Daily Trading Strategy

The Strategist

Strategies for the day

Date             Company      View          Strategies      Action                                      Risk                     Reward
22-10-2009 ICICIBANK BEARISH BUY PUT     BUY 920 PA @ 19.00             2450                    4900
OCT. EXPIRY
SL : 12.00 TGT : 33.00

First Call

Daily Trading Tips

M&M (MAHINDARA & MAHINDARA)

Execution Price Range Stop Loss Target

Sell Between Rs 885 to 905 910 865

TATASTEEL

Execution Price Range Stop Loss Target

Sell Between Rs 550 to 560 562 541

MPHASIS

Execution Price Range Stop Loss Target

Buy Between Rs 650 to 660 648 669

Market Outlook

Global cues are weighing heavy on our markets,

because of which our markets have become volatile

even after better corporate earnings. Especially news

flow like US where yesterday it failed to sustain the

10000 mark even after dollar index making a new low

of 75.08, crude made a new high of the year of $82

on inventory data and even the 10yr yield has been

increasing. Though the long term story stills remains

intact of uptrend because the economic outlook by

the PMEAC (Prime ministers Economic Advisory

council) still project our GDP growth at 6.5% though

the concerns over bad monsoon, increase in inflation

and interest rates still persist. Also hinting of soft

interest rates for the time being but not ruling out the

changes in them before other economies would act.

We need to wait and watch for our next credit policy

which will be out on Oct 27th though the expectations

of rate changes are very minute.

Today the global markets are weak and FII’s have

also been sellers yesterday hence our markets may

also see a weak start and therefore we have a

cautious view for today.

Currency Market

USD/INR DAiLY

High volatility in asset classes across the globe did show its affect on USDINR pair as the currency pair touched 46.50, registering a smart

recovery of 70 paisa in a matter of one week after making its low of 45.82. Although internationally dollar index was quoting below 75.50

level mark, the rise in USDINR indicates a breach of correlation from the international currency markets briefly. The EURUSD pair traded

near 1.50 after reports showed improvement in U.S leading indicators and German Business confidence. However American equity index

the Dow Jones closed down by 92 points at 9949 after selling was witnessed in computer related stocks lead by IBM.

Bearishness in equity markets was partly responsible for rise of USDINR with Nifty falling by 50 points to close the day at 5063 levels.

However the main concern for USDINR continued to be higher oil prices. Crude oil in NYMEX breached the $80 mark and was quoting at

$81.37/barrel. Rise in crude oil prices is expected to affect Rupee as costs of Imports is expected to rise leading to increase in trade deficit.

Also higher crude oil prices will lead to rise in inflation which will trigger rise of interest rates by the central bankers.

Overall we feel 46.45 as a very crucial level for the pair on intraday basis. As long as USDINR trades above these levels one can go long in the

pair.

Yesterday Market Summary

Market Summary

It was a ranged and mildly volatile day of trade that saw the market end weak on account of profit booking. Sensex shut shop at 17009, down 213 points and Nifty at 5063, down 50 points from the previous close. CNX Midcap index was down 1.88% and BSE Smallcap index was up 0.23%. The market breadth was negative with advances at 496 against declines of 776 on the NSE. Top Nifty gainers included HCL Technologies,Jindal Steel and TCS while losers were Tata Motors, Tata Steel and HDFC.

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