Trading recommendations - May 01, 2005

ITC Ltd - This scrip was recommended on multiple occasions in our newsletters and has lived up to our expectations. The scrip has confirmed a breakout into a new high and is unlikely to witness severe resistance at these levels. Technical traders may note the high relative strength of 271 vis-a-vis the Nifty ( where 100 = base ). The oscillators are showing a rising trend and we expect the scrip to test higher levels and lead the market rally from the front.

Your call of action -

• Investors / cash segment players - Start buying small / medium lots at the 1400 - 1420 levels and leave room for averaging till the 1325 levels. Maintain a stop loss at the 1280 mark and expect to book profits above the 1650 levels in the long term in a conducive market scenario.

• Aggressive F&O traders - buy the June futures at lower levels of 1400 - 1410 ( currently quoting at Rs 22 discount to cash ) and average lower till the 1360 mark. Maintain a stop loss at the 1330 and expect to book profits at the 1470 - 1490 in the short / medium term. Long term traders can expect significantly higher levels.

• Derivatives contract size - Market lot = 150 shares. F&O margin = approx Rs 37,000 (subject to change daily )

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