Create a Strangle on Nifty for Unlimited Gains with Options.....

There is a possibility of huge swings of market in either way in connection with the Budget. If you want to en cash on these violent moves, the following Strategy on Options can be considered.

Create strangle on Nifty. Buy Nifty March 4700 Puts @ Rs.95.00 at the same time buy Nifty Calls March 5100 @ Rs.52.00

Unlimited profits on huge movements from these strategy.

Nifty Levels to Watch Out !

Technically the market is showing a lot of weakness, by drifting lower and not showing strength above 4950 & 4965.
However, there are a lots of shorts in the market, and is near the oversold territory. If any trigger comes from the Budget, it can spark an upward breakout.
Since the market is equally poised, the technical levels of 4950 & 4830 are very crucial.

Buy Farm, OMC, Education, Non Conventional Energy & UID related Stocks for Pre Budget trading

Pre budget buys can be those sectors benefitted by budgetory proposals.
One sector which is expected get favourable treatment is Farm- Tractor, Irrigation, Pesticides etc . Top picks in this segment are Escorts, TAFE, Mahindra, HMT, Jain Irrigation, United Phospherous etc.
Education is another area of possibility- Educomp, Edserv, NIIT, APTECH, NIIT Tech are good picks in this category.
OMC's may get some sops from the budget and hence IOC, BPCL, HPCL etc can be considered.
Unconventional energy is an area of focus and companies like Suzlon & Moser Bear stand to benefit.
Bartronics is a good buy considering the potential to get big orders from UID project, which is a pet project of the Govt.

Pre Budget Rally on cards..

Watch out for Nifty Levels of 4965, if this is convincingly breached, we can have a pre budget Target of 5000-5050 levels. However, Nifty is facing stiff resistance around 4930 and next resistance being 4950.
On the downside, if Nifty is going to close below 4830, it is going to be a definite bearish sign.
Hence buy only on Nifty crossing 4960.

Ride the tide of OMC's! BPCL Saors !

We have earlier recommended to buy HPCL, BPCL & IOC- All are up nicely today.BPCL had surged past Rs.600 to touch a day high of Rs.613. HPCL touched Rs359 & IOC Rs.326.

BPCL's Oil Discovery report as well as speculation of decontrol of petro products are fuelling the rise in share prices. It is worth taking a ride along with this tide.

Important Technical Levels for Nifty

Market had closed strong yesterday, but still below the bullish level of 4965 on Nifty .
Strong resistance can be found towards Nifty 4930 & 4950, and if the market breaks it, it can surge past 5000.
But if Nifty drifts lower, it will send weak signals. A possible breach of 4830 will give a target towards 200 DMA of around 4700 now. If DMA is breached, the downward target get lower to around 4300 levels.
Hence watch the trend and trade with caution. Budget expectations & Global Clues will decide the course for Nifty & Sensex.

Tata Steel moving up, Book Partial Profits

Our Intra day call Tata Steel nearing Rs.551, consider booking partial profits.

Tata Steel for Intra day

Tata Steel may be bought if it sustains above 545 with a target of 555 intra day

Watch for Nifty 4850 levels

Going long on Nifty futures is recommended above 4850 for a target of 4900+
Going Short on Nifty futures is suggested with a target of 4750 if Nifty sustains below 4800

Kalindee Rail up 5%.

Our recommendation of buying rail infra companies are proving profitable, even amidst sell off in market.
Today also they are in Green, and Kalindee Rail is up 5% @ Rs.217.5

Stimulus Unwind likely to start

High inflation & High IIP may prompt the Govt to unwind the stimulus measure around budget. Negative sentiment for market.

Inflation on an upward spiral

Jan2010 WPI Inflation figure stands at 8.5%. This is against the expectation of 8.2% and Dec09 fIgure of 7.3%, and are above estimates. Inflation is feared touching double digit of 10% by March 2010. A negative for market sentiment.

IIP Grows to a 16 year High!

IIP growth rate for Dec 09 was the fastest in the past 16 years.India's factory out put surged by 16.8%.It has beaten the planning commission's own estimate of 13% and market expectation of 12-12.5%.
Auto sector grown by 82.2%, Chemicals by 29% and consumer durables by 46%.
Mining & Electricity sector had grown by 9.5% and 5.4% respectively.

