The Professional Ticker Reader

These are stocks that we expect to out-perform the markets. Cash and derivative strategies are advised thereon. Please stay online to enable loading of graphics from our servers. Please also read the trading tips section at the end of the newsletter.

ABB - this MNC electricals major is in a medium / long term uptrend and has now turned a market out-performer. The relative strength index ( as compared to the BSE Sensex ) has surpassed the equilibrium line and the oscillators are indicating further upward room as possible. The volumes have been a grey area and are picking up gradually. This scrip is a good buy on declines for a patient delivery investor with a 3 - 6 month view.

ACC - This cement major was recommended in our edition of Aug 01, Aug 08 & Aug 23 - the trades were also repeated in the daily editions with profitable results. Should the markets see a downward correction, the 30 day SMA is expected to provide short term support at the 200 levels. Conversely, expect the 222 levels to be a trend determinator on the upsides.

Bajaj Auto - This 2 wheeler major is exhibiting extremely strong upward momentum as the stock scales new highs frequently. The good monsoons are a positive trigger and good export potential is an additional plus point. We recommend a buy for delivery investors with a 3 month perspective. Being a scrip with high relative strength, this counter is a relatively safer bet.

Bharat Forge - This auto ancillary major has been a frequent recommendation in our flavours edition since May 03 when the price was at 300 levels. The counter was recommended again in our 4/7/03, 11/7/03, 18/7/03, 25/7/03, 1/8/03 & 16/8/03 editions. Last week, we had very accurately expected the counter to have excellent short term buying support at the 380 levels. This level is the 33 % retracement of the entire upmove and as per the Dow theory, would see a bounce-back. The stock rallied from a low of 381 levels to 440 in 5 sessions. We reiterate a buy on the counter.

BHEL - Last week, this PSU major was recommended as it was quoting at it's highest levels since July 1999 levels and the weekly and monthly charts were showing a saucer formation with a classic bullish formation. The buy recommendation at the 320 levels in the September futures has been highly profitable as the counter has flared up. This counter is a market out-performer and has a high relative strength ( 350 % ) as compared to the Sensex. That makes this a good investment grade scrip. We advocate a buy for the lower risk appetite investor and the fixed income players.

BPCL - This PSU refining major was recommended last week as it was recovering lost ground after the disinvestment was reported to be postponed. The scrip had left an open gap on the downside and the oscillators were showing a fair probability of revival. That bullish call has been highly profitable as the stock was recommended for buying above the 315 levels. The positive news is the diversification from refining into the exploration business which is highly profitable. The company also has plans for retail forays. The stock is due for disinvestment and is trading at 19 month highs and is awaiting the supreme court hearing in the coming week. We advocate a hold at current levels / buy on declines. Once the scrip clears the 360 hurdle, expect a faster upmove. This counter would make a good fixed income play.

Ballarpur Inds - The re-rating of the paper / newsprint sectors is seeing a bouyancy on this counter too as the scrip has cleared a 29 month resistance to close with strong gains over the last 5 weeks. The oscillators are pointing towards a further upmove after due corrections and we recommend a buy on declines.

E-Serve - this counter is in a major uptrend as the counter enjoys a very high relative strength as the valuations haven't fallen in a weak market in the last 8 months. The oscillators are pointing towards a bullish trend and the scrip is testing it's previous highs at the 669 levels achieved in March 2003. Once this hurdle is surpassed, we expect the scrip to enter a new trading zone which will see the stock encounter little / no resistance. The only concern is the lower traded volumes which indicates a limited exposure on this counter.

Glaxo Pharmaceuticals - This pharma MNC major was recommended by us on 4/7/03 and 18/7/03 in the flavours edition at the 360 levels and has returned a solid 20 % profit within two months. This company has been restructuring aggressively and will be the biggest beneficiary of the EMR / IPR regime post 2005. The 13 & 30 weekly SMA's are good short term supports and the scrip can be bought at these levels for delivery purposes. Last week we advocated that once this counter makes a close above the 428 on a consistent basis, expect the rally to accelerate. Any volatility in the broader markets is likely to help this counter as defensive buying emerges in the pharma stocks in turbulent times.

HPCL - Last weeks recomendation of buying above the 395 levels has been highly profitable as the counter appreciated over 10 % in a week. This PSU refining major is in a long term uptrend as the positive news flow of the disinvestment and foray into retail marketing trickles in. The company is also launching a premium branded fuel which will cater to the new age high compression automobiles in the premium segment. That business being that of higher margin realisation, the stock is undergoing bullishness. The weekly graph shows a breakout above the previous top and a likely continuation of the uptrend as long as there is no unexpected negative news. The upcoming supreme court hearing on the disinvestment plea will hold a key to the immediate direction of the stock price. The oscillators seem to support the upmove. We recommend a buy on the counter as the stock is trading above it's previous top and in a new trading zone.

Infosys - This software bellweather was recommended as a buy last week above the 3800 levels and the trade is deeply in the money. The IT sector has seen a revival in the last 3 weeks and the same is aided by the bullishness in the Nasdaq. There are positive reports emanating from the international markets about corporate I.T. spend and that may see higher valuations in the coming weeks. The 200 day SMA is a very meaningful resistance for this counter and the same is poised at the 3800 levels. The scrip has managed to close above the 200 day SMA after 4 months - a sign of strength.The oscillators are signalling a possible bullishness. We recommend a hold at present levels and add on slight declines.

