TRADING STRATEGY FOR 26TH JULY 2010
(Based on technical by O P AGARWAL)



Markets close the week on buoyant note

The market closed the week on a buoyant note backed by continued buying interest shown by FIIs, strong macro economic scenario over the progress of monsoon and better than expected Q1 earnings by the corporate sector. The market remained positive on three out of five trading sessions last week. The Sensex finally closed the week at 18130 gaining 175 points whereas the Nifty closed at 5449 gaining 55 points. Meantime, with the expiry of July F&O series this Thursday, volatility may rise with the rollover to new August series. The apex bank’s meeting to review monetary policy on Tuesday will also be keenly watched by the market participants besides select corporate results prominent among them being the Reliance pack. Further, the Prime Minister's Economic Advisory Panel last week made a forecast of 8.5% growth in GDP in the fiscal year that ends in March 2011 (FY 2011). It expects 4.5% growth in farm output in FY 2011. The headline inflation will be at 6.5% by March 2011, the panel said in a report. The report also said net capital inflows would be $73 billion. The market this week appears to consolidate at current levels with positive bias.

NIFTY FUTURE (Last close 5443.80)
The counter closed the week in the positive gaining about one percent amid high volatility and intra week swing of more than 125 points. The counter this week may remain in the range of 5367-5529, break above NF may move further to 5555/5587, or else break below NF may slide to 5331/5301. For today’s trading the counter to gain strength needs to trade and remain above 5461.75 whereby it may move up to 5482/5512. Strong support for the NF exists at 5419.25 which if breached decisively with volumes then NF may slide to 5401/5375.


TATA CHEMICAL FUTURE (Last close 327.85)
The company is a global enterprise with interests in chemicals, crop nutrition and consumer products. The products produced by the company include soda ash, sodium bicarbonate, sodium tri poly phosphate, fertiliser and cement besides JV in Morocco for the manufacture of phosphoric acid. The company hopes to fare much better this year with the recent reimposition of the safeguard duty on Chinese soda ash imports, and the expectations of a normal monsoon. Meantime, the stock after remaining range bound during the past fortnight closed the week flat with average volumes. The stock appears to be accumulated at CMP as is evident on charts and therefore may move up to 333/336 once it trades and remains above 328.75. Strong support for the stock exists at 324.25.

ICICI BANK FUTURE (Last close 907.65)
The stock of the largest Indian private sector bank has remained steady during the past fortnight and closed the week gaining over one percent with good volumes. The stock remains positive on charts and may move further up to 919/928 once it trades and remains above 909.75. Strong support for the stock exists at 898.25.

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


Disclosures: At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.
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