The Professional Ticker Reader TM

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Flavours of the week                                                             Jan 04, 2004

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.

BHEL - This PSU electricals major was recommended vide our earlier editions dtd 05/07/03, 23/08/03, 30/08/03, 20/09/03, 18/10/03, 01/11/03, 08/11/03 and 28/12/03 ( click here to view our previous editions ). The previous weeks recommendation of buying above 496 and exiting at 530 has yielded superior profits and the trade has been successfully squared up. The stock is in a major uptrend as the stock has been making new highs consistently and is showing tremendous relative strength on the charts. The company has bagged large orders and is a hefty dividend payer. A breakout is expected above the 550 levels which will be a buy trigger for the counter.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter at Rs 525 only with a stop loss at 500 and a target of 560 / 570 be maintained before month end.

• Aggressive F&O traders - Buy the January futures at 530 and maintain a stop loss at the 523 levels. Expect a price target of 550 in the short / medium term. Options players may contemplate buying the January 520 calls at a premium of Rs 28.

• Fixed income strategy - n/a

• Derivatives contract size - Market lot = 1200. F&O margins approx 1,20,000 ( margins subject to change daily )

Bank of India - this PSU banking major was recommended earlier vide our editions dtd 18/10/03, 26/10/03 and 28/12/03 ( click here to view our previous editions ). The previous weeks recommendation of buying above 65 levels and squaring up at 70 levels has been highly profitable and the trade has been closed successfully. The chart pattern is suggestive of higher tops and bottoms formations and the 30 week SMA is a good support on the short term charts. The stock is a market performer and a closing above the 71 levels should see a decent appreciation of 8 - 10 % in the near term.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above a close of Rs 72 only with a stop loss at 66 and a target of 78 be maintained before month end.

• Aggressive F&O traders - Buy the January futures above a price of 73 with a stop loss at the 69 levels. Expect a price target of 78 in the near term. 

• Fixed income strategy - n/a

• Derivatives contract size - Market lot = 3800 shares. F&O margins approx Rs 50,000 ( Margins subject to change daily )

Dr Reddy - This stock was recommended vide our earlier edition dtd 06/12/03 and 28/12/03 ( click here to view our previous editions ). The stock is consolidating higher and has tremendous relative strength on the charts. The scrip is making higher bottoms and tops and a breakout is expected above the 1465 levels. The oscillators are pointing towards a bullish undertone. We recommend a buy as any volatility in the markets is likely to see defensive buying in the pharmaceuticals segment.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above a close of Rs 1465 only with a stop loss at 1400 and a target of 1600 be maintained before budget.

• Aggressive F&O traders - Buy the January futures above the 1470 levels with a stop-loss at the 1420 levels. Maintain a price target of 1540 - 1550 in the short / medium term.

• Fixed income strategy - n/a

• Derivatives contract size - Market lot = 400 shares. F&O margins approx Rs 1,00,000 ( margins subject to change daily )

ICICI Bank - This private sector new age bank was recommended vide our editions dtd 02/08/03, 23/08/03, 27/09/03, 04/10/03, 26/10/03, 01/11/03, 08/11/03, 06/12/03, 13/12/03 and 28/12/03 ( click here to view our previous editions ). Last weeks recommendation of entering long above 290 and squaring up the trade at 305 levels has been successfully achieved. Having appreciated tremendously since our original recommendation above 186 & 212, this stock is consolidating before a fresh upmove. The 310 levels will be a short term hurdle above which the stock enters a new zone. We recommend a buy on the counter.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above a close of Rs 310 only with a stop loss at 293 and a target of 330 be maintained before month end.

• Aggressive F&O traders - Buy the January futures above a level of 310 and maintain with a stop loss at the 304 levels. Expect a target of 324. Options players can buy the January calls at a strike price of 320 at a premium of Rs 9 - 10

• Fixed income strategy - n/a

• Derivatives contract size - Market lot = 1400 shares. F&O margins approx 85,000 ( margins subject to change daily )

I-Flex - This software second rung counter was recommended in our previous editions dtd - 26/07/03, 06/09/03, 20/09/03, 27/09/03 & 13/12/03 ( click here to view our previous editions ). The stock is in a major uptrend and displaying a bullish trend as can be seen from the rising bottoms and tops formation. The 13 week SMA is a good support in the near term and that level is at 775. The stock is relatively highly volatile and therefore a liberal stop loss and smaller quantities are recommended. Buying is recommended for the high risk profile traders and investors. Unconfirmed reports point to a major US fund buying strongly on the counter.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above 880 levels and suggest a stop loss at the 820 levels. Expect profit taking at the 950 - 960 levels by results.

• Aggressive F&O traders - buy the January futures above a price of 890 and maintain a stop loss at the 860 levels. Expect to book profits at the 930 - 940 levels.

