DETAILS OF THIS WEEK TRADING CALLS 31.3.08

Trending with global markets, Indian indices posted their biggest weekly gains in five months during the week ended. On the BSE, the Sensex gained 1,376 points to close at 16,371 and the Nifty on the NSE logged 368 points to end at 4,942.

Moving in tandem with frontline indices after a long time, both the CNX Midcap and the BSE Smallcap indices also gained eight per cent plus. Market breadth clearly reflects that worst may be over for present. Rise in commodity prices was seen impacting inflation numbers. While inflation and GDP are the most talked about numbers, market players feel fourth quarter results will determine near term direction of markets.

Though decoupling theory has been discarded, some savvy old timers believe that domestic consumption and investment story as far as real economy is concerned will emerge a winner in long term. Do not be too obsessed with global picture and focus on Q4 results and domestic events.

With the Left Parties showing red flags to IndoUS nuclear deal and inflation becoming primary concern markets are likely to remain range bound till macro economic picture improves and monsoon prediction is available. For the week ahead, chartists predict trading bands of 15,680 to 17,360 for the Sensex and 4,580 to 5,240 for the Nifty. Expect stiff resistance to the indices on upside at 16,800 and 17,200 and 5,100 and 5,250. On downside support is evident at 16,080 and 15,800 and 4,820 and 4,680.

Cut all short term longs if indices trade below 15,860 and 4,760 levels. Do not be too exuberant and adopt cautious approach as markets are not out of woods yet. With onset of results season, adopt stock specific approach for near term trading. Buy when stocks have few friends. Be patient. Don't be rattled by fluctuations. Rational and clear thinking are what's needed to succeed as an investor.

F&O segment D espite thevolumesended week being settlement week, trading continued to be moderate. Strong recovery in the markets was not reflected in volumes indicating that "confidence" level is still low. Punters were seen preferring to cover most of the shorts, and fresh build up in long positions resulted in Nifty futures trading at premium to spot. Key resistance level for Nifty traders is 5,100 points. One interesting observation is active trading in Nifty 5000 strike December call option and Nifty 4300 December put option. Barring couple of sectors nearly all the sectors witnessed good buying interest from lower levels.

Side counters like HDIL, Edelweiss, GBN and others scored impressive gains. Modest buying interest was seen in technology, metals, capital goods and power counters. Banking counters were seen facing resistance on every upmove. Reports of most banks likely to take a hit in their investment portfolio and slowdown in credit disbursal are clouding the picture.

Ahead of Q4 numbers, tech counters are witnessing good warehousing. Stay invested in Infosys, Wipro and Satyam for further gains. Media stocks are attracting renewed buying. Buy on declines Adlabs, GBN and Zee. Surprise move in WWIL not ruled out. Buy for target price of Rs 55. Cement counters are beginning to show comeback gains. Buy ACC, Ambuja Cements and Birla Corp. Among the side counters, looking good for gains are Idea Cellular, Redington, Praj Inds and Gitanjali. Issuance of petro bonds may give fillip to PSU oil refiners like IOC, BPCL and HPCL.

Network18 which has acquired Infomedia India is likely to rename the company as Infomedia18 and also leverage the substantial printing capacity of the company for launch of specialist magazines. Already a JV with Forbes Media has been to launch a fortnightly has been inked. Buy Infomedia for medium term target of Rs 350. ¦ Jain Irrigation Systems is planning to expand into food processing, piped gas and water management. A little known fact of the company is that it is the world's largest processor of mangoes and pomegranates. Buy on declines for steady gains in medium term. ¦ Edible oil player Sanwaria Agro Oils has reportedly undertaken wind power project to improve operating margins. The company also manufactures Lecithin, an emulsifier used in edible oil industry. With sales rising by an average of 101 per cent over past five quarters, PAT will improve the valuation. Buy at current levels for good long term gains. ¦ Select stocks like Prime Focus, Allied Digital, Subex, Gati, and Electrotherm have witnessed spurt in volumes. Prime Focus operates in niche segment of media sector concentrating on high class processing and digital arena. Post recent correction the stock looks good bet for short term price target of Rs 825. Subex is reportedly back on growth path and has restructured for better performance. The company is focusing on branding and improvement of margins. ¦ Electrotherm is reportedly expanding into related areas. The company is reportedly making QIP at attractive price. Good results and booming user industry make the stock good bet on every decline. ¦ Allied Digital has recently launched remote management services. Excellent results and reports of inorganic growth by acquisition route make the stock good buy on declines.