000 MW and some transmission projects, all of which are set to be commissioned in the current fiscal, the government is likely to give them the much sought-after Section 80-IA tax holiday in the coming Budget.

If finance minister Arun Jaitley reopens the Section 80-IA window, shut on March 31, 2014, for these projects, the companies will be able to claim deduction up to 100% on the profits from eligible projects for a period of any 10 consecutive years, in a block of 15 years, starting this year. Practically, this means the companies will pay only the 18.5% minimum alternate tax (MAT) on book profits, instead of corporate tax, as 100% deduction would bring the effective corporation tax to a level lower than MAT in almost all cases. The rule is that if the corporate tax incidence falls below MAT, the latter will apply.

Corporate tax for domestic companies, inclusive of the applicable, ranges from 30.9% to 33.99% depending on income slabs. (MAT, inclusive of the surcharge, ranges from 19.06% to 20.96%.)

The extension of the Section 80-IA benefit for units coming up this fiscal — later the benefit may be extended to the units coming up in 2016-17, the terminal year of the current five-year Plan — is in keeping with the Narendra Modi government’s policy of giving emphasis to the infrastructure sector.

A large number of power and other infrastructure projects are currently enjoying the Section 80-IA benefit as they had commenced commercial operations by the end of last fiscal. Giving the tax holiday option to a new set of about-to-be-commissioned projects would ensure these projects, many of which had faced delays due to lack of fuel linkages and other statutory clearances, are provided a level playing field and the fast pace of capacity addition over the last couple of years is sustained.

The biggest beneficiary will be state-owned NTPC, which is expected to commission over 2,000 MW of capacity in the current fiscal. The move would also benefit projects of Sterlite, Indiabulls, Jindal Power, GVK Power, Essar Power, Bajaj Hindustan, Vandana Vidyut, Haldia Energy, Torrent Power and Hinduja national Power. Reliance Power’s Sasan UMPP will also benefit.

According to official sources, while the coming Budget is likely to extend the Section 80-IA benefit to power plants getting commissioned in current fiscal, a decision to extend the incentive scheme may be announced later. The power ministry wants the benefit for all power projects getting commissioned in the 12th Plan. The industry, of course, wants the incentive to continue for all projects getting commissioned, even in the 13th Plan period.

Analysts point out that another extension of Section 80-IA is not in line with the tax policy intent of doing away with profit-linked deductions and only retaining the investment-linked ones.

“This would be a good move but we want the benefits to extend for all power projects getting commissioned till the end of the 13th Plan. To achieve the government’s stated objective of giving 24×7 power to all, we need to double our current generating capacity by 2022. This would require both (Section) 80-IA and ‘mega power’ benefits are restored’, Ashok Khurana, director-general, Association of Power Producers, told FE.

The government targets to add 88,000 MW of fresh generation capacity in the 12th Plan. Tax holiday could act as a catalyst in attracting the much-needed investment in the sector, analysts said.

P- NOTES INVESTMENTS AT ALL TIME HIGH

Investments into Indian shares through participatory notes (P-Notes), a preferred route for overseas HNIs and hedge funds, surged to the highest level in six years at Rs 2.12 lakh crore (over USD 35 billion) in May.

According to the data released by the Securities and Exchange Board of India (Sebi), the total value of P-Note investments in Indian markets (equity, debt and derivatives) rose to Rs 2,11,740 crore at the end of May from Rs 1,87,486 crore in the preceding month.

It was the highest since May 2008, when the cumulative value of such investments stood at Rs 2,34,933 crore. P-Notes, mostly used by overseas HNIs (High Networth Individuals), hedge funds and other foreign institutions, allow them to invest in Indian markets through registered

Foreign Institutional Investors (FIIs), while saving on time and costs associated with direct registrations.

According to market analysts, investment into the equity market via P-Notes had been rising in the past few months mainly on hopes of a stable, business-friendly government. It shot up in May, post the general election results, primarily on the new government’s promise to revive economic growth.

P-Note investments in Indian markets climbed from Rs 1.63 lakh crore in January to Rs 2.12 lakh crore in May. Besides, the value of P-Notes issued with derivatives as underlying, stood at Rs 1.45 lakh crore as on May 31, 2014.

