Trading recommendations - March 07, 2004

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Satyam Computers - This stock is mirroring the chart pattern of Infosys as depicted above. An identical downward sloping channel is seen and resistance at higher levels will be seen at the 322 - 324 levels. Should the scrip be unable to surpass these levels even in a firm market, expect a slide below the 300 mark in the next down phase. The oscillators are showing a weakness in the undertone for this stock and the fall is likely to get accelerated below the 305 mark. We recommend a sell / short sell on the counter.

Your call of action - 

• Investors / cash segment players - Sell the counter at the 315 - 320 mark. Expect a price of 290 - 300 in a few weeks in a conducive market where you may buy back your stock. Protect yourself with a stop loss at the 328 mark.

• Aggressive F&O traders - short the March futures on advances of 312 - 314 levels and maintain a stop loss at the 319 levels. The first profit taking point will be the 304 levels and thereafter, the 295 levels where shorts maybe squared up completely. Options players may buy the March 290 puts in minimum lots at a suggested premium of Rs 6.

• Fixed income strategy - We suggest a short straddle strategy wherein traders may sell the March 270 puts and 360 calls at suggested premia of Rs 3 and Rs 2.50 respectively. 

• Derivatives contract size - Market lot = 1200 shares. F&O margins = approx Rs 83,000 ( margins subject to change daily ).

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