Market Outlook and recommendations for week starting - September 03, 2007

We will start off by looking at how the American markets closed over the weekend. Its a known fact that the US markets drive most of the world markets these days. The dow crossed the short term downward trading channel and made it first attempt to move up. It has closed above the trading channel and is very close to the important 61.8% Fibonacci retracement level (13495). Once this is taken out, we could well be heading to new uncharted territories. A lot depends on the Fed's important meeting on the 18th of September. If the Fed screws up on its decision on interest rate, all hell will break loose. Until then trade with confidence on the long side.

The week ahead
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NIFTY - NIFTY is the most crucial resistance zone now between 4400 and 4500. There is an important of 4470 which needs to be taken out decisively. With the recent corrections many stocks have become potential "BUYS". Also with good global cues to start the week, my opinion is we are in for another excellent week where the bulls will rule over the bears. Take long positions in NIFTY futures once 4470 is taken out in spot. Keep booking regular profits over the week. In my opinion, trade for the week, hold your positions till friday to book profits on friday, 7th of September.

The following stocks are expected to nudge up in the week ahead. I am positive on the week ahead and we will continue to remain long on these positions

Arvind Mills - View - Bullish. BUY above 48.5 target 49.5 and 51+. Stop loss 47. This stock has bottomed out in the recent times and is poised for upmove in the short term.

Ashok Leyland - View - Bullish. BUY at 38.1 target 1 - 39 target 2 - 40.5+, Stoploss - 37.
The stock has closed above 61.8% Fibonacci retracement and is bullish

Escorts - View - Bullish. BUY Above 96.5 Target 104. If 106 - 108 zone is taken out this stock will fly. Stoploss 87.
Escorts has seen a spurt in buying the recent week with good volumes and there could be a slight correction before it moves up further. So trade accordingly. I am giving a deeper stoploss to wade through a slightly possible correction.

IDFC - IDFC broke out from its trading channel on friday and is heading towards 137 now. BUY with stoploss at 120. There is a minor resistance at 130. The stock seems to have gathered enough momentum to move up now.

TCS - Looking to break out from the downward move. It has been hammered in the recent past due to the rupee fluctuation. BUY On close above 1075. Targets - 1100 and then 1123.

Reliance Communication - Good resistance at 544. Move above 545 will take it to 554 first. If 554 is taken out, we could well be heading towards 600 levels. (There is a minor resistance at 560).

State Bank of India - State Bank of India is about to move up strongly. It is already in uptrend. BUY on break of 1617 and target 1700+. Stoploss 1570.

Tata motors - On an uptrend. On crossover of 712 target 750. Stoploss - 695

Zee Telefilms - Zee has crossed a crucial resistance at 301 on friday. It is now headed towards to 317+ levels. BUY and hold till end of the week. Above 317, it will head towards 324+ levels. Stoploss 300.

IFCI - Heading towards a target of 70. (May not be this week)

The week ahead will be a good week for both derivatives trading and positional buying. All stocks recommended above can be bought for a week in the derivatives segment.(Important note: Prices quoted above are spot prices). Positional buying can be made with a 2 - 3 weeks view.

Do visit the blog regularly, I would update more information during the course of the week as I feel stocks become ripe to buy or sell....