The quantum of FII investments through P-Notes grew to 12 per cent in May from 11.7 per cent in the previous month.

Till a few years ago, P-Notes used to account for more than 50 per cent of the total FII investments, but their share has fallen after Sebi tightened the disclosure norms and other regulations for such investments.

P-Notes have been accounting for mostly 15-20 per cent of the total FII holdings in India since 2009, while it used to be much higher – in the range of 25-40 per cent – in 2008. It was as high as over 50 per cent at the peak of Indian stock market bull run during a few months in 2007.

FIIs, the key drivers of Indian markets, pumped in over Rs 14,000 crore in the Indian stock market in May.

SGX NIFTY

crucial  Support for Traders @ 7487 level.Break with volumes and stays below will take to 

7465—————–7456 level in panic.

Major Support @ 7433 level.(Last Hope )

Watch 7551———-7559 as Hurdles for Tomorrow’s Trading.

Crossover with volumes and stays above will take to 7583—7591 level in hrs only.

It looks no need to panic @ lower levels 

RED FLAG FOR RELIANCE POWER

Reliance Power’s plans to rope in a consortium of 21 banks for assigning the mining leases of Moher and Moher Amlori Extension coal blocks in Madhya Pradesh may hit a roadblock as the coal ministry has asked the finance ministry to opine whether the company can be allowed to do so under the existing rules.

The situation is sort of unprecedented for the sector as no company has sought such an approval so far.

The Shivraj Singh Chouhan government in Madhya Pradesh had written to the Union government in March to allow mortgaging of the blocks linked to R-Power’s 3,960 Ultra Mega Power Project at Sasan in favour of its lenders which include banks from the United States, China and Singapore.

R-Power has sought to assign the mining leases to the consortium by invoking Rule 37 of Mineral Concession Rules (MCR), 1960 which the coal ministry says specifies that the lessee of a coal block “shall not, without the consent of the state government and previous consent of the central government assign, sublet, mortgage, or in any other manner, transfer the mining lease, or any right, title or interest therein.”

When contacted, Reliance Power spokesperson said, “It’s a standard condition of compliance by all the lenders.”

Simultaneously, the rules also mention that where the “mortgagee is an institution, a bank or a corporation as specified in Schedule V, it is not mandatory for the lessee to obtain any such consent,” the coal ministry has told the department of financial services (DFS) of the finance ministry in a letter on June 10.

It is this ambiguity in the MCR which has compelled the coal ministry to seek the finance ministry’s views. “The DFS is requested to furnish their comments on the references of the Madhya Pradesh government specifically with regard to the inclusion of banks/financial institutions involved in the proposal which are not part of Schedule V of MCR…” the coal ministry told the DFS in its letter.

Mortgaging of assets is, however, allowed in other sectors like telecom. The Reserve Bank of India has recently permitted banks to take spectrum as mortgage. Similar rules are now expected to be written in for other sectors where there is a deployment of natural resources.

The Sasan project achieved financial closure in 2009. The lending by the consortium of banks was done on a project finance basis and with an estimated project cost of around Rs 20,000 crore with a 75:25 debt-equity ratio.

The company is slated to produce around 20 million tonne coal annually from Moher and Moher Amlori coal mines to run its Sasan plant.

CAG to DoT :Take back RJio’s broadband spectrum

The Comptroller and Auditor General of India (CAG) has rejected the telecom department’s stand allowing Reliance Jio to offer voice services using broadband spectrum.

The CAG, in its draft report, has said that had the Department of Telecommunications (DoT) made it clear that voice service was permitted, there would have been more demand for spectrum during the auctions held in 2010. Broadband spectrum had been sold at a fraction of the price of 3G spectrum. According to Government sources, the CAG has not accepted the DoT’s version that no favour was shown to any specific player.

Undue favour?

The auditor said that going by the value telcos paid for spectrum between 2012 and 2014, RJio appeared to have been accorded undue advantage of ₹22,842 crore.

