Trading recommendations - May 08, 2005

ITC - this scrip has been a prolific recommendation from our side and also proved to be a star performer. The scrip has appreciated from the 1280 levels around budget time to hit a new lifetime high at 1477. The high relative strength of 278 vis-a-vis the Nifty ( where 100 = base ) imbibes confidence and the scrip is in a constant rising tops and bottoms formation. The short term moving average is proving to be a major support and is a bullish indicator. The oscillators are in a buy mode. We recommend a buy for the patient investor / trader.

Your call of action -

• Investors / cash segment players - buy the counter at current levels in small / medium sized lots and average downwards till the 1350 levels. Maintain a stop loss at the 1275 levels and expect to book profits at the 1650 - 1700 in the medium term. Longer term players can expect higher levels.

• Aggressive F&O traders - Buy the June futures at 1440 levels and average downwards to the 1400 levels. Maintain a stop loss at the 1365 levels and expect to book profits at the 1565 levels. Options players do not have much of a choice due to liquidity problems on this counter.

• Derivatives contract size - Market lot = 150 shares. F&O margin = approx Rs 36,000 (subject to change daily )

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