TRADING STRATEGY FOR 14TH OCTOBER 2009
(Based on technical by O P AGARWAL)


Markets close buoyant

The market opened positive on Monday last on strong global cues coupled with Anil Ambani's call to his elder brother Mukesh for amicable settlement of various disputes between them. The stocks of Reliance pack hardened on sustained buying and short covering by the bears, which pulled up the indices higher. Further, impressive industrial production data, hopes of strong Q2 earnings from India Inc. and good opening on European bourses also aided the sentiment. The Sensex, which opened gap up of about 45 points at 16,687 and hit a high of 17,068 in late afternoon trade, closed the session at 17,026 with an impressive gain of 384 points. The Nifty closed with a massive gain of 109 points or 2.21% at 5054 after hitting a high of 5068 in intra day trades. Stocks from IT, oil, bank, metal sectors rallied sharply on sustained demand from investors. Meantime, as per IIP data, the industrial output rose 10.4% in August from a year earlier. The rise was much higher than estimates and the steepest rise in 22 months. Manufacturing production rose 10.2% in August from a year earlier. The market breadth was strong throughout the session as out of 2829 stocks traded on BSE, 1627 stocks closed on a positive note. 1108 stocks declined and 94 stocks ended flat. The overall sentiment remains quite positive which may extend the gains further up. However, readers are advised to trade with caution and remain stock specific in view of Q2 earning season.

NIFTY FUTURE (Last close 5059.50)
The counter after flat opening of Monday last moved into positive territory within minutes of trading and remained range bound till late afternoon when a surge in frontline stocks was noticed amid heavy buying which pulled up the NF to day’s high at 5075. The NF’s up move is mainly attributed to better than expected IIP data and reports of amicable settlement between the Ambani brothers. Q2 results also aided the counter to maintain its buoyancy. The counter appears positive but one needs to remain cautious and watch the market trend before building large positions Intra day trading levels for paid subscribers only.

UNITED PHOSPHORUS FUTURE (Last close 164.75)
The company is the largest Indian agrochemicals player and among the top five generic players globally in this industry. It is engaged in research, manufacture and distribution of agrochemicals and specialty chemicals across the globe. The company’s net profit rose 11.8% to Rs 52.11 crore in Q1 June 2009 over Q1 June 2008. The company hopes to do much better in the remaining quarters with signs of economic recovery in sight. Meantime the stock of the company after remaining sideways on last trading closed the session flat with marginal gain. The stock appears positive on weekly charts and may move up to 169/174 once it trades and remains above 165.45. Strong support for the stock exists at 162.00.

HCL TECH FUTURE (Last close 303.25)
The company is a global technology and software services company offering software services, business process outsourcing services and infrastructure management services. The company’s net profit rose 26.46% to Rs 192.94 crore on 9.21% rise in net sales to Rs 1145.54 crore in Q4 June 2009 over Q3 March 2009. The company besides announcing many landmark global engagements like Nokia, Readers Digest Association, Dr. Pepper Snapple Group and ViacomInc was recently ranked as Worlds No.1 IT Infrastructure Services Provider by Blackbook of Outsourcing Survey 2009. The stock in the meantime, after making a recent high of 351 remained subdued and drifted more than 17% and dipped to a low of 294 on Monday last but showed a sharp recovery and closed higher. The stock appears positive on charts and may move up to 308/315 once it trades and remains above 304.25. Strong support for the stock exists at 299.25.

DEAR READERS,
PLEASE WATCH THE MARKET TREND AND USE YOUR
OWN DISCRETION BEFORE TAKING A TRADE.
Protect profits with trailing stops and cut losses fast.
Avoid adding contracts in loss making trades