The main issue is a policy that permitted Internet service providers (ISP) with broadband spectrum to start offering voice telephony services by paying an additional ₹1,658 crore.

According to the CAG, the policy may have resulted in a loss to the exchequer. However, the DoT had replied that the CAG’s view was untenable and based on a hypothetical position.

It has also questioned the CAG’s powers to raise policy issues, which it says are not related to the audit.

According to the Department, the fee of ₹1,658 crore collected from Reliance Jio was not for broadband spectrum but only an entry fee to migrate to a unified licence regime.

The DoT had said the contention in the audit report that the entry fee of ₹1,658 crore discovered in 2001 should not be applicable in 2013, was not correct.

RJio’s migration

Reliance Jio, a subsidiary of the Mukesh Ambani-led Reliance Industries, acquired Infotel Broadband Services in June 2010, soon after the firm won nationwide broadband spectrum, spending nearly ₹13,000 crore. Infotel had acquired an ISP licence, under which voice telephony is not permitted.

In 2013, the DoT announced the new unified licence regime under which all types of telecom services are allowed.

As part of this new licensing, the Department announced a migration path for existing players with older licences.

While those with a unified access service licence were permitted to migrate to the new regime without any additional cost, those with plain ISP licences (without spectrum) were asked to pay ₹15 crore as entry fee. But ISPs with broadband spectrum were told to pay ₹1,658 crore as an entry fee.

The CAG said it was surprising that the Government did not satisfy itself as to how Infotel Broadband, a company with a networth of ₹2.5 crore, would be able to pay the bid amount of ₹12,847 crore.

The auditor said eligibility conditions for the auction were not stringent enough to keep out “front companies”.

It said that though Reliance acquired Infotel Broadband on June 11, 2010, a few hours after the close of the auction, the Government did not raise a red flag on possible violation of confidentiality conditions by Infotel.

“The Government should get the matter investigated even at this juncture, fix responsibilities on the bidders, which violated the auction rules and cancel allotment of the broadband spectrum,” the CAG concluded in its report.

TO TRADE OR NOT TO TRADE

In trading activity alone does not make money, the right activity at the right time is what makes money. Many times the right thing, is to do nothing.

In your actual trading you have to do four things very well to make money.

You have to know when to get in.

Only enter trades that have the highest probability of success and the best risk/reward ratio. Buy the best monster stocks during up trends. Short the fallen leaders when the game changes and they are under the 50 day. Buy the monster stocks at the gift of the 200 day moving average. Short down trending junk stocks. Go where the trends are.

You have to know when to get out.

When your trade reverses through a key support get out. When the market trend changes get out of your long positions. When your stop loss is hit, get out. When the stock reverses and hits your trailing stop, get out.

You have to know when to stay in.

If you enter a stock with the potential to trend let it run as far as it will go. Do not set a target, just trail your winner with a stop. Let the stock tell you when it is done running. Do not cut your winners short. 

And most importantly you have to know when to stay out.

If you do not know what to do, do nothing. If the charts confuse you, stay out. If the volatility is escalating and you are losing in every trade, stay out. If you are a trend trader and you see no potential trends, stay out. If you want to go long but all the stocks you want are going down, stay out.

NIFTY FUTURES

Last Close :7525

Yes ,No need to change level @ all.

Traders ,Just watch 7503 level.

Once Breaks with volumes and sustains for 15-20 minutes ,Intraday PANIC upto 7469-7438 is possible.

Yes ,once breaks 7503 with volumes !!

Suppose ,Today not breaks low of Friday ( 7511 ) ………………Then ??

Hurdle at 7549—-7559 level.

Crossover above 7559 level with volumes and should sustain for 15-20 minutes will take to 7596 level in hrs only.

Short Term Technically Looking Weak (One sharp panic is must ? )

All Indicators favouring Bears at this Moment (But Yes Manipulation in 1-2 stocks can change sentiment )

Today’s First Half low very crucial and Reversal is possible ?

BANK NIFTY

LAST CLOSE :15054

101% Crucial Support at 15020

No need to change levels everyday ,Yes Break below 15020 with volumes and sustains for 15-20 minutes then ?

