TRADING STRATEGY :12 th October'07

Watch out for Steel Sector all going to Bombard


Weak opening but buying seen

Reliance AGM to bring good news for market

RIL to soon get formal nod for KG gas price:After a delay of over four months, Reliance Industries is set to receive the formal approval from the government for its KG Basin gas pricing formula. The approval, which will pave the way for gas deals with customers, comes almost a month after the empowered group of ministers’ (EGoM) decision to price the gas at $ 4.2 per mmbtu


Nifty opened on a flat note yesterday and witnessed high
volatility in the first half of the trading session. However Nifty,
bounced back in the later half of the session after taking support
twice at 5425 levels. The index has breached and closed above
5500 levels for the first time ever. The breadth of the market
remained positive at 629:491 indicating buying continued in
mid -cap and small -cap stock as well. Nifty October futures have
witnessed accumulation of long positions; October futures have
added 12 lakh shares in open interest along with significant
increase in premium from 7.30 points to 20.20 points. On the
options front, Nifty 5600 call option had seen long accumulation
while, 5400 put option had witnessed writing suggesting fu rther
upsides in the markets. The market is expected to open on a flat
to positive note today; traders are advised to trade long as long
as Nifty holds above 5480 levels for upsides of 5530 and 5580
levels. Alternatively, long positions can be assumed from lower
support of 5425 levels with a final stop loss placed at 5380
levels.


Option

We have a moderately bullish view on Tata Steel. We recommend Bull Call Spread strategy:
o Buy One Tata Steel Oct 860 CA @ 34-36
o Sell One Tata Steel Oct 900 CA @ 23-25
o BEP: 871
o Tgt: 900
o Investment: Rs.1,40,000 (Approx)
o Time Frame: 5-6 days
.


Power Grid Buy 112 for target 120-122 3-4 days

Salora International(Rs.190.00) is expected to come out with good numbers. Watch for good gains

Kouton's Retail will be listing today on the bourses. The IPO has been subscribed 45.21 times. Watch out for all the listed retail plays today. DLF Ltd on Thursday announced its plan to raise upto $1.5 billion loan from the overseas market for executing its business plan and to pick up stake in DLF Asset's proposed IPO in Singapore

Infra Stocks had a field day yesterday with IVRCL, Nagarjuna Construtions, Akruti Nirman along with the media stocks like Adlabs(one more ADAG group company),TV Today and TV18. After IFCI its the turn of TFCI(Tourism Finance Corporation) to go for a stake sale soon

HDFC Bank,Tata Metalliks,Geojit Securities,Omnitech Info will be declaring results today. Omnitech might be the dark horse here.

Indian Markets are likely to display huge volatility. We advice traders to stay away from the market. Might be stereo type but we have to accept the run is terrific. Investors hang to the market. Have a great day.

Trading guide for 11 October 07

WATCH Negative Divergence in RSI


Nifty continued the northward journey in yesterday’s trade too
as it opened on a strong note and registered yet another all time
high. However, the higher levels witnessed profit taking and
buying was w itnessed in the index heavy weights . The breadth
ended on a flat note at 577:565 implying mixed performances
across the board. Nifty Oct futures premium decreased
marginally to 7.30 points while the Nov futures has seen
addition of 2 lakh shares in open interest on the back of
decreasing cost of carry implying addition of speculative short
positions around the highs . On the options front put options
have seen long addition while calls have seen closure of short
positions suggesting caution around the highs . With Infosys
quarter results announcement pre-market; it is expected to have
a large bearing on the market direction. The markets are likely
to open on a positive note today; traders are advised to adopt
buy at dips strategy. Long positions may be assumed if Nifty
holds above 5500 levels. Else, trade in two ranges of 4360-
4440 and 4440-4500 levels .


We have a moderately bullish view on SBI. We recommend Bull Call Spread strategy:
o Buy One SBI Oct 1950 CA @ 78-80
o Sell One SBI Oct 2040 CA @ 58-60
o BEP: 1970
o Tgt: 2040
o Investment: Rs.1,00,000 (Approx)
o Time Frame: 5-6 days

JUST GRAB RAJESH EXPRTS AND PANTALOON

Hero Honda Looks good for 100 rs target upside

INFOSYS TECHNOLO will go down from these level (C-2125.05): Looking Strong: Buy around 2109.0 Target1-2158, Target2-2191:Support1-2076-Support2-2027

For 10 October 07

BSE Sensex (C-18280.24) Resistance 18645 19005
BSE Sensex Support 17965 17600 16925
Nifty Future (C-5336.50) Resistance 5460 5580
Nifty Future Support 5240 5120 4900

Opening is flat,to gap up,stay long abv 5250 sl 5240 tgt 5450-5555.sustain below 5250,sell with SL 5268 tgt 5100-4930.

