Friday, January 28, 2011

Today's Bse Nse Stock picks

Nifty, Bank Nifty & M&M

Current: 5,604 (Feb future: 5,630),
Target: 5,475 (3-session target)

The index saw a new 2011 low and also broke below its own 200 Day Moving Average. This is not confirmed yet but the pattern suggests a drop till 5,475 in the next three sessions. A bounce could pullback till 5,750. Simplest is a short futures position, with a stop loss at 5,650. A preferred strategy is the bearspread of long 5,500p (82) and short 5,400p (55) - cost:27; Maximum return: 73. A "zero-delta" long-short strangle of long 5,500p (82) and long 5,700c (94) and short 5,400c (55) and short 5,800c (55) costs 66 with breakevens at 5,434; 5,766. It's low-risk if you wish to hold till settlement..

Current: 10,676 (Feb futures 10,732),
Target: 10,500 (10,300, 3-session target)

The financial index broke downside targets (10,800) set on Jan 24 closing. If support at 10,600-10,625 is broken, secondary support at 10,475-10,500 will be tested. There's a good chance of a drop till 10,300 in a three-session timeframe. Keep a stop at 10, 825 and short. Add to the position between 10,550 and 10,600. Either clear at 10,500, or hold with a target of 10,300 if you can wait three sessions.

Current Price: Rs 733,
Target Price: Rs 695

The stock is at a key support of Rs 725-735 after a two-session drop from Rs 799. It if falls below Rs 725, it could till Rs 680-690. Keep a stop at Rs 745 and go short. Add to the position between Rs 715 and Rs 720. Start booking profits below Rs 695. If the Rs 745 stop is broken, be prepared for a jump back to Rs 770.          

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