IPCL - Last week we recommended a buy above the 135 levels - trade which has yielded a 15 % profit in a week. This petrochem major is in an uptrend and has historically taken support at the 30 day SMA which is validated since the last 14 weeks. The oscillators are supportive of the upmove and the previous resistance levels of 135 levels have been surpassed. Should the scrip continue to trade above the 142 levels for the next 2-3 sessions, expect a fresh upmove. We recommend a buy in small lots.

ITC - This cements to hotels major is recommended yet again. Our subscribers were recommended to buy this scrip above the 820 levels and the trade is in the money. The oscillators are suggestive of a fresh upmove once the 845 - 850 levels are surpassed. We re-iterate our buy on the counter.

Mastershares - this counter has been recommended since May this year and has appreciated from the 10 Rs levels to Rs 13 - a good 30 % return with limited downsides. As we have been advocating, this is a good bet for returns conscious investor. As long as the markets remain in an uptrend, we expect this scrip's NAV to rise and a commensurate rally in the market price. We put out a buy on declines as a major appreciation has already occurred.

Reliance Industries - This counter was advocated by us last week to reach the 400 mark. Buying was recommended above the 380 levels - and the trade has been highly profitable. We re-iterate our view that this scrip is capable of leading the market rally from the front. The company has hiked product prices in the textile segment, it's infocom division has done well and declared excellent results. Since the counter has a high weightage on the indices, the counter is capable of swinging the markets significantly. The scrip is at it's April 2001 levels and is poised to test the 424 levels. We recommend a buy for the aggressive traders.

Siemens - this MNC electricals giant is is making a text book saucer formation as the re-structuring efforts of the company are paying off. The monthly chart shows a level highest after April 2000. The oscillators are pointing towards a sustained rally and we recommend a buy on the counter for all delivery traders.

Telco - This counter has been very profitably recommended by us on various occasions and is still looking strong on the short term charts. The scrip has a very high relative strength and is a strong market out-performer. This makes this counter an ideal fixed income play for the returns conscious investor.

BSE Sensex - The index has closed at a threshold level of 4245 which is slightly below the short term hurdle of 4260. The 4260 levels need to be surpassed convincingly with heavy volumes on a closing basis for a few sessions. Our estimates point to the next resistance at the 4330 - 4350 levels. On the lower side, expect support at the 4100 in the coming week.

Your call of action - Since the Sensex futures are not very liquid, we suggest trading the Nifty 50 instead.

Nifty 50 - Last week, we had advocated that the Nifty was expected to top out at the 1390 levels, once the 1326 levels were surpassed. We re-affirm that view as the Nifty is on target for that level. On the downside, we expect the 1320 levels to be the immediate support.

Your call of action - Derivative traders having initiated long positions earlier may hold the same with a stop loss at the 1325 levels. Take fresh long positions only for short term trading purposes above a significant closing over 1365 levels, maintain a stop loss at the 1350 levels and a profit motive of 20 - 25 points. Take positions in small lots only.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. Last week we advocated that should the Dow manage to close above the 9360 for a few consecutive sessions, we expect a minor breakout upwards. The index is consolidating at the present levels and the next week will be a crucial one for this index.

Dow Jones - Weekly chart

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

Nasdaq - This new economy benchmark index measures the outlook on the Nasdaq exchange. Last week, we had advocated that the worst seems to be over for this index as it has cleared a short term congestion and attempted to make a new high. The feel-good-factor is likely to percolate to the domestic software counters which were showing signs of revival last week. It is crucial that the Nasdaq trade higher than the 1782 levels consistently to signal a fresh run upwards. The next resistance will come at the 1865 and 1893 levels. On the lower side, expect support at the 1735 levels.

Nasdaq - Weekly chart

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

FTSE - This index measures the outlook on the London stock exchange. The index has been making higher bottoms and tops on the weekly charts. Last week, we observed that the oscillators were signaling a possibility of higher levels in the coming weeks. The resistance on the upsides will come at the 4300 levels and support at the 3940 levels.

FTSE - Weekly chart

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

Trading tips for the week

The put / call ratio is climbing into the over bought levels again as it stands at the 0.21:1 as the September series have commenced trading.
The Government's stand on the disinvestment of HPCL & BPCL will determine the short term trend of the markets. Should the supreme court hearing show a lack of clarity on the disinvestment, expect a corrective fall.
In the coming week, aim for safety first & capital appreciation later.
The index heavy-weights are now beginning to show strength and as long as Reliance, Hind Lever, Infosys, Telco, Tisco and ITC remain firm, expect the broader indices to be firm also. The reduction in the derivatives contract size is likely to ensure that the downsides will be limited.
We suggest a higher exposure to the steady returns route rather than speculative exposure due to higher risk component.
Adhere to stop losses religously. Await a breakout with a sharp rise in volumes to indicate the next leg of the rally.
Standby for fresh recommendations via SMS on a real - time basis.

The author is a Mumbai based investment consultant and invites feedback at Vijay@BSPLindia.com and ( 022 ) 23438482 / 23400345.

SEBI disclosure :- The author has no positions in the stocks mentioned above.