Fight for Mkt Cap to continue................!!!!
Reliance :Above 2625 will zoom to kiss 2689 ,2715 ................(From yesterday close of Rs.2610....another jump of Rs.50-75 on card )
Rel.Capital :Will zooom to kiss 1812 ,1831 & there after unexpected allround buying will start.
R.Energy :Above 1537.......No problem for Bulls.Stock will zoom to kiss Rs.1575 ,1587 .(Stoploss Rs.1525)
R.COM :Will zooooom to kiss 716 ,720 ...once crosses 720 with volumes will kiss Rs.743 level !!!!!!!!!!

Long Purvankara at 501 ( Futures) ans see the magic no sl

Watch out for Tech Mahindra(Rs.1,318.05) before the results.

Technical picks on 9th October 07

Update on GMR Infrastructure
CMP: 160
GMR Infra lost 0.75 percent last week on
back of decreased volumes. The 14-day
RSI is indicating limited downsides in the
stock in the coming sessions. The
weakness in the broader index, if any, could
force the stock to test its initiation range
of 160-164 in the coming sessions. Any
movement to the lower levels of 160-164
should be taken as an opportunity to
assume long positions in the stock.
Immediate resistance is placed at around
185 levels. A sustained close above that
level will induce fresh buying interest in
the stock which could help the stock to
test all-time high levels of 201.80. The 8-
day EMA level is placed at around 173
levels while the 50-day EMA level is placed
at around 160 levels. Investors are advised
to remain invested in the stock for a short
term target of 200. All long positions in
the stock should be protected with a stop
loss placed below 152 levels on a closing
basis.



Update on Idea
CMP: 131.85
As expected, renewed buying interest was
observed in Idea. The stock rose by 7.50
percent on the back of increased volumes
on a weekly basis indicating further
strength to prevail. The 14-day RSI is
indicating the downsides to be limited in
event of any sell-off in the broader index.
Our initial target of 135 was met last week.
We continue to recommend buy in the stock with a price
target of 145 in a short term scenario. The 8-day EMA
level is placed at around 129 levels while the 50-day EMA
level is placed at around 123 levels. Strong support for the
stock is placed at around 123 levels which is unlikely to be
pierced in the coming sessions. Any movement close to
lower levels of 126-128 should be taken as an opportunity
to assume long positions in the stock. All long positions
in the stock should be protected with a stop loss placed
below 123 levels on a closing basis

F&O guidance for the day

OPTION
We have a cautiously bullish view on Infosys . We recommend Synthetic Collar strategy:
o Buy One Infosys Oct fut @ 1988-1992
o Sell Two Infosys Oct 2130 CA @ 43-45
o Buy One Infosys Oct 1980 PA @ 76-80
o BEP: 1980
o Tgt: 2150
o Investment: Rs.1,00,000 (Approx)
o Time Frame: 7-8 days

