FreeForAll: SENSEX, NIFTY 18/05/2006

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SHARE NEWS 18th May 2006

SENSEX RECOVERED BRIGHTLY AND GRADUALLY CONSOLIDATED 344 POINTS TO END THE DAY AT 12218 WHILE NIFTY GAINED 112 POINTS TO END THE DAY AT 3635.

BANK STOCKS STOLE THE SHOW BY THE END OF THE SESSION AND METAL STOCKS ALSO STAGED A SMART RECOVERY.

RUPEE MADE STRONG COMEBACK GAINING 32 PAISE AGAINST THE DOLLAR TO CLOSE AT 45.20.

ASIAN MARKETS SHOWED MOVEMENT UPWARD WITH TOKYO’S NIKKEI MOVING UP BY 149 POINTS.

MARKET ANALYSIS

The market bounced back smartly after the precipitous fall on the previous two sessions. However, given the susceptibility of this market towards international trends, it could surrender a portion of its gains today. The international markets have tumbled once again following high inflation data stroking fears that the Fed could raise interest rates once again.

Traders who are sitting on profitable long positions may lighten positions at the open and wait for a dip to reenter. The long-term uptrend remains intact but the intermediate timeframe trend may have turned sideways. This implies that traders may have to take contrarian views in the short-term.

INDEX MOVEMENTS

The Nifty forged a smart rally to recover the losses recorded in the last two trading sessions. It is likely to move back to the top at 3774. Short term traders can liquidate positions partially when the Nifty approaches 3690. The next resistance that the Nifty can face is at 3748. The Nifty is likely to have buying interest on dips to 3574.

The Bank Nifty will be able to sustain its bullish momentum if it holds above 4876. Traders may contemplate on long positions only above this level.

MARKET NEWS

· HCL, Microsoft enter strategic alliance

· Ranbaxy signs in-licensing pact with Eurodrug

· Suzlon to raise Belgium gear box capacity

· Tata Tea may buy Belgium tea and Moroccon sugar firm: Sources

· Eveready Inds FY06 net profit at Rs.79.6 crores

· GAIL to buy 3 LNG spot cargoes from Algeria

· L&T forays into dredging business

· Lupin Q4 net at Rs.50.19 crore

DELIVERY PICKS

*SCRIP*	*BUY ABOVE*
*GE SHIPPING*	*271.00*
*ITC*	*205.50*
*MTNL*	*201.50*
*TATA STEEL*	*618.50*
*VSNL*	*476.00*

MID CAP STOCKS

*SCRIP BUY*	*ABOVE*
*BATA*	*316.00*
*BOMBAY* *DYEING*	*986.00*
*REL INFRA*	*904.00*
*BSEL INFRA*	*101.65*
*GVK POWER*	*339.70*

SMALL CAP STOCKS

*SCRIP*	*BUY ABOVE*
*GUJ SIDHEE CEM*	*23.10*
*HIND MOTORS*	*54.65*

LIQUIDATE

*SCRIP*	*SELL BELOW*
*BIOCON*	*455.00*

FUTURE OPTIMISM

*SCRIP*	*VIEW*	*STRATEGY*
*ARVIND MILLS FUTURES*	*BULLISH*	*BUY > 91.85 TARGET 92.95 – STOP < 90.75*
*HINDALCO FUTURES*	*BULLISH*	*BUY > 221.75 TARGET 225.25 – STOP < 218*
*MTNL FUTURES*	*BULLISH*	*BUY > 199 TARGET 202 – STOP < 196*
*REL CAP FUTURES*	*BULLISH*	*BUY > 496.25 TARGET 605.50 – STOP < 593.50*
*VSNL FUTURES*	*BULLISH*	*BUY > 457.50 TARGET 466.75 – STOP < 448*