While this bodes well for the investor confidence, the fear of Govt.'s withdrawal of stimulas will keep the share market in check. But all in all this is a big morale booster, and long term prospects had distincly improved.

Texmaco & TWL on Fire!

Texmaco up @15% and Titagarh Wagons up @17%.
Excellent Pre budget Rail Picks!

Rail Related Stocks Zooming 4 to 12%

We are happy to reproduce our post dt 7.2.10, wherin we have recommended to buy Rail related stocks. Today all of them are up- Up between 4 to 12%

As pointed out in todays morning post,Rail related stocks are seen in action ahead of Rail Budget.
The stocks to be watched closely are;
1]Titagarh Wagons[TWL]- CMP-400
2]ABB-CMP-784
3]BEL-CMP-2002
4]BEML-CMP-1100
5]KERNEX MICRO-CMP 183
6]KALINDEE RAIL-CMP 205
7]STONE INDIA-BSE
8]Texmaco-CMO-141
Selective short term buying can be considered, if markets hold firm above 4766 NIFTY

Market Crosses the Resistance of Nifty 4826

In the opening trades the markets crossed the resistsnce levei of Nifty 4826. If it can sustsain and close above,there is a good chance of a sharp upmove to 4950-5000 levels, as we have indicated for a pre budget rally.

Rail Stocks on a move...

As we have recommended, Rail related stocks are moving up ahead of Rail Budget.
The current rates are
Texmaco-Rs.154
BEML-Rs.1115
TWL-Rs.426
Kernex Micro-Rs.182
These are expected to strenghten further

Oil Marketing Cos.

As the fuel price revision is imminent, OMC's such as HPCL, BPCL & IOC will be in action.Watch out those scrips.

Nifty 4830 / 4660 levels very Critical

Indian Markets had shown weakness despite stronger global clues on 11.2.2010. It could not hold on to the higher level it touched in the opening hours.Market should decisively close above 4830 for Nifty, for an upward breakout. Otherwise it is likely to drift lower and test the 200 DMA around 4660 levels.
The week is truncated as Friday is a Market Holiday.IIP figures of Dec 09 are expected to be announced on Friday which are expected @12% vis a vis 11.7% of Nov09.

PSU's on Fire

Profitable PSU's are up again on Bonus Hopes.
Our picks Engineers India & Hind Copper rallied very well today, with Hind Copper on upper freez @10%.Fresh momentum is back in all the PSU Stocks
Stocks to watch are NMDC & STC.

Nifty Manages Above 4800

Nifty Managed to stay above 4766, which is a good sign.Markets are likely to trade above 4830 tommorrow, which is essential for gathering further momentum. Shortcovering is likely to add to the momentum

Market Struggling below 4766 Nifty

Markets are still [9.40AM, 9.2.10] trading weak, and are below the Nifty Level of 4766.
Unless it exhibits strength above this level, there is a tendency to make a lower bottomS & lower topS. Once market take a decisive break above 4766 fresh buying can be considered, and the rally will be fuelled by huge short covering.

Rail Related Stocks to be in action

As pointed out in todays morning post,Rail related stocks are seen in action ahead of Rail Budget.
The stocks to be watched closely are;
1]Titagarh Wagons[TWL]- CMP-400
2]ABB-CMP-784
3]BEL-CMP-2002
4]BEML-CMP-1100
5]KERNEX MICRO-CMP 183
6]KALINDEE RAIL-CMP 205
7]STONE INDIA-BSE
Selective short term buying can be considered, if markets hold firm above 4766 NIFTY

Pre Budget Rally on Cards

The immediate crucial level for the Nifty is 4766. A close above this level on 8.2.10, will signal a rally upto 5000 till budget.
Otherwise it can go down to around 4650 levels to test the 200 DMA.In that scenario, it is most likely to find a support and bounce back.Short covering also is expected to aid the rally.If market closes below the 200 DMA,it is very bearish and long term trend will become negative. However, this is still unlikely.
Stock specific short term long positions can be considered if market manages above 4766 Nifty levels.
Rail related stocks like BEML,Stone India etc can climb up till Rail Budget.
OMC stocks like BPCL, HPCL & IOC can be on the uptrend on hopes of Petrol price decontrol, price hike news of petro products and subdued price of crude oil.
Agricultural & Export oriented companies are expected to benefit from the Union Budget as is the case with Education related companies.
We will try to provide more stock specific analysis in the coming days.