WEEKLY REPORT ON NIFTY BY kadiyali - 16.01.10 (Saturday)

WEEK GONE BY

As indicated in my last weekly report, Nifty traded RANGEBOUND for the second successive week, but marginally succeeded in avoiding a negative close. Nifty closed the week at 5252, up just 7 points. Against the trading range of 5160-5320 indicated by me in the last weekly report, Nifty traded in the range of 5169-5301, with the week's high of 5301 recorded on Tuesday, and the low of the week of 5169 on Wednesday. Nifty having secured its highest close of 2009 at 5201 on the last day of 2009, has now secured a close above 5200 for all the first 10 trading days of the new year.

WEEK AHEAD

Having marginally succeeded to avoid a negative close for this week by just 7 points, Nifty is now poised to record a weekly negative close for the week ahead. It will also come out of the rangebound trade displayed for the last 2 weeks, and will trade in a range of more than 200 points. The trading range for the week is likely to be 5030-5260.

STOCK RECOMMENDATION

My stock pick for the week is VADILAL INDUSTRIES (cmp 93) as a Potential Multibagger.

VADILAL INDUSTRIES (cmp 93) - FV 10 - Equity 7.19cr - Lifetime High 101 - 52 Weeks High 99 - 52 Weeks Low 23. The company has been gradually expanding its market for Ice Cream & Diary Products with a steady CAPEX every year. With the per capital consumption of these products poised to rise in the days to come in our country, giving this company a regular growth, VADILAL will  be a multibagger in 2-3 years. Starting from current financial year, the company is likely to earn N/P exceeding Equity in the first quarter (April-June) of every financial year, and N/P almost equal to Euity for the remaining 3 quarters of the year, giving the company an EPS of more than 20.

BUY this stock below 85 for a Multibagger Opportunity.

OPTION RECOMMENDATION

My option recommendation for the week ahead is NIFTY PUT 5200PE (cmp 46). BUY this option at/around CMP for a target of 100-150.

In view of the inherent risk involved in Options Trading, buying of options may be done only out of trading/investment profits & not out of capital.

NIFTY SMS GROUP TRADES - JAN 10

A. Total Trades:                   6

B.  Winning Trades:            5

C.  Losing Trades:                1

D.  Points Gained:              85

E.  Points Lost:                    14

F.  Net Gain:                         71