Investors need to be cautious

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To start online CNG supply in Noida within this month
To set-up 50 new CNG stations by mid-2010
Will look to tap entire NCR area for gas distribution
Tied up for gas from KG basin as well: IGL
Drop in ARPUs will not necessarily hit profitability
Remain interested in global acquisitions : Akhil Gupta
No 'desperation' to get into 3G if bid prices irrational
Drop in realty rentals to help enhance retail presence
All units currently operating at 100% utilisation
Goldman cuts China GDP forecast to 6%
Tariffs down 10% in last 5 yrs; don't see further drop
Depreciation in rupee negating drop in product prices
To focus on domestic mkts in 2009: Gautam Singhania
Industry taking a hit on exports: Gautam Singhania
Buys 10% stake in Kalyani Net Ventures
Don't expect any slowdown in power biz through 2009
Will buy firms that can't achieve financial closure
Sitting on enough cash to pick up stake in new projects
Budge Budge unit to be on-stream ahead of schedule
Seeks increase in duty drawbacks and DEPB by 3%
Wants a minimum ceiling of 7% on export credit
Needs an additional 2% interest subvention
Bags order from Southern Railways worth Rs.110cr
India fairly insulated due to robust domestic demand
Pvt held business owners with 83% level of optimism
Travel and tourism remains relatively insulated
Majority of countries view 2009 as a difficult year
Fitch withdraws rating on Jindal Stainless
L&T bags order worth Rs.1100 crores
Key clients confidence is shaken in Satyam

Updated: 19/08/2008 | 11:57 AM IST

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Mandar Jamsandekar

Tuesday, August 19, 2008 (New Delhi)

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Last week we had the markets, which finally exhausted their up-move after hitting resistance at approximately 15,500 levels for the Sensex. This is a crucial level, which we have been talking for the last many weeks.

Levels for the indices

BSE Sensex      Close: 14724.18         NSE Nifty            Close: 4430.70

Major Support     13727 – 12514               Major Support      4159 – 3790

Major Resistance 15430 – 15579             Major Resistance   4529 – 4650

This resistance is formed by two major technical factors –

1) Resistance from a falling trend line joining all the tops from January 2008

2) Resistance from a neck line of a head and shoulder pattern

In the month of May 2008, when we had a similar formation, the markets had fallen by 5000 points approximately on the Sensex in the next two months. During that period the upward correction was roughly for 3000 points in the same way that we have seen recently.

The above-mentioned technical factors do not suggest that the markets have bottomed out, nor do they suggest that it is the end of pessimism. Also, nowhere do they tell us that the India story is intact.

For the coming week, we need to watch the highs made by the indices last week as crucial resistance levels. For the Sensex at 15,430 – 15,579 and for the Nifty at 4529 – 4650 levels. At all higher levels, renewed selling can be observed. On the lower side the markets are expected to slide to test support levels. For the Sensex support exists at 13,727 – 12,514 and for the Nifty at 4159 – 3790 levels. The trading is going to be extremely choppy. The August derivative contracts expiry is one reason, which can prevent the markets from sliding immediately. But as of now, upsides are restricted for sure.

Hold a low profile…

STOCK RECOMMENDATION FOR THIS WEEK

Stock Close Advice

Polaris (Futures Strategy) 109.90 (Futures Close on NSE)

Lot Size = 2800

ROI = 64% Buy August Futures for Momentum

Stop Loss – 104.90

Target – 124 – 136

Margin Requirement = Rs.61544 (considering 20% margin)

Risk = Rs.14000

Returns = Rs.39480

Time Frame = 5 Days

Polaris (Options Strategy) 108.80 (Cash Close on NSE)

Lot Size = 2800