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.

ACC - This counter was recommended in the previous weeks and has appreciated as per expectations. The main trigger has been the increase in prices per bag and the top line growth. Technically, the scrip has just surpassed the medium term congestion zone and closed above the trendline resistance. The momentum oscillators are pointing towards an upmove and the outlook is improved. It is important that the scrip manage a close above the trendline congestion on a sustainable basis.

Canbank - this banking major is making new highs and is displaying very high relative strength as the graph indicates. The only dampener could be the short term pressure on the sector from the RBI norms on NPA / current profits related dividend constraints. We therefore advocate a buy on declines.

GAIL - this gas distribution major has been the flavour of the markets since the privatisation bug bit the markets. The stock has been moving in an extended consolidation phase since the last 4 months. The scrip has now broken out above the congestion level of 240 and managed to close above it. A confirmatory close above this level on a sustained basis will be a clear buy mandate for the discerning trader.

Glaxo - this counter was recommended last week and has performed well above our expectations in the last 6 months. The impeding EMR as per WTO norms in 2005 is the major trigger for this MNC pharma major. The congestion level of 650 has been surpassed and the stock has closed above this critical resistance level. The stock is a buy for the patient investor.

Grasim - this textile / cement major is making an interesting chart pattern as the scrip attempts to surpass the short term resistance zone of 1220. This resistance level is important as the trend line has seen a multiple reversal from this juncture. Any sustainable close above this level with high volumes and build up in open interest will be a buy trigger.

Punjab National Bank - this banking major is another market out performer as the chart indicates. The worries mentioned in Canara Bank also hold good for this counter and a buy is recommended on declines only.

SBI - the largest bank in the country and an FII favourite make this counter an interesting feature in it's peer group. The scrip is at a crucial congestion level of 665 which must be overcome convincingly to signal a fresh breakout. Volumes on the upside must be higher and open interest should be watched for signs of sustainability. Buy is recommended on advances.

SCI - this shipping major is exhibiting an interesting chat pattern as the downward sloping channel has been overcome and the scrip has shown good support existing at the 200 day SMA. The momentum oscillators are pointing towards an upmove and the scrip must not close below the channel top trendline, which is at the 140 levels.

Zee Telefilms - this media major is in a short term uptrend as the results have been enthusiastic and the election coverage has brought the electronic media back in the center stage of the stock markets. The stock is back above the 200 day SMA and that is a positive indicator. The momentum oscillators are pointing towards a further upmove in the near term. As long as the scrip remains above the 142 levels, the rally is intact. Buy in small quantities.

BSE Sensex - the Sensex has moved above the bearish channel and is consolidating at the present levels. A breakout above the 6000 levels is a pre requisite to a fresh upmove and the upside may see the 6100 - 6150 levels as a fair possibility. On the flip side, if the 5850 levels are broken downwards, expect a fall below the 5750 levels.

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

Nifty 50 - The Nifty is also precariously poised at the short term congestion levels. Only a breakout above the 1932 level which is a previous significant high, will a fresh upmove commence. Traded volumes must remain high and market breadth must be positive to keep the upmove intact. On the lower side, expect support at the 1858 & 1835 levels which must not be violated.

Your call of action - We advocate fresh trades on the Nifty on the long side only on declines that too in an indirect fashion by selling puts Sell the May 1750 puts at a premium of Rs 11 - 12 or above.

Dow Jones Industrial Average - this index measures the sentiments on the NYSE in the old economy segment and is showing signs of consolidation at the present levels. The support on the downside is ample at the 10,200 mark and the resistance at the 10,650 levels. For a fresh upmove, await a breakout above the 10650 levels.

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 is showing resilience as the 1990 level is a short term support for this index. On the upsides, expect resistance at the 2127 levels which must be surpassed with higher volumes to signal a fresh upmove.

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 UK index is showing higher relative strength as compared to the US markets and is inching closer to the breakout levels of 4650 where a low resistance trading zone commences. Downward support exists at the 4480 levels. Should the index maintain levels above the 4650 mark, expect the outlook to improve substantially.

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 and is currently at the 0.52 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative improvement. The FII investments are continuing steadily.
There is offloading at higher levels in the Nifty which shows a hedging preference at best. That indicates a cautious approach bulls are reluctant to take a one sided view.
The current week is crucial for the markets as the exit polls in the current phase will determine the moods in the near term and the derivatives series of April 2004 are due for expiry too.
The index heavy-weights are showing strength again. This in turn will boost the indices and cause a feel good factor. The only worry is that this upbeat sentiment should continue in view of the volatility in the pre election result scenario.
Trades must be executed in small volumes due to the higher volatility expected. Trade fewer counters and conserve cash for future opportunities.
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 any securities mentioned above.