Trading recommendations - Oct 18, 2004

SBI - another banking stock that we recommended as a short last week and has performed as per our expectations. The scrip makes a similar chart pattern as Bank of Baroda and once the 460 levels are violated, an accelerated fall cannot be ruled out. We recommend a short sale on the counter on advances. Traders may note that the recent top has been lower than the previous top, should the previous bottom be violated, a weak forecast is likely for this scrip.

Your call of action - .

• Investors / cash segment players - exit delivery holdings on advances to the 475 mark in staggered lots.

• Aggressive F&O traders - short the October futures on a breakdown below the 463 mark and hold with a stop loss at the 469 levels. We expect a profit target of Rs 450 in the near term. Income conscious players may sell the Oct 520 calls at a suggested premium of Rs 2.

• Derivatives contract size - Market lot = 500 shares. F&O margin = approx Rs 42,000  (subject to change daily )

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