TRADING STRATEGY FOR 28TH JULY 2010
(Based on technical by O P AGARWAL)


Markets close with cautious optimism

The market opened flat to firm yesterday but slipped lower soon after in early trades and moved in a narrow range till the apex bank’s policy around noon. The markets thereafter rallied higher, ignoring the rate hike by the RBI but pared a significant portion of its gains in subsequent trades later on the day. The market participants preferred to trade with caution ahead of announcement of Q1 results by the bellwether Reliance Industries. However, the Q1 results as announced by Reliance in late evening yesterday posted net profit of 48.51 billion rupees ($1.04 billion), in line with forecasts, versus 36.66 billion rupees ($785 million) a year ago helped by higher gas output from its fields off east coast and improved refining margins. The RBI, in a move to contain inflation, hiked repo and reverse repo rates by 25 and 50 basis points respectively to 5.75% and 4.5%. The central bank has, however, kept the CRR unchanged at 6%. However, the apex bank’s upward revision in inflation forecast hurt the market sentiment to an extent which resulted in profit taking in closing hours. The Sensex, after rising to 18149 closed the session yesterday at 18077 gaining 57 points. The Nifty closed flat with marginal gain at 5430.

NIFTY FUTURE (Last close 5434.60)
The counter after flat to positive opening yesterday slipped in the negative within minutes and remained range bound thereafter till the announcement of credit policy. The RBI hiked the repo and reverse repo rates which, was taken in its stride by the market and NF rallied on hectic buying in front line stocks. The market however, witnessed profit taking at higher levels and pared a significant portion of its gain in closing hours and finally closed the session flat with marginal gain. The NF to retain its up move needs to trade and remain above 5451.75 whereby it may move up to 5468/5487. Strong support for the NF exists at 5416.25 which if breached decisively with volumes then NF may slide to 5400/5388.


EDUCOMP SOLUTIONS FUTURE (Last close 621.65)
The company is a technology-driven, e-learning solutions provider specializing in creation, management and delivery of learning content. The stock of the company after moving range bound during the past four trading sessions closed yesterday with positive bias gaining over one percent with high volumes signifying accumulation at CMP. The stock remains positive on charts and may move up to 628/634 once it trades and remains above 623.75. Strong support for the stock exists at 617.25.

HCL TECH FUTURE (Last close 380.55)
The stock after remaining steady during the past four trading sessions closed yesterday above its weekly resistance with high volumes suggesting accumulation at CMP by informed quarters. The stock remains positive on charts and may move up to 384/388 once it trades and remains above 381.50. Strong support for the stock exists at 376.25.

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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