 28 July, 2010 | |  |
Markets opened on a slightly positive note and moved in a narrow range ahead of the Credit Policy and the only positive factor in the credit policy was that there were no negative surprises. CRR remained unchanged and Repo rate was hiked by 25 basis points and Reverse Repo by 50 basis points. L&T results were in line with the estimates but stock closed on a lower note. Reliance Industries has managed to meet the market estimates but for the Nifty to cross the crucial resistance of 5500 level, it badly needs outperformance from Reliance Industries. Since this has not materialized, we expect Nifty to face stiff resistance around 5480-5500 levels where it is likely to meet with huge selling. The best case scenario would be a range bound market with action in stock specific counters.
There was some relief for Maruti as the company in its conference call indicated that royalty payment to Suzuki will become Nil in the next 3 to 4 years. But since it has been downgraded by major brokerage firms, it will have to spend around 1180-1240 range for quite some time.
Stocks like LIC Housing Finance, Aurobindo Pharma, Bajaj Auto and ACC are looking good and can be bought on declines.
The resistance for Nifty lies around 5480-5500 and the support lies at 5410 and 5380 levels.
LOW RISK / LOW RETURN
NOTE : IN CASES WHERE CASH LEVELS ARE GIVEN, BUY/SELL FUTURES WHEN THE CASH PRICE CROSSES THE BUY ABOVE/SELL BELOW LEVEL IN CASH
| SCRIP | STRATEGY | S. LOSS | TARGET | HOLD PERIOD |
HIND PETRO CASH | BUY ABOVE Rs.441 | 424 | 454/460 | 6-7 DAYS |
KSCL | BUY ABOVE Rs.288 | - | 304/325 | 8-10 DAYS |
MEDIUM RISK / MEDIUM RETURN
NOTE : IN CASES WHERE CASH LEVELS ARE GIVEN, BUY/SELL FUTURES WHEN THE CASH PRICE CROSSES THE BUY ABOVE/SELL BELOW LEVEL IN CASH
LIC HOUSING FINANCE ( CASH – Rs.1081.85) : The stock came out with good quarterly numbers and has been an operator and fund favourite. Buying is advised above Rs.1091 for a target of Rs.1112 and Rs.1135. Higher target of Rs.1168 and Rs.1199. Stop Loss of Rs.1028 should be kept. The time frame of the trade would be around 12-15 trading sessions.
| Disclaimer: The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. Readers using the information contained herein are solely responsible for their actions. The information and views contained herein are believed to be reliable but no responsibility or liability is accepted for errors of fact or opinion. Editors may or may not have trading or investment positions in the securities mentioned herein. |
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SUNIIL D PACHISIA PRATIBHUTI
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