Outlook for the week ending 21Sep07

Outlook for week ending 21Sep07:
It is extremely difficult to predict the direction of the markets in this week with the fed coming up with the decision on the rate cut. All the analysts are of the opinion that the fed will definitely cut the rate when it meets on the 18th of September. Last week the markets across the world have firmed up on this expectation. However, the Indian markets gave up substantial gains in the second half of Friday making the technical charts look weak. Most of the stocks have shown signs of reversal. The banking stocks appear to be weakening. It is advisable to remain in cash for at least 60% of your portfolio. The political situation is also not improving with new issues coming up.

The problem with the Northern Rock in UK is another example of sub prime concern. Remember that if the fed decides to cut the rate, it is the acceptance from them that there is a huge problem in the sub prime market. On an immediate reaction the markets might bounce back but will gradually drift down. If the fed decides not to cut the rate then, it is against everybody’s expectations and the markets might fall. However the Indian markets are not much affected by the sub prime problem and I do not foresee Nifty coming down below 4365 on a worst case scenario. For this week the Nifty should face resistance at 4530-4615-4650 and should take support at 4425-4365-4260.

Futures Trading Calls:

Sell Bank Of India if closes below 239 for target 222.
Sell Bata if closes below 174.50 for target 167.
Sell Educomp if closes below 2865 for target 2725.
Sell GE Shipping if closes below 224 for target 211.
Sell IOB if closes below 137 for target 128.
Sell Kesoram Industries at current levels for target 500.
Sell Neyveli Lignite if closes below 94.50 for target 88.
Sell Reliance Capital if closes below 1375 for target 1310.
Sell Rolta if closes below 444 for target 430 and 410.
Sell Sesa Goa at current levels for target 1980.

Cash Market Calls:

Buy Aftek at lower levels with stop loss 68 for target 150 in 6-9 months.

Points to Note:
1. All calls are for short term trading and should ideally hit the target within 2-4 weeks. Any calls other than short term calls will be specifically mentioned.
2. The calls provided on day 0 holds good for the next 4-5 trading sessions if entry price does not cross the mentioned levels on day 1.

Disclaimer: The recommendations provided would be purely on my personal opinion and doesnot reflect any fund house interest or my personal holdings. I would not be responsible for the loss in trades undertaken based on my recommendations.