Trading recommendations - March 27, 2005

ITC - this FMCG major was recommended by us as a market out-performer and has lived up to our expectations. The upward sloping trendline is providing a reliable support and the higher tops formation is confidence inspiring. To complete a bullish picture, a breakout above the 1400 levels will propel this stock into a new bull orbit with zero resistance on the upsides. Short term traders may note the 1275 levels as being threshold levels for short term sentiments. The 1250 levels lower down offer more serious support for the medium / long term investors. The momentum oscillator is pointing towards an upmove and we feel the rally past 1350 with volumes exceeding 4,00,000 will be an excellent buy indicator for bulls.

Your call of action -

• Investors / cash segment players - buy the scrip at the current levels and leave room for averaging till the 1280 levels. Maintain a stop loss at the 1250 mark and expect to book profits at the 1375 / 1380 levels in a conducive market in the short / medium term. Longer term prospects are extremely positive, especially after the 1400 levels are surpassed with higher volumes.

• Aggressive F&O traders - Buy the April futures at the 1300 levels and hold with a stop loss at the 1275 levels. Expect to book profits at the 1355 - 1365 levels in the short / medium term. Longer term outlook remains even higher.

• Derivatives contract size - Market lot = 300 shares. F&O margin = approx Rs 64,000 (subject to change daily )

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