FUTURE
ACC Sell 1130-1140 1152 1075-1080 3-4 Days



1.) SAIL: SAIL have witnessed closure of long position in yesterday’s trade; the stock futures have shed 4.30% in
open interest along with decrease in cost of carry from 9.44% to 5.57%. Short position can be assumed in the stock
in the range of 195-198 with a stop loss placed at 200 levels.
2.) Tata Steel: Tata Steel 5 lakh shares in open interest and turned into discount of Rs.1.5 points indicating
unwinding of long positions. The stock has closed below 800 mark for first time in last five trading session. Short
position can be assumed in stock with a final stop placed at 810 for downsides of 770 and 745 levels.
3.) STER: Sterlite Industries has shed 3% on yesterday trade on account of closure of long position. The stock has
shed close to 4.48% in open interest along with significant fall in cost of carry from -5.63% to -19.46%. The
resistances for the stock are placed at 750 and 765 levels while supports are at 720 and 705 levels.
4.) Infosys: Infosys witnessed positive close in spite of sell pressure in the market. Infosys has seen slight closure
of short position before it announces it Q2 results on Thursday. Long position can assumed in the stock if sustains
above 2000 levels for upsides of 2025 and 2050 levels.
5.) Reliance: Reliance Oct futures have seen no significant change in open interest. The stock has good support at
2390 levels. Long position can be assumed in stock in region of 2400-2410 with a stop loss placed at 2390 for
upside of 2435 and 2450 levels.
6.) SBI: SBI has shed 3.73% in open interest on the back of shrinking cost of carry implying long closure. Short
positions may be taken in the stock with a stop loss placed above 1800 levels for targets of 1680-1700 levels.
7.) ICICI Bank: ICICI Bank had witnessed a sharp run up in the recent sessions following which it witnessed profit
booking at the similar pace. It shed a whooping 7.80% of open interest in just yesterday’s trade. Short positions may
be taken in the stock from slightly higher levels with a stop loss placed above 1065 levels for lower targets of 980-
1000 levels.
8.) DLF: DLF witnessed sharp declines in yesterday’s trade and has shed 13.46% in open interest. Short positions
may be assumed in the stock below 835 levels for immediate targets of 790-800 levels with a stop loss placed above
850 levels.
9.) Hindalco: The entire metal pack had been witnessing selling pressure. Hindalco has witnessed addition of short
positions indicated by the increasing open interest on the back of negative cost of carry. Short positions may be
taken in the stock from 164-166 levels with a stop loss placed above 168 levels for downsides of 155-158 levels.
10.) M&M: M&M had witnessed closure of positions as it shed 4.27% in open interest. Short positions may be
assumed in the range of 730-735 levels for downside targets of 695-700 levels. The same shall be protected with a
stop loss placed above 750 levels.



Market View:
Nifty opened on a positive note yesterday following the strong
global cues . However, the index pared all its gains as it
witnessed immense selling pressure. The last hour saw some
amount of recovery but failed to sustain the 5100 mark and
closed below it. Selling pressure was seen across the board
indicated by weak market breadth at 134:1015. Nifty Nov
futures premium has converted into a discount 6 .90 points with
no significant change in open interest. Majority of stock futures
have seen unwinding of long positions; the total market open
interest has decreased by 5.34% along with decrease in
average cost of carry from 5.66% to 1.71%. On the options front
put options have seen short closure while calls have seen short
accumulation suggesting that selling may continue in the near
term . The markets are likely to open on a flat note today;
traders are advised to assume short positions if Nifty fails to
cross and hold above 5140 levels for targets of 5020 and 4980
levels. Alternatively, they may assume intraday long positions
above 5140 levels for targets of 5170 and 5220 levels

HOT NEWS

Reliance Industries Ltd
AGM :12th October
Stock Split on card......Stock will spurt by 100-200 before 12th October.(Support exist at 2396,2370 level...In panic buy this stock)


Telecom ,IT ,Refinery ....Looking Hot Buy them
IDEA, RCOM, BHARTI
New Telecom Policy will be out in day or two & major benefit to this stock

IT stocks which might be propelled from Infosys guidance.
HCL TECHNOLOGY BUY FOR 322 sl 309

Aksh Optic Fibres(Rs.63) is the next goldstone in the making with IPTV going great. It appears Reliance is eyeing stake in the same

JINDAL STEEL (C- 6693.3 ): Looking Strong: Buy around 6519.4 Target1-6989, Target2- 7284 Support1-6224-Support2-5754

ABAN LOYD CHILES (C- 3744.75): Looking Bullish: Buy around 3696.6 Target1- 3848, Target2-3951: Support1-3593-Support2-3442

TRADING STRATEGY :9th October'07

Note-More panic is not ruled out,Crucial support for short term is broken.But anytime buy from lower level is expected too.


Nifty Future Support & Resistances -09.10.2007
RES 1- 5215 RES 2- 5345 SUP 1 – 4990 SUP 2 -4895

Nifty Spot Weekly Support & Resistances
RES 1- 5300 RES 2- 54?? SUP 1 – 5035 SUP 2 -48??

Sensex Intraday Levels –09.10.2007
RES 1- 17875 RES 2- 18260 SUP 1 – 17210 SUP 2 -16935

Market View – 09.10.2007
Opening is flat,to down,buy only abv 5115 sl 5095 tgt 5185-5215.sustain below 5110,sell with SL 5128 tgt 5000-4990

Long term traders buy & hold this goldmine.
Mercatorline
INTRADAY CALL

INFOSYSTCH FUT +VE ABOVE -VE BELOW
CLOSE 1998 1990 1970