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TRADING STRATEGY FOR 5^TH FEBRUARY 2010

(Based on technical by O P AGARWAL)

Markets plummet on heavy sell off

The market after opening flat to negative yesterday remained under selling pressure and progressively slipped further during the day as the market participants seemed wary of making any fresh position instead indulged in heavy selling across the board on weak global cues. I T, metal, reality and banking stocks were the worst sufferers yesterday which aided in pulling down the indices to the lower levels. The Sensex after making a low of 16188 in the final hour of the trade yesterday finally closed the session at 16224 losing a whopping 271 points. The Nifty too lost substantially to close at 4845 losing 86 points a few points off the day's low of 4832. The market breadth remained weak owing to heavy sell off across the board in afternoon trades as out of 2899 stocks traded on BSE, 2003 stocks declined. 836 stocks posted gains and 60 stocks ended flat. Meantime, the U S markets lost heavily yesterday with DOW losing more than 260 points and the NASDAQ more than 60 points on the growing belief that the global economy is weaker than many investors expected and is likely to stop the U.S. labor market from rebounding in the coming months. Readers are advised to trade with caution in view of uncertain market trend.

NIFTY FUTURE (Last close 4833.60)
The counter after gap down opening yesterday on weak global cues remained range bound till noon when sustained selling at all levels pushed the NF progressively down which finally closed the session losing a massive 92 points after touching a low of 4824. The counter finally closed with negative bias and may slide further to 4745/4712 once it trades and remains below its weekly support at 4788. The counter may face resistance at 4858/4875. 

ABAN OFFSHORE FUTURE (Last close 1173.00)
The stock after moving range bound during the past five trading sessions closed yesterday losing over 2% under selling pressure. The stock may further slide to 1154/1143 once it trades and remains below 1166.50. The stock may face resistance at 1181.50. 

TATA POWER FUTURE (Last close 1273.00)
The power stock has remained with negative bias since last week and closed yesterday losing over 2% with high volumes. The stock may slide further to 1259/1252 once it trades and remains below 1268.00. The stock may face resistance at 1281.75.

ABB FUTURE (Last close 790.95)
The engineering stock after consolidating during the past four trading sessions closed yesterday losing over 2% with negative bias on profit taking at higher levels. The stock may yet lose on profit booking at current levels and may slide to 777/769 once it trades below 786.00. The stock may face resistance at 797.75.

DEAR READERS,
PLEASE WATCH THE MARKET TREND AND USE YOUR
OWN DISCRETION BEFORE TAKING A TRADE.

Protect profits with trailing stops and cut losses fast.
Avoid adding contracts in loss making trades

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