Trading recommendations - Feb 12, 2005

HDFC Ltd - This high relative strength scrip was recommended at the 800 levels and a liberal stop loss which it is nearing. Though we would like to modify the stop loss deeper down, and even suggest further buying as the support floor price is lower, our upward target remains intact. Notice the high relative strength in the counter at 577 ( where 100 = base ). We recommend a buy on all major declines.

Your call of action -

• Investors / cash segment players - hold existing positions and add on declines to the 760 - 765 levels. Maintain a stop loss at the 740 - 750 levels and expect to book profits at the 850 + levels in the medium term in a conducive market.

• Aggressive F&O traders - buy the March futures ( quoting at Rs. 9 premium to cash ) on declines to the 780 - 785 levels and hold with a liberal stop loss at the 740 - 745 levels. Expect profit taking at the 820 - 830 levels in a conducive market in the medium term. Options players do not a choice as the options segment is illiquid on this counter.

• Derivatives contract size - Market lot = 600 shares. F&O margin = approx Rs 75,000 (subject to change daily )

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