TRADING STRATEGY FOR 7TH OCTOBER 2009
(Based on technical by O P AGARWAL)


Markets surge in late rally


The market opened on strong note yesterday but within minutes of trading plunged into the red on heavy sell off in the pivotals led by telecom stocks. As the session progressed the market dipped further with the Sensex sliding to day’s low at 16622 around early noon. Realty, IT and capital goods sector stocks too were hammered and suffered sizable losses in early noon trades. However, the market saw hectic buying around early afternoon which lifted the indices to the positive territory. The Sensex, which had gone down around 250 points around early noon, surged to 16,988 and finally closed the session at 16,958, making a gain of 92 points for the day. The Nifty closed 24 points up at 5027, well off the day's low of 4921. Telecom stocks failed to make recovery and saw big sell off for the second consecutive session on reports that TRAI may make the per second billing a mandatory tariff option for all operators, which if implemented, is likely to significantly impact revenues of telecom service providers. The readers are therefore, advised in view of high volatility in the market, to avoid building large positions till clear trend emerges.
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NIFTY FUTURE (Last close 5039.05)
The counter after strong opening yesterday slipped in to the red within minutes of trading on heavy sell off in telecom and other frontline stocks. The counter turned highly negative and touched a low of 4918 in early noon trades. However, a sharp recovery around early afternoon amid heavy buying in index heavyweight stocks pulled up the counter in positive territory and finally the NF managed to close near its weekly support gaining 30 points. The counter however, appears over stretched with certain chart indictors pointing toward negative bias. One therefore, needs to avoid large position build up till clear market trend emerges. Intra day trading levels for paid subscribers only.

UNITED PHOSPHORUS FUTURE (Last close 167.45)
The company is the largest Indian agrochemicals player and among the top five generic players globally in this industry. It is engaged in research, manufacture and distribution of agrochemicals and specialty chemicals across the globe. The company’s net profit rose 11.8% to Rs 52.11 crore on a 33.5% gain in sales to Rs 659.49 crore in Q1 June 2009 over Q1 June 2008 despite tough economic conditions prevailing worldwide. The stock meanwhile, after remaining range bound during the past four trading sessions closed flat yesterday after making a high of 173 in intra day trades. The stock appears positive on weekly charts and may move up to 172/176 once it trades and remains above 168.25. Strong support for the stock exists at 165.25.

GAIL FUTURE (Last close 366.55)
The company one of the biggest gas transporter approved last month a pipeline project in southern India for about 30.3 billion rupees ($625 million) for transmitting 16 million standard cubic metres per day of gas. The line will be connected to the company's Dabhol-Bangalore pipeline, which will be laid at cost of about 45.4 billion rupees. The company is embarking upon more such plans to reach consumers. Meantime, the stock after moving range bound during the past three trading sessions closed above its weekly buy signal with average volumes. The stock appears positive o charts and may move up to 373/377 once it trades and remains above 368.25. Strong support for the stock exists at 363.25.

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
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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.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken by them. The author won't be liable or responsible for any legal or financial losses made by anybody.