Technical picks

Reliance had been consolidating lately
within a range of 2800-2950. However, it
surged in the Friday's session on the back
of increasing volumes. The higher band
of 2950 levels had been witnessing
increased selling pressure followed by
renewed buying interest at the bottom
levels of 2800. The leading indicator like
14-day RSI has given a strong buy signal
as it stabilized around the 60 levels of the
100 scale and cut the trigger line, indicating
significant surge from the current levels.
The stock is currently trading above all the
major moving averages and the 30-day
EMA is placed around 2800 levels which
should act as a strong support. This stock
is an excellent pick from the current levels.
All long positions in the stock should be
protected with a stop loss placed below
2750 levels on a closing basis for upside
targets of 3100 and 3200 levels.

Axis Bank had been consolidating lately
around its rock solid support zone of 900
levels. The stock had witnessed significant
rally in the penultimate month during
which it made an all time high of 1025
levels. However, profit booking forced the
stock to test lower levels of 900-950. The
stock has broken out above the
consolidation band and further decline in
the stock is largely ruled out. The 14-day
RSI is hovering around 65 levels and has
generated a strong buy signal from the
current levels. Immediate resistance is
placed at around the all time high levels.
A sustained close above that level will induce
fresh buying interest in the stock, which might
guide it to test further highs of 1100
and 1150 levels. The 50-day EMA level is placed
at around 900 levels which is unlikely to be
broken in the near-term.Investors are advised to
assume long positions in the stock in the range
of 950-1000 levels for a medium-term target
of 1100 and 1150 levels. All long positions in the
stock should be protected with a stop loss placed below
885 levels on a closing basis.

Pre Market Watch

Range-bound trading — The index exhibited range-bound trading in the 6111- 6060 band throughout the day’s trading session. On the upside, index faces resistance around yesterday’s high at 6111. Intra-day strength can be expected above the 6111 level and index could test 6185 levels on the upside. On the downside, intra-day support is around 6060, and a break below the 6060 level could see the index drift down intra day. Lower support levels are 6040-6000.

We once again caution investors not to get into low priced stocks or penny stocks with out fundamentals. Many stocks are witnessing explosive growth in the PE ratios and Q3 results have to justify the prices.

Varun Shipping(Rs.99.95) is in a no resistance zone. Watch for a 20-30% gain from these levels

Reliance Energy might get a boost from the SEBI's decision to clear Reliance Power's IPO. DLF is planning to hive off various businesses that will become separate companies in a measure that will increase the shareholder value. Indian market is likely trade down today though there will be trading oppurtunities in midcaps.

We have a Moderately Bullish view on Tata Steel . We recommend a Bull Call Spread strategy:
o Buy One Tata Steel Jan 920 CA @ 38 - 40
o Sell One Tata Steel Jan 960 CA @ 28 - 30
o BEP: 930
o Tgt: 960
o Investment: Rs.85,000 (Approx)
o Time Frame: 6-8 Days

Watch : Ioc,Cairn,Indiainfo,Indiabull,Cinemax buy in dips only.

Stocks in News:

SEBI clears decks for Reliance Power IPO by disposing complaints against the offer and asking promoters to lock-in entire 20% of their contribution for five years.

DLF plans to raise US$5bn over the next three years by listing five of its business units.

NTPC has signed agreements for loan and bond subscription worth Rs20bn LIC.

L&T plans to invest Rs25bn in building shipyard and expanding its engineering manufacturing unit.

GMR Infrastructure is considering listing GMR Energy on domestic bourses to fund its upcoming projects.

Unitech is close to announcing two joint development deals in Hyderabad and Chennai.

Reliance Communication slaps legal notice to DoT asking to freeze allocation of additional spectrum to existing GSM players.

ONGC Videsh strikes crude in Arabian Gulf Block off Qatar.

BOI gets board approval to raise Rs15bn via QIP. The floor price has been fixed at Rs359 per share.

GSPL and a subsidiary of Gujarat State Petroleum Corporation plans to invest Rs25bn on new pipelines.

Dabur India to foray into milk-based beverage segment.

Yamaha is likely to team up with Bajaj to create a common engine platform for high-end bikes.

L&T to hive-off concrete business into separate entity.

BoB raises Rs5bn through issue of bonds.

Bhushan Steel in technical assistance JV with Sumitomo Metal for the Orissa plant.

GSK Pharma to launch two vaccines in India.

Canara Bank ups its open offer price for Can Fin Homes to Rs78 per share from Rs63.

Wipro Consumer Care to provide lighting solutions for retail industry in India.

Infosys plans to offer wealth management solution in the domestic market.

JSW Steel and Essar Steel to set-up retail outlets for showcasing products.

Combined output growth of six key infrastructure industries was lower at 4.5% in October Vs 9.9% last year.

The Government is likely to scrap service tax on business and first-class air tickets for international journeys. It is also likely to halve duty on ATF from 10% to 5%.

The Railway Budget is likely to bring down freight on key commodities including steel, cement and petroleum products by 5%.

Mobile companies may have to shell out a higher percentage of their annual revenues as spectrum charges.

Leading tea players have hiked prices and the remaining companies are expected to follow suit.

Trai has asked I&B ministry to specify the date on which the CAS would become mandatory in 55 of the country’s top cities.

Have a great trading day