TRADING STRATEGY FOR 19TH MAY 2009
(Based on technical by O P AGARWAL)
Market mood remains upbeat
Investors yesterday gave three cheers to the market after the decisive election victory of Congress led UPA whereby the Sensex leapt more than seventeen percent gaining 2110 points and closed the day at 14284 its highest close since September 11, 2008. Market participants appear confident that a strong coalition, free of the pressures from its former communist partners, has boosted the prospect of reforms to encourage growth. The election victory has also raised expectations the government could sell stakes in state-run firms to help fund a widening fiscal deficit and ease the pressure on market borrowing. It is further apprehended that the bears may also run to cover up their pending short positions, which they missed yesterday on low volumes, on fears of further upsurge in the stock prices thereby aiding the buoyancy in the markets. It was observed that stocks across the board hit impressive highs yesterday with those from the realty, banking, capital goods, power, metal and oil sectors attracting buying at sharply higher levels. Market euphoria may continue for some more time before consolidating with an eye on budget proposals.
NIFTY FUTURE (Last close 4332.05)
The counter, as expected, opened gap up yesterday on the back of decisive victory of Congress led UPA and surged a whopping 647 points after multiple positive circuits forcing the trading to halt for the day. The counter after breaching all its weekly levels yesterday may however, face resistance today at 4457.75 which if crossed over with volumes may take NF to 4519/4592. Strong support for NF exists at 4217.25.
BHEL FUTURE (Last close 2107.85)
The company is one of the major suppliers of power equipments but of late has by its own admission taken price cuts in some categories of its power equipment due to intense competition from Chinese players which may affect the bottom line of the company. The stock however, closed yesterday gaining 394 rupees surging a whopping 33% over its previous close albeit with very low volumes. It is now trading at a P/E of 38 times its trailing twelve months earnings which appears expensive but in the heat of momentum and short covering the stock may gain further, but may face resistance at 2193.75, which if crossed with volumes may take the stock to 2235/2302. Strong support for the stock exists at 2028.25.
TATA POWER FUTURE (Last close 1079.45)
The stock after touching a high of 1090 closed yesterday gaining a massive 166 rupees over its previous close albeit with a meager volume of 15 contracts. The counter may face resistance at 1119.75 which if crossed decisively with volumes may take the stock further up to 1145/1172. Strong support for the stock exists at 1036.25.
Readers may avoid trading in the above recommended stocks
unless, they have risk taking capacity.
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.
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.
(Based on technical by O P AGARWAL)
Market mood remains upbeat
Investors yesterday gave three cheers to the market after the decisive election victory of Congress led UPA whereby the Sensex leapt more than seventeen percent gaining 2110 points and closed the day at 14284 its highest close since September 11, 2008. Market participants appear confident that a strong coalition, free of the pressures from its former communist partners, has boosted the prospect of reforms to encourage growth. The election victory has also raised expectations the government could sell stakes in state-run firms to help fund a widening fiscal deficit and ease the pressure on market borrowing. It is further apprehended that the bears may also run to cover up their pending short positions, which they missed yesterday on low volumes, on fears of further upsurge in the stock prices thereby aiding the buoyancy in the markets. It was observed that stocks across the board hit impressive highs yesterday with those from the realty, banking, capital goods, power, metal and oil sectors attracting buying at sharply higher levels. Market euphoria may continue for some more time before consolidating with an eye on budget proposals.
NIFTY FUTURE (Last close 4332.05)
The counter, as expected, opened gap up yesterday on the back of decisive victory of Congress led UPA and surged a whopping 647 points after multiple positive circuits forcing the trading to halt for the day. The counter after breaching all its weekly levels yesterday may however, face resistance today at 4457.75 which if crossed over with volumes may take NF to 4519/4592. Strong support for NF exists at 4217.25.
BHEL FUTURE (Last close 2107.85)
The company is one of the major suppliers of power equipments but of late has by its own admission taken price cuts in some categories of its power equipment due to intense competition from Chinese players which may affect the bottom line of the company. The stock however, closed yesterday gaining 394 rupees surging a whopping 33% over its previous close albeit with very low volumes. It is now trading at a P/E of 38 times its trailing twelve months earnings which appears expensive but in the heat of momentum and short covering the stock may gain further, but may face resistance at 2193.75, which if crossed with volumes may take the stock to 2235/2302. Strong support for the stock exists at 2028.25.
TATA POWER FUTURE (Last close 1079.45)
The stock after touching a high of 1090 closed yesterday gaining a massive 166 rupees over its previous close albeit with a meager volume of 15 contracts. The counter may face resistance at 1119.75 which if crossed decisively with volumes may take the stock further up to 1145/1172. Strong support for the stock exists at 1036.25.
Readers may avoid trading in the above recommended stocks
unless, they have risk taking capacity.
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.
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.
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