Trading recommendations - July 02, 2005

GSK Pharma - this scrip has been recommended earlier vide our edition dtd. Jan 16 &30 and June 26, 2005.Click here to view the previous recommendations. As we had accurately forecast, the breakout above the 800 levels has seen wonders accomplished on this counter in terms of week-on-week appreciation. We feel the re-rating of the pharmaceutical counters is in line with the nervousness associated with historical highs in the indices. Perceived as defensive plays, pharma scrips may remain in the limelight. We advocate holding long positions if any, and adding on declines.

Your call of action -

• Investors / cash segment players - fresh long positions maybe initiated at the 830 - 835 levels and averaged lower till the 795 levels. A stop loss is advocated at the 765 levels and a target of 885 - 890 is forecast in the short / medium term. Over the long run, we anticipate the all time high of 975 to be surpassed.

• Aggressive F&O traders - buy the July futures ( quoting at Rs 8 premium to cash ) on declines to the 825 - 828 levels and hold with a stop loss at the 805 levels. Expect to book profits at the 885 - 895 levels in the medium term.

• Derivatives contract size - Market lot = 300 shares. F&O margin = approx Rs 39,000 (subject to change daily )

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