Trading recommendations - Jan 18, 2004
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Gas Authority - this gas pipeline major has been a prolific feature of our newsletter and has been recommended vide our editions dtd 02/08/03, 09/08/03, 16/08/03, 23/08/03, 11/10/03, 01/11/03, 08/11/03, 29/11/03, 06/12/03 & 13/12/03 ( click here to view our previous editions ). The stock has appreciated since then and paid rich rewards to our investors. The recent fall has been triggered by elections being announced and a result a feeling that the IPO ( initial public offering ) maybe hurried up, even at a lower price. The stock has also been over-extended and therefore a corrective fall was in order. We recommend a buy on significant declines as the outlook remains positive on the sector and stock in the medium / long term.
Your call of action -
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Investors / cash segment players - we advocate fresh delivery based buying into the counter at levels of Rs 220 only with a stop loss at 199 and a target of 250 be maintained in the near term.
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Aggressive F&O traders - Buy the February futures on declines of 228 ( quoting at Rs 5 premium to cash currently ), with a stop loss at the 218 levels. Expect a target of 250 in the month of February. Options traders can buy the Feb 240 calls at a premium not exceeding Rs 20.
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Fixed income strategy - Sell the Jan 200 puts at a premium of Rs 2.50
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Derivatives contract size - Market lot = 1500 shares, F&O margin = Rs 175000 ( subject to change daily)
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