• Fixed income strategy - n/a

• Derivatives contract size - 600 shares. F&O margins approx Rs 90,000 ( margins subject to change daily )

Infosys - this software bellweather is likely to be the biggest beneficiary in the upbeat US markets as the US $ firms up and technology companies see a feel-good-factor due to stable forex management. We have been recommending this scrip ever since it signalled a breakout above the 3900 levels and has appreciated handsomely. The recommendations were dtd 26/07/03, 02/08/03, 23/08/03, 30/08/03, 06/09/03, 20/09/03, 27/09/03, 11/10/03, 18/10/03, 01/11/03, 08/11/03, 13/12/03, 20/12/03 and 28/12/03 ( click here to view our previous editions ). Last week we had predicted a level of 5600 which was successfully achieved. The scrip is making higher tops and bottoms on the weekly chart and the pre-result speculative rally will help the sentiments further. We recommend a buy.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above 5730 levels and suggest a stop loss at the 5580 levels. Expect profit taking at the 5900 levels before results.

• Aggressive F&O traders - buy the January futures above a price of 5730 and maintain a stop loss at the 5640 levels. Expect to book profits at the 5900 levels. Options traders can buy the January calls at a strike price of 5800 at a suggested premium of Rs 200.

• Fixed income strategy - n/a

• Derivatives contract size - 100 shares. F&O margins approx Rs 1,25,000 ( margins subject to change daily )

IPCL - This counter was previously recommended vide our editions dtd - 19/07/03, 09/08/03, 14/08/03, 23/08/03, 30/08/03 & 04/10/03 ( click here to view our previous editions ) and has been highly profitable for patient traders. The stock is making new highs and as we have been pointing out to our investors. The stock is at it's lifetime high as the previous significant high is the 202 levels. That will be the absolute base for the counter. The company will be declaring it's first year ended results after the Ambani's took over management control and all the restructuring efforts will start showing here onwards. We recommend a buy.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above 230 levels and suggest a stop loss at the 210 levels. Expect profit taking at the 255 - 260 levels in 8 - 10 weeks.

• Aggressive F&O traders - buy the January futures above a price of 240 and maintain a stop loss at the 232 levels. Expect to book profits at the 255 levels. Options traders can buy the January calls at a strike price of 240 at a suggested premium of Rs 12.

• Fixed income strategy - n/a

• Derivatives contract size - 2200 shares. F&O margins approx Rs 88,000 ( margins subject to change daily )

Mah & Mah -  We have been recommending this stock since it broke out above the 148 mark and the previous reco dates were 05/07/03, 12/07/03, 19/07/03, 09/08/03, 13/09/03, 27/09/03, 18/10/03, 26/10/03, 01/11/03, 20/12/03 and 28/12/03 ( click here to view our previous editions ). Last weeks recommendation of entering long as long as the scrip stayed above 366 and squaring up at 395 has been achieved successfully. This scrip has been one of our more profitable recommendations and continues to remain a favoured one. A fresh breakout is confirmed above a closing of 402 with higher volumes. A buy is recommended.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above a close of Rs 402 only with a stop loss at 380 and a target of 430 / 435 be maintained in the near term.

• Aggressive F&O traders - Last weeks trade of buying above 380 and taking profits at 392 levels has been highly profitable. For fresh trades, buy the January futures above a price of 403 and maintain a stop loss at the 394 levels. Expect to book profits at the 414 - 418 levels. Options traders can buy the January calls at a strike price of 410 at a premium of Rs 11 - 12. 

• Fixed income strategy - n/a

• Derivatives contract size - 2500 shares. F&O margins approx Rs 1,90,000 ( margins subject to change daily)

Maruti - this scrip was recommended earlier vide our editions dtd 18/10/03 and 08/11/03 ( click here to view our previous editions ) and is consolidating at the present levels. Any clear breakout above the 390 levels a sustained trading above this level should see a new trading zone as the company is posting a heft jump in sales and projects to double the sales in 3 years time. New launches are on the anvil and these actual events will see a boost to the share prices. We recommend a buy for the patient and savvy investor.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above 380 levels and suggest a stop loss at the 364 levels. Expect profit taking at the 410 - 415 levels in 8 - 10 weeks in a firm market.

• Aggressive F&O traders - buy the January futures above a price of 391 and maintain a stop loss at the 379 levels. Expect to book profits at the 405 - 408 levels. Options traders can buy the January calls at a strike price of 390 at a suggested premium of Rs 16.

• Fixed income strategy - n/a

• Derivatives contract size - 1600 shares. F&O margins approx Rs 2,35,000 ( margins subject to change daily )

Ranbaxy - this domestic pharmaceuticals major was recommended vide our earlier editions dtd - 07/06/03, 14/06/03, 28/06/03, 05/07/03, 12/07/03, 19/07/03, 23/08/03, 01/11/03, 06/12/03, 20/12/03 and 28/12/03 ( click here to view our previous editions ). The stock has witnessed nervousness after the media report of a management tussle which should be good entry point for the discerning investor. We recommend a buy as any volatility in the markets is likely to see defensive buying in the pharmaceuticals segment.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter at a price of Rs 1095 only with a stop loss at 1060 and a target of 1150 - 1175 be maintained in 10 - 12 weeks time in a firm market.

