TRADING STRATEGY FOR 22ND MAY 2009

TRADING STRATEGY FOR 22ND MAY 2009
(Based on technical by O P AGARWAL)

Markets close weak on profit taking

Market opened
gap down yesterday on the back of weak global cues and remained subdued through out the session except around mid noon when a rebound was noticed which too could not sustain under selling pressure and the Sensex finally closed the day amid high volatility at 13736 losing a massive 324 points making a low of 13704 and a high of 14089 during the day. The Nifty too lost 59 points and ended the session at 4210 after making a low of 4199 and a high of 4319. Stocks from banking, capital goods, auto and FMCG were the big losers while oil and selected IT shares remained firm. Market participants will be keenly watching the new incumbent for the finance and commerce ministries. Meantime, in view of market volatility, readers are advised to trade with caution and avoid taking large positions.

NIFTY FUTURE (Last close 4219.95)
The counter after gap down opening yesterday remained under pressure through out the session
except at mid noon when it rebounded to a high of 4328 but could not cross the resistance level of 4331 indicated in these columns yesterday and slipped back. The counter finally closed the day losing 70 points amid high volatility and intra day swing of more than 120 points. The counter is witnessing profit booking at higher levels and may slip further to 4167/4134 once it trades and remains below 4196.25. Strong resistance for NF exists at 4263.75, which if crossed decisively it may move up to 4282/4309.

JINDAL SAW FUTURE (Last close 362.05)
The stock of the company may remain under pressure amid multiple concerns one among slowing order flow impacting significantly company’s future revenues. As per reports, the company has outstanding derivative contracts, where the bankers have estimated MTM loss from all outstanding contracts at approximately $103 million, but the same has been neither charged to the Profit & Loss Account nor considered in the Balance Sheet. The gain or loss on the same is being accounted on settlement, which is different from the standard accounting practices and may weigh on the stock’s valuations. Meantime, the stock has surged a hefty 80% during this month from a low of 218 to a high of 393. However, the stock is moving range bound during the past three trading session but is not able to sustain at higher levels and may therefore, witness profit booking which may take the stock down to 349/343 once it trades and remains below 356.25. Strong resistance for the stock exists at 369.75.


TITAN FUTURE (Last close 1076.25)
The company has decided to close down its two branded jewellery stores, Tanishq, in the US which had resulted in a charge of Rs 29.02 crore to the profit and loss account of Titan, according to the announcement made on BSE last week. The company is planning to cut costs on several counts to survive in these challenging times. Meantime, the stock of the company has surged a whopping 60% during the past 14 trading sessions from a low of 719 on 28th April 09 to a high of 1149 made yesterday. The stock may witness profit taking at current market price and may slip to 1053/1034 once it trades and remains below 1069.25. Strong resistance for the stock exists at 1085.75.

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.