Market Summary and Trading Calls for 07Nov06

Today both the Indian stock markets NSE and BSE traded in a very narrow range. The nifty closed at 3809.25 with a minor gain of 4 points whereas the sensex closed with a gain of 56 points at 13187. This was the third consecutive all time high close for the indices. However the indices did not reflect the stock specific action. Good action was seen in cement stocks, reliance Industries, Hindustan Lever and some metal stocks. Some disappointments came from ONGC, oil marketing and automobile stocks. FIIs were net buyers to the tune of 220 crores which reflects the strength in the markets even at these levels. However it is advisable to trade cautiously.

The outlook for 07Nov06 is positive. A renewed wave of buying interest in the US markets backed by some better than expected economic data has pushed the markets above the crucial resistance levels. This could push the emerging markets higher as the expectations raise. Sectorially cement and infrastructure stocks would continue to do well.

Trading Calls for 07Nov06:

Cement stocks continue to do well. Buy ACC, Gujarat Ambuja Cement and India Cements. They are still looking good.

Banking stocks have turned weak technically.
Sell Bank OF Baroda futures for target of 260 - Intraday call
Sell Oriental Bank of Commerce for target of 240 - Intraday call

Sell Divis Lab for 2-3 days period. Some correction expected.

Buy IVRCL, IFCI and Reliance Energy. All looking technically very good.

Keep a close watch on Tata Steel. Looking for a reversal on the upside. Can shoot up anytime.

Continue to hold on to your long positions in Bharat Forge, Century Textiles, Dr.Reddys, Hindustan Lever, Maharastra Seamless, NDTV, NTPC, Punj Lloyd, Reliance Industires & Tata Power. Continue to hold short positions in Tata Chemicals.