• Aggressive F&O traders - buy the January futures above a price of 1100 and maintain a stop loss at the 1070 levels. Expect to book profits at the 1150 levels.

• Fixed income strategy - n/a

• Derivatives contract size - 800 shares. F&O margins approx Rs 1,50,000 ( margins subject to change daily)

Reliance - this scrip has quite simply been the most prolific recommendation and also one of the most profitable since months. We have been repeatedly advocating that this scrip is capable of leading the market rally from the front and our expectations have been fulfilled. Previous reco dates have been 05/07/03, 26/07/03, 02/08/03, 09/08/03, 23/08/03, 30/08/03, 06/09/03, 20/09/03, 27/09/03, 4/10/03, 11/10/03, 26//10/03, 01/11/03, 08/11/03, 20/12/03 and 28/12/03 ( click here to view our previous editions ). The previous weeks target of 550 has been met and surpassed and given excellent returns to our investors. The scrip will signal a breakout above it's previous congestion levels above 590 and trigger a buy for the swing trader. The stock is trading at it's all time high and is likely to appreciate further.

Your call of action - 

• Investors / cash segment players - we advocate purchases above 590 and with a stop loss at 574 and a target of 610 be maintained before the month end.

• Aggressive F&O traders - Traders may buy the January futures at a price of 592 and maintain a stop loss at the 581 levels. Expect to book profits at the 610 - 615 levels. Options players can buy the January calls at a strike of 600 and a premium of Rs 15 - 16.

• Fixed income strategy - n/a

• Derivatives contract size - 600 shares. F&O margins approx Rs 80,000 ( margins subject to change daily)

Satyam Computers - This software major is likely to be a big beneficiary of the bullishness in the US markets. Earlier reco dates are 20/09/03, 27/09/03, 11/10/03, 08/11/03, 13/12/03, 20/12/03 and 28/12/03 ( click here to view our previous editions ). Last weeks reco of buying above the 366 and exiting at the 375 mark has been achieved successfully. The stock has a good support at the 30 day SMA which is currently at the 362 levels. A good medium risk buy for the slightly adventurous trader - above a breakout level of 378.

Your call of action - 

• Investors / cash segment players - we do not advocate excessive delivery based buying into the counter and small purchases are advised above the 381 levels and maintain a stop loss at the 370 levels and hope to book profits at the 394 mark in a firm market.

• Aggressive F&O traders - buy the January futures above a price of 385 and maintain a stop loss at the 378 levels. Expect to book profits at the 394 levels. Options players may buy the January 390 calls at a premium of Rs 15.

• Fixed income strategy - n/a

• Derivatives contract size - 1200 shares. F&O margins approx Rs 1,30,000 ( margins subject to change daily )

Union Bank - This stock was earlier recommended vide our newsletter dtd 18/10/03 ( click here to view our previous editions ) and is likely to signal a breakout above the 56 mark. The trigger is the likelihood of the bottoming out of the interest rates and higher credit offtake in the near term. The banking sector is undergoing a feel good factor after a period of consolidation and should the stock stay above the 56 mark, expect a new trading zone. We recommend a buy.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above 55 levels and suggest a stop loss at the 51 levels. Expect profit taking at the 63 - 65 levels before results.

• Aggressive F&O traders - buy the January futures above a price of 55 and maintain a stop loss at the 51.50 levels. Expect to book profits at the 59 levels. Options traders can buy the January calls at a strike price of 55 at a suggested premium of Rs 2.50.

• Fixed income strategy - n/a

• Derivatives contract size - 4200 shares. F&O margins approx Rs 66,000 ( margins subject to change daily )

Zee Telefilms - this counter was recommended on 26/10/03, 20/12/03 & 28/12/03 ( click here to view our previous editions ) and has appreciated handsomely as the stock has been a market performer recently. As long as the scrip remains above the 155 mark, expect the upward momentum to remain intact. The media sectors re-rating is likely to see this scrip getting higher valuations also. Buying recommended for the cash segment players.

Your call of action - 

• Investors / cash segment players - we advocate fresh delivery based buying into the counter above a close of Rs 155 only with a stop loss at 142 and a target of 180 be maintained in the near term. Hold the previous weeks purchases with a stop loss at 151.

• Aggressive F&O traders - n/a.

• Fixed income strategy - n/a

• Derivatives contract size - n/a

BSE Sensex - Last week, we predicted a level of 5820 as a achievable target for the Sensex. That target has been achieved and the index has closed at an all time high. Remain long with a target of 6120.

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 show strength. We predicted a 1870 level on the Nifty, which was achieved ( click here to view our previous editions ). The fresh target for the index is at the 1970 - 1990 levels in the days ahead. On the lower side, expect support at the 1820 levels in the week ahead. We expect high volatile pattern due to the announcement of the vote of account by January end.

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 or buying calls to be on the safer side. Sell the January 1800 puts at a premium of Rs 9 or above.

Have a  profitable week.

 

Vijay L Bhambwani

Ceo :- Bsplindia.com

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.

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