TRADING STRATEGY FOR 27TH JULY 2010
(Based on technical by O P AGARWAL)


Markets close lower on profit taking

The market opened firm yesterday but drifted lower within few minutes and thereafter moved in a tight band till around noon when a small recovery was noticed but that too failed and the market lost ground consistently thereafter till the end of the session on selling pressure from across the board. The market participants preferred to trade cautiously ahead of apex bank’s meet and some key Q1 numbers today. The market sentiment turned weak further on disappointing Q1 results from Maruti and Jaiprakash Associates. The Sensex, which surged to 18,194 in opening trade, dipped to 17,993 towards the closing minutes and ended at 18,020, losing 110 points. The Nifty closed the session yesterday at 5418 losing 30 points after making a high of 5466 and a low of 5409. It is believed that the RBI may hike key rates by 25 basis points to contain the rising inflation. Further, Q1 numbers due today of Reliance, L&T and HUL will be keenly watched by the investors. Meantime, the market breadth remained weak yesterday as out of 3008 stocks traded on BSE, 1824 stocks declined. 1090 stocks surged higher and 94 stocks ended flat.

NIFTY FUTURE (Last close 5422.55)
The counter after firm opening yesterday slipped lower within minutes on selling pressure and remained range bound till noon when a small recovery was noticed but that too failed to sustain and the indices thereafter lost ground consistently till the end dipping to a low of 5416. The counter finally closed the session with marginal loss of 21 points. The counter may gain strength once it trades and remains above 5438.75 whereby it may move further to 5457/5474. Strong support for the NF exists at 5407.25 which if breached decisively with volumes then NF may slide to 5390/5372.



CIPLA FUTURE (Last close 326.70)
The company one of the primary drug makers recently announced the acquisition of significant minority stake in two biotech companies — one each in Goa and Shanghai — for $65 million (approximately Rs 300 cr) to consolidate its presence in the growing biotech sector. The company holds a bright future. Meantime, the stock of the company after consolidating during the past week closed yesterday with positive bias gaining marginally. The stock appears positive on charts and may move to 331/334 once it trades and remains above 327.75. Strong support for the stock exists at 324.25.

COLPAL FUTURE (Last close 853.45)
The company is engaged in the personal care business, which includes oral care toothpastes, toothpowder, mouthwash, toothbrushes and whitening products. Meantime, the Company posted a net profit after tax of Rs 1219.80 million for the quarter ended June 30, 2010 where as the same was at Rs 1027.80 million for the quarter ended June 30, 2009. The company hopes to fare better in the remaining quarters of this fiscal. Further, the stock after consolidating during the past week closed yesterday with marginal gain with positive bias. The stock appears positive on charts and may move to 858/862 once it trades and remains above 854.75. Strong support for the stock exists at 850.25.

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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