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Trading strategy for January 14, 2002

Outlook: It was a day driven by panic in the market. Strong counters recovered sharply to close on a firm note. Among the technolgy based stocks, Zee Telefilms and Digital Global are the strongest. Chances of a possible rally in the technology based counters remain. At the same time, it is very likely that the bounce is accompanied by a high level of volatility. On the whole, it is advisable to take a long position only after much consolidation.

BSE Sensex: The level of 3300 would act as immediate support for the index. Index is likely to consolidate at these levels.

Digital Global: The stock fell the least in the panic and was the sharpest to recover. The level of Rs 480 would act as a good support for the counter. Long positions should be taken in the counter after some consolidation.

Zee Telefilms: The stock posted a smart rally from Rs 114. This level also happens to be a previous support. Long positions should be taken at Rs 118-119 levels with a stop loss of Rs 114.

Reliance: The stock has managed to close on a positive note. It has an immediate support at Rs 318. This level can be used as a stop loss for all long positions.

Ranbaxy: The stock has a good support at Rs 705. This level can be used as a stop loss for short-term long positions. Next support for the counter lies at Rs 660. On the upper side, it has a resistance at Rs 800 levels.

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