 Panic upto 14911———14875 is possible.

Hurdles at 15112—-15143 level.Now Crossover above 15143 with volumes will create short covering rally !

MARKETS FOR 23-6-2014

Nifty (7511) we said ‘technically 7500 is still a make or break well’ the market traded sluggish and closed in the red just above our crucial Make or break level of 7500…we are now into F&O expiry, the structure near the highs is a bit negative and the setup in the making until Friday is typical water fall pattern and now if it breaches 7500 then we could have a big down move even until perhaps 7250 or lower…the question is will it…only a move above 7660 is positive

The support for Nifty is it 7500-7250 and the resistance to the up move at 7660-7877      

EFFECT OF BRENT CRUDE ON INDIIA

-Above is Weekly CHART of BRENT CRUDE

-Above $ 114.64 level if stays………………We see Rally upto $ 117.34-118.23 level very soon.

Just see Small Triangle Breakout :Height of Triangle $ 10.04

110+10 = $ 120 level on card ?

Weekly & Monthly Chart …………LOOKING REALLY FIERY

If above levels are on card ,Then 101% After Railway Freight Hike :Very soon sharp rise in Petrol & Diesel on card in India

It means Inflation to rise rise rise …………!!

THOUGHT FOR THE DAY

POSITIVES & NEGATIVES OF THE WEEK

Positives:

1. The Nasdaq and S&P 500 both made new 52-week highs.
2. AAII bullish sentiment weekly decline was the largest drop since January.
3. Homebuilder sentiment climbed from 45 to 49 vs 47 expected.
4. Philly Fed came in higher than expected for the 4th straight month.
5. Fed continues to taper $10B a month, market likes, S&P 500 closes at all-time highs.
6. Empire manufacturing index came in at its highest level since 2010
7. Industrial production grew by 0.6% m/o/m, better than expected, April #’s were revised up.
8. Initial jobless claims 4-week moving average moved down to 312k, continuing claims hit the lowest levels since ’07.

Negatives:

1. Crude oil closed at the highest price since last fall.
2. High yield spreads are at their lowest levels since 2007, something to keep an eye on.
3. Housing starts and building permits both came in lower than expected.
4. CPI came in higher than expected, 0.4% v 0.2% expected and +2.1% Y/O/Y (highest M/O/M increase in over 4 years).
5. Japanese exports fell 2.7% y/o/y vs estimates of a 1.3% decline.
6. UK home prices continue their vertical climb, rising 9.9% y/o/y, the most since ’10.

France Arbitrarily Decides To Become Largest Stakeholder In Alstom

We suspect this is not exactly the great news that GE was expecting… but it looks like a win. French minister Montebourg believes none of the current offers fulfill their demands and will use a decree to block the deal:

• *MONTEBOURG SAYS FRENCH STATE TO TAKE 20% STAKE IN ALSTOM
• *MONTEBOURG SAYS FRANCE WILL BUY ALSTOM STAKE OR BLOCK GE OFFER
• *MONTEBOURG SAYS FRANCE WILL USE DECREE IN ALSTOM CASE
• *MONTEBOURG SAYS FRANCE WILL ENTER IN ALLIANCE WITH GE
• *MONTEBOURG SAYS FRANCE SEEKING ALSTOM STAKE AT MARKET PRICE

So GE forced to partner with French or no deal. Nothing like partnering with the (almost) most socialist government on the planet to make money.

As Bloomberg reports,

 

 

The French state will enter an alliance with General Electric Co. and take a 20 percent stake in engineering company Alstom SA to support a takeover.

The deal will allow GE to buy Alstom’s gas turbine business and other energuy assets, French Economy Minister Arnaud Montebourg said in Paris today.

The move may end a takeover battle between GE and Siemens AG for Alstom’s energy assets. Both GE Chief Executive Officer Jeffrey Immelt and Siemens CEO Joe Kaeser met several times with French government officals who had been pressing for more guarantees on jobs and the country’s energy independence since GE unveiled its bid on April 30.

While the U.S. company seeks its biggest purchase yet to expand in Europe, Siemens wants to avoid its main competitor bulking up in its own backyard.

