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


Markets close higher with cautious optimism


Markets opened higher on Monday on the back of positive global cues but the market pared gains in mid morning session and lost further ground in early afternoon trades on declining Asian markets. However, the market regained strength thereafter upon positive opening of European bourses. In a volatile session, markets further lost sharply in mid afternoon trades but a sharp reversal was again witnessed in late trade. The entire session on Monday saw high volatility with the Sensex finally closing decisively above the 10500 mark at 10534.87. The Sensex touched an intra-day high of 10654.89 and a low of 10410.44. Nifty ended at 3256, up 1.42 per cent or 45.55 points. Nifty touched a high of 3303.90 and a low of 3211.35 during the day on Monday. Market sentiment remained firm on the back of expectations of easing of monetary policy by the apex bank. Readers are however, advised to trade with caution in view of unabated surge in the market during the past one month to the tune of around 30%, and therefore, profit taking is not ruled out at higher levels.


NIFTY FUTURE (Last close 3260.25)
NF closed on Monday gaining 37 points amid high volatility and intra day swing of more than 75 points. The counter has seen a sharp rise of more than 30% in a short span of less than one month from a low of 2531 made on 9th March 2009 leaving gaps in between and therefore, one needs a cautious approach as profit taking at higher levels is not ruled out. However, the counter to gain further strength needs to remain above 3288.75, whereby it may move up to 3314/3348. Strong immediate support for NF exists at 3234.25, which if breached decisively NF may slip to 3205/3187.


DIVI’S LABS FUTURE (Last close 926.40)
The company is engaged in research and development of pharmaceuticals and is the largest manufacturer of some peptide reagents and protected amino acids worldwide. However, on a consolidated basis, the company reported a 19.72% fall in net profit to Rs 79.53 crore on 6.82% drop in net sales to Rs 264.75 crore in Q3 December 2008 over Q3 December 2007. Meantime, the stock after moving range bound during the past week closed 3% lower on Monday on profit taking. The stock may witness further profit taking at current levels and may slide to 900/889 once it trades and remains below 916.25. Strong resistance for the stock exists at 937.75.


WOCKHARDT PHARMA FUTURE (Last close 74.05)
The company saw its stock valuations declining sharply during the past few months on severe cash crunch since the company is saddled with a total debt of Rs 3,700 crore and may have to incur an additional forex loss estimated around Rs 1,200 crore. The company is reported to have received around Rs 175 crore through loans from State Bank of India and another private bank, and is looking to infuse some fresh cash through the sale of its veterinary division. This is one of the many businesses the company is trying to sell to overcome its financial crisis. Meantime, the stock appears to be consolidating on sustained buying at current levels and may move up to 79/83 once it trades with volumes and remains above 75.75. Strong support for the stock exists at 72.25.



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.