INVESTMENT IDEAS

In my opinion Satyam Computer looks like a very good investment in the medium term. The stock looks strong technically and should make a new high in the coming 6 months.
Another stock that should be in your portfolio is Reliance Energy. The stock price will appreciate by 30-40% in the coming 6 months. REL looks the strongest in the Reliance pack technically.

Market Outlook for 10/08/2008

The NIFTY went up by 4.23% today on the back of good global cues and lowering crude prices.
There was short covering today which was evident from the narrowing futures discount. The July contract shed about 1095550 in open interest. On the technical front the MACD on the daily NIFTY chart has given a buy signal. However, in my opinion one should wait for NIFTY to cross 4230(20 day EMA) befor initiating a long position. Its better to stay out and watch the market for 2-3 days as fundamentals are still bearish.
If you are bullish on NIFTY 4400 calls can be brought for around 2000 bucks. In case of the trade going against you one can establish a short position in NIFTY futures.

MARKET OUTLOOK FOR 09/07/2008

The Market bounced back from the lows of the day in afternoon trade. The Discount on NIFTY futures is pretty wide which indicates that shorts are not being covered. However, crude oil has gone down by about 6 dollars which might lead to a 100-150 points rally on the NIFTY in the short term. Scalpers can go long and look for 50-100 points p[rofit. In the medium term things are still looking pretty bearish and swing traders shoul establish short positions on rallies. Reliance Ind is trading below Rs2000 abd there is a high probability that it would go down further which will pull the NIFTY down.
Option traders can establish long strangle positions as the markets are expected to be volatile. I suggest buying 4300 calls and 3800 puts. Straddles can be brought by traders with a little more risk appetite (Buy 4000 call and 4000 put)

SUPPORT and RESISTANCE LEVELS for NIFTY

R1 4095.66 S1 3983.16
R2 4161.33 S2 3936.33
R3 4227 S3 3870.66

NIFTY Futures Trading Call for 08/07/2008

In my opinion the chances of a sell off are very high. However, we can witness a gap up opening if the U.S Markets close with significant gains. Even up there is a Gap Up opening long positions should not be initiated. I suggest taking a short position if NIFTY crosses 4075 with a stop loss of 4150. Aggressive traders can initiate shorts if the NIFTY goes below 4000 with a stop loss of 4125. There is a strong possibility that the NIFTY would go below 3700 in the short term

Long Term Investment Picks

Allahabad Bank Strong Buy The Stock is trading at nearly 1/2 its book
value of Rs. 97. It is a low risk investment
with a time span of 1-2 years
Cipla and Glaxo in the pharma sector are a good ivestment as both have a high ROCE at current levels

NIFTY trading call for 07/07/08

The markets have been very volatile in the previous week. This volatality is expected to continue for the coming week.
Keeping this in mind i suggest a long strangle position
Buy 3700 Put Cost 55 55*50= 2250
Buy 4300 put Cost 80 80*50=4000
Total Cost Rs. 6250