Bloomberg adds more from Montebourg’s press conference:

• *MONTEBOURG SAYS [GE/GOVT] ALLIANCE WILL FORM JVS IN STEAM, NUCLEAR, HYDRO
• *MONTEBOURG SAYS GE AND ALSTOM WILL ALSO FORM ALLIANCE IN GRID
• *MONTEBOURG SAYS GE WILL BUY ALSTOM’S GAS BUSINESS
• *FRANCE TO BUY TWO-THIRDS OF BOUYGUES’S ALSTOM STAKE: AFP
• *MONTEBOURG SAYS ALSTOM WILL BUY GE SIGNALING FOR EU1 BILLION
• *MONTEBOURG SAYS HE WROTE LETTER TO GE DETAILING FRENCH DEMANDS
• *MONTEBOURG SAYS SIEMENS BID WAS IMPEDED BY EU ANTITRUST RULES
• *MONTEBOURG SAYS EU COMMISSION IS MAIN OBSTACLE FOR EU CHAMPIONS

And from Reuters,

• FRANCE BELIEVES CURRENT OFFERS FOR ALSTOM DO NOT FULFIL ALL ITS DEMANDS
• FRENCH ECONOMY MINISTER MONTEBOURG SAYS FRANCE TO HOLD GOLDEN SHARE IN THE NUCLEAR 50:50 JOINT VENTURE

GE Stock is entirely unimpressed.

IMPORTANT LEVELS FOR 20-6-14

20-Jun-2014

PICK OF THE DAY	TARGET 1	TARGET 2	STOP LOSS
BUY PVR AT 678	705	720	670
FUTURES
SELL IOC FUT AT 335	327	321	338

TECHNICAL OUTLOOK

SCRIP	CLOSE	SUPPORT	RESISTANCE	OUTLOOK
NIFTY	7540.70	7475 7415 7365	7620 7670 7733	RESISTANCE AT 7620.
BANK NIFTY	15067.40	14880 14670 14380	15490 15752 16000	RESISTANCE AT 15490.
ITC	336.25	333 331 327	339 341 344	STRONG SUPPORT AT 331.
REL INFRA	735.55	733 708 688	748 763 785	RESISTANCE AT 748.
SESASTER	295.05	290 283 275	302 307 313	SUPPORT AT 283.
TCS	2276.05	2242 2205 2167	2308 2345 2380	RESISTANCE AT 2308.
SAIL	94.65	92 90 87	97 100 102	RESISTANCE AT 97.
SBI	2605.45	2570 2555< 2518	2640 2675 2700	RESISTANCE AT 2640.
DLF	207.10	203 199 193	212 218 225	RESISTANCE AT 212.
INFOSYS	3311.90	3275 3240 3205	3335 3375 3408	SUPPORT AT 3275.
TATA MOTORS	438.60	433 427 418	444 540 549	RESISTANCE AT 444.
BHEL	240.90	239 235 230	246 251 256	RESISTANCE AT 246.
TATA STEEL	519.45	515 500 487	528 541 552	RESISTANCE AT 528.
UNITECH	31.15	30 28 25	32 35 38	RESISTANCE AT 32.
ONGC	420.75	406 402 395	428 436 444	STORNG SUPPORT AT 402.
JP ASSOCIATE	72.75	71 68 64	75 78 81	RESISTANCE AT 75.
RELCAPITAL	616.35	611 599 586	628 640 649	RESISTANCE AT 640.
RELIANCE	1042.10	1025 1008 995	1055 1080 1105	RESISTANCE AT 1055.
HDIL	92.15	91 88 85	95 98 102	RESISTANCE AT 95.
MARUTI	2380.05	2365 2320 2285	2420 2475 2525	STRONG SUPPORT AT 2365.
HINDALCO	167.75	165 163 160	172 175 182	SUPPORT AT 165.
ACC	1455.05	1438 1405 1388	1491 1518 1561	RESISTANCE AT 1491.
LT	1656.70	1638 1599 1575	1698 1725 1748	RESISTANCE AT 1698.
LT	1322.55	137 134 132