TRADING STRATEGY FOR 5TH OCTOBER 2009
(Based on technical by O P AGARWAL of bazarbhavishya)


Markets may extend gains this week

Markets extended the gains in the previous week with the Sensex advancing by more than 440 points despite shortened week of merely three trading sessions. The Sensex after touching a 16 month high at 17196 finally closed the week at 17135. Market participants remained upbeat through out the week on expectations of strong Q2 results which will start rolling out from this week with Infosys declaring their results on the 10th instant. The market sentiment remains firm with a string of data indicating recovery in the economy with the latest robust figures for the September dispatches released by the auto and cement sectors last week. However, global cues will remain key factor to be watched out for by the investors during the week. Readers are hereby advised to trade with caution and remain stock specific in view of quarterly earning season since profit taking at higher levels is not ruled out.


NIFTY FUTURE (Last close 5069.85)
The counter closed the week gaining more than 100 points amid high volatility but with lower than half its ten day’s average volumes which suggests that current levels may find it difficult to sustain and may see profit taking at higher levels. Global cues too will be of prime importance for the market sentiment but the counter may remain volatile in view of Q2 results being rolled out from this week. Intra day trading levels for paid subscribers only.

CENTURY TEXTILES FUTURE (Last close 497.85)
The company is a diversified company manufacturing cotton textiles, yarn, denim, viscose filament rayon yarn, tyre cord, caustic soda, sulfuric acid, salt, cement and pulp & paper. The company’s net profit rose 104.74% to Rs 141.62 crore in the quarter ended June 2009 as against Rs 69.17 crore during the previous quarter ended June 2008. The company proposes to spend nearly Rs 625 crore in the first phase of land development in Mumbai. Meantime, the stock after remaining range bound closed the week gaining over 2% with positive bias. The stock appears positive on weekly charts and may move up to 507/511 once it trades and remains above 501.25. Strong support for the stock exists at 495.25.

REC FUTURE (Last close 202.85)
REC is a term lending institution and a government enterprise, is engaged in the business of lending to power projects. The Government of India holds 81.82% stake in the company (as on 30 June 2009). The proposed follow on public offer (FPO) of the company may enter capital markets in the third week of January 2010. The Board last month declared a dividend of 25% for the year 2008-09. The company has big plans to raise money from the market trough mixture of instruments and use the fund to disburse loans for power projects. Meantime, the stock after consolidation during the past fortnight closed the previous week gaining over 2% with positive bias. The stock appears positive on weekly charts and may move up to 207/210 once it trades and remains above 203.50. Strong support for the stock exists at 200.25.

EMCO LTD (CASH SEGMENT) Last close 93.65)
The company is a leading player in Indian Transformer and Power ancillary segment. The company holds a very healthy order book of more than 1500 crores and with the government emphasis on the power sector as a whole will help provide decent revenue and earnings opportunity for the company in the near future. Meanwhile, the stock after consolidation during the past fortnight closed the week gaining more than 4% over its previous close. The stock appears positive on weekly charts and may move up to 99/104 once it trades and remains above 94.75. Strong support for the stock exists at 91.25.

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
Visit Welcome to BazarBhavishya regularly
Email: opagarwal805@gmail.com
Mobile: 09825029446