TRADING STRATEGY FOR 9TH DECEMBER 2009
(Based on technical by O P AGARWAL)
Markets recover smartly in late hour rally
The market opened flat yesterday on the back of weak global cues but soon firmed up on strong buying interest and short covering in frontline stocks led by heavyweights. The market rallied sharply, primarily owing to short-covering, in the final hour of trade and ended the session yesterday on a buoyant note despite negative signals from the global markets. The Sensex ended the day at 17,227, slightly off the day’s high, with an impressive gain of 244 points. The Nifty too ended with whopping gain of 81 points at 5147. Market participants turned positive on the hope that the government would push forward reforms and speed up divestments as promised. The sentiment was aided by finance minister’s assertion that the government does not need to borrow more than planned to fund its additional proposed expenditure and it will complete share sales through public offers in three state companies by the end of March 2010. Realty and metal stocks, which remained subdued after a good opening yesterday bounced back in late afternoon trades. Stocks from FMCG, oil, IT, bank and power were also seen in demand yesterday. In short the late hour rally yesterday improved the market sentiment substantially and hopefully the rally may gain further momentum today also. The market breadth however, was quite strong as on BSE, 1865 stocks advanced and 951 stocks declined, while 78 stocks ended flat.
NIFTY FUTURE (Last close 5157.96)
The counter after flat opening yesterday smartly moved up and stayed firm till early noon when a sudden sell off in frontline stocks pulled down the NF to its day’s low at 5057 but a sharp pull back around mid afternoon took the NF to its day’s high at 5162. The counter finally closed the day gaining a whopping 88 points. The counter to retain its up trend needs to trade and remain above 5179.85 whereby it may move up to 5209/5239. Strong support for the NF exists at 5119.25 which if breached decisively with volumes then NF may slide to 5103/5083.
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FEDERAL BANK FUTURE (Last close 248.75)
The stock after remaining range bound during the past three trading sessions closed yesterday above its short term trend line with moderate volumes. The chart patterns for the stock appear positive and it may move up to 252/255 once it trades and remains above 248.75. Strong support for the stock exists at 245.25.
EDUCOMP FUTURE (Last close 752.65)
The company is a technology-driven, e-learning solutions provider specializing in creation, management and delivery of learning content. The company’s net profit rose 39% to Rs 50.40 on a 39.80% increase in sales to Rs 206.87 in Q2 September 2009 over Q1 June 2009. The company hopes to augment its revenue by roping in more institutions. The company holds a bright future. Meanwhile, the stock after moving range bound during the past four trading sessions closed yesterday gaining over its previous close on high volumes. The stock appears positive on charts and may move up to 759/764 once it trades and remains above 754.75. Strong support for the stock exists at 747.25.
KIRI DYES & CHEMICALS (Last close 657.35)
The stock closed yesterday gaining an impressive 9% over its previous close on sustained buying from informed quarters. The counter clocked high volumes and closed with positive bias. The stock may retain its up move once it remains and trades above 663.75 whereby it may further move up to 674/695. Strong support for the stock exists at 640.25. Meantime, the company through its subsidiary in Singapore is reported to have concluded a deal to acquire the German conglomerate Dystar Group which is a world leader in the field of dyes and dyes intermediates and solution, leather etc., with more than 20% world market. The company hopes to get a big boost with the acquisition and hopes to earn substantially higher revenue resulting in fat bottom line.
ASTEC LIFESCIENCES (Last close 91.85)
The company is engaged in the manufacturing and sale of intermediates, active ingredients and formulations in the off patent-proprietary category with a focus on agrochemical and pharmaceutical industry. The stock after its recent listing moved range bound with average to moderate volumes. The stock closed yesterday gaining over 5%. The stock has up ward potential as is evident on charts and may move up to 97/101 once it trades and remains above 93.50. Strong support for the stock exists at 90.25. Meantime, it is reported that the company may come out with highly encouraging half yearly results. The company has a fairly large order book from various world giants.
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.
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