TRADING STRATEGY FOR 8TH OCTOBER 2009
(Based on technical by O P AGARWAL)


Markets may remain cheerful with RIL bonus announcement

The market yesterday opened in the positive on the back of strong global cues but around noon heavy sales in frontline stocks by the market participants pulled down the indices to the negative territory. IT stocks were the worst sufferer due to strong rupee vis a vis US $. The Sensex, which opened yesterday more than 100 points up and surged to 17,120 in early trade, closed the day at 16,806 near its day’s low losing 151 points. The Nifty closed with a loss of more than 40 points at 4985 after making the day's high of 5077. The market breadth however, remained marginally positive at close. Out of 2843 stocks traded on BSE, 1420 stocks closed higher. 1331 stocks declined and 92 stocks ended flat. Meantime, a surprise bonus issue announced by Reliance Industries (RIL) after trading hours yesterday may boost the market at the onset of the trading session today. However, readers are advised to trade with caution and remain stock specific while making any new position.
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NIFTY FUTURE (Last close 4975.90)
The counter after strong opening yesterday on the back of positive global cues failed to sustain at higher levels owing to heavy sell off in front line stocks around noon which dragged the indices with the Nifty touching a low of 4983. The counter thereafter remained range bound throughout the session but a fresh bout of selling during the closing hours finally ended the session with a loss of 63 points for the NF. The counter as indicated earlier remains under pressure but today with RIL’s bonus announcement yesterday may reverse the position with positive opening and surging more than 60 points at opening. Intra day trading levels for paid subscribers only.


REC FUTURE (Last close 201.450
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 yesterday flat with high volumes. The stock appears positive on charts and may move up to 205/209 once it trades and remains above 202.25. Strong support for the stock exists at 198.25.

HDIL FUTURE (Last close 341.70)
The company’s services include residential, commercial, and retail real estate development with specialisation in slum rehabilitation projects. The company has seen good response to its new launches and hopes substantial boost in its revenues in the coming quarters with the economy showing signs of improvement. Meantime, the stock after moving range bound during the past three days closed yesterday above its weekly resistance with very high volumes. The stock appears positive on weekly charts and may move up to 348/353 once it trades and remains above 343.75. Strong support for the stock exists at 337.25.

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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