TRADING STRATEGY FOR 26TH OCTOBER 2009
(Based on technical by O P AGARWAL)


RBI policy review key event of the week

The market after making a new 17-month high during the auspicious Diwali week failed to sustain in the subsequent week and the Sensex almost lost 500 points on profit taking. Meantime, the Apex Bank will come out with its policy statement on October 27 which is expected to leave key rates unchanged for the time being despite inflation inching up and is expected to move further higher. However, market will be keenly watching the timing the RBI decides for the exit policy since it has pumped in massive liquidity in the banking system early this year to revive the domestic economy in the aftermath of global economic meltdown. Further, with a number of frontline companies scheduled to report Q2 earnings this week, the market may see stock specific movement this week. And finally the global cues will also act as one of the major trend setter for the week. It is therefore important for the investors to trade with caution in view of high volatility the market may witness this week.


NIFTY FUTURE (Last close 5007.90)
The counter closed the week losing more than 117 points amid intra week swing of around 200 points on profit taking and weak market sentiment led by the fall in prices of Reliance pack coupled with other front line stocks. The counter appears to be consolidating at current levels but a positive trigger with the apex bank’s policy announcement tomorrow may reverse the falling trend or else NF may shed another 100-150 points. Readers are advised to remain light in their commitments and trade with caution. Intra day trading levels for paid subscribers.


ONGC FUTURE (Last close 1175.75)
The company specializes in the exploration and production of crude oil and gas with joint ventures in oil fields in Vietnam, Norway, Egypt, Tunisia, Iran and Australia. The group's other activities include deep-sea explorations on the east and west coasts of India, and the exploration of coal bed methane. Meantime, the company is said to have cut discounts on crude oil sold to state refiners by 79% in the second quarter after prices declined from a peak, an official said. Further, the stock of the company after moving range bound during the past week closed shedding around 5% of it value on profit taking. However, the stock appears to be consolidating at CMP and may move up to 1200/1213 once it trades and remains above 1181.75. Strong support for the stock exists at 1167.25.

CIPLA FUTURE (Last close 286.05)
The company manufactures pharmaceutical products including anti-asthmatics, anti-cancer, anti-inflammatory, anti-depressant and other therapeutic index including animal health care products. The company’s net profit surged 151.60% to Rs 400.85 crore on 28.7% rise in net sales to Rs 4229.46 crore in Q1 June 2009 over Q1 June 2008. Meantime, the stock after moving range bound during the past six trading sessions closed the week flat. The stock appears positive on charts and may move up to 292/296 once it trades and remains above 287.75. Strong support for the stock exists at 282.25.

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