Dated 2nd November, 2008

Indices recovered sharply from the lows they touched on the first trading day of the week. It was a sharp recovery and both Sensex and Nifty recovered nearly 25-30% from the lows. The bounce back was lead by Metals, Technology, Auto, Infrastructure and Realty stocks. Almost all sectors made significant gains due to short covering. The most prominent among gainers is Reliance, which gained nearly 35% during the week. Unitech, Hindalco, Sterlite, Tata Communincation, ICICI Bank and M&M were the other gainers all richer by more than 25%. Sun Pharma, Ranbaxy, Suzlon, Dr Reddy and SBI were among the losers.

A bounce back was necessary for the markets and it happened at the most opportune time ie.. on Diwali. This pull back may take Nifty to 3100 and may be even 3400. On the downside 2760 provides a strong support and Nifty is likely to hold this support for a couple of weeks, at least. The overall sentiment going into the next week is positive and hence one should avoid taking short positions in the immediate future. We may witness stock specific movements this week and hence traders are recommended to cautiously trade long on dips. If Nifty manages to climb to the levels of 3400, it will be a right opportunity for medium term traders to start building short positions and even investors to get out of their holdings. Short term/intraday traders may go long on falls in specific stocks and medium term players should look for building short positions on sharp rallies. 3400 on Nifty is an ideal level for going short and hence we recommend traders to wait for a week of upside and then build medium term short positions.

BUY
Reliance Comm @ CMP Tgt 242, 258 SL 205
IVRCL Infra @ 83-85 Tgt 94, 100 SL 80
Tata Communication @ 455-460 Tgt 482, 500 SL 440
Chambal Fertilizer @ 43.50-44 Tgt 47, 50 SL 42.80
GTL Infra @ 37.8-38 Tgt 39.5, 41.20 SL 37

SELL
Satyam Computers @ 316-320 286 264 335
Sun Pharma @ 1170-1180 1040 1000 1200
GVK Power @ 12-12.30 10 8.60 13
Sterlite Inds @ 310-320 260 220 340