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.

Andhra Bank - This PSU banking counter is in an uptrend and above the 43.50 levels, will give a confirmatory breakout for cautious traders. The oscillators are suggesting an accumulation at lower levels and the outlook appears positive. We recommend a buy on the counter.

Bajaj Auto - this two wheeler major is in a major uptrend and has managed to close at at it's highest on the last trading day of the week. The scrip was recommended last week and has returned superlative returns to our investors / traders alike ( click here to view previous editions ). The counter is showing tremendous relative strength and has not violated the 30 day SMA support which should be taken as the immediate stop loss. Fundamental reasons are also in favour of the stock as good monsoons, export potential and new launches are boosting the topline / bottomline figures. We maintain a buy.

Bank of Baroda - Another banking counter which appears to be headed north as the price shows a closing at near recent highs, where upwards resistance is low / zero. Should the counter close above the 155 levels, expect the price to appreciate faster. The oscillators are signaling a bullishness in the undertone and we recommend a buy on the counter.

Grasim - This cement major is attempting to surpass previous highs and is in a major uptrend. Should the near term resistance be surpassed and the stock manages a conclusive close above the 675 levels, expect an accelerated upmove. The oscillators support a rally and we recommend a buy on the scrip.

HPCL - This PSU refining major has been in a tumultuous trading pattern as the disinvestment issues have taken this counter on a roller coaster ride. Currently, this counter is likely to slide after the recent announcement by the Govt that the disinvestment for HPCL was a distant dream for now. The slide is likely to give opportunities to bears and fixed income players alike. We recommend selling calls at deeply out of money strikes.

ICICI Bank - This banking major was recommended to our premium plan subscribers and has rewarded players handsomely as it has hit a new high recently. This recommendation was made at the 194 levels and a profit target of 210 was advocated last week ( click here to view previous editions ). This bank is a leader in personal, automobile, consumer finance and now catching up in the credit card segments too. The retail thrust is paying off and the internet banking is an additional bonanza for the bottomline. This scrip is a buy on declines.

IOC - This PSU oil refining and retail distribution major is in the limelight due to a disinvestment consideration. The proposal to hive off the retail distribution chain and retain only the refining business is likely to be cheered by market players. The company has recently announced a liberal bonus and the stock is in a major uptrend. We recommend a buy.

IPCL - This counter is in a major uptrend as the scrip has never fallen below it's 30 day SMA on a closing basis since April ' 03. The counter has broken above it's previous top of 177 and closed above it - a definitive sign of strength. Should the counter manage to close above the 170 levels on a consistent basis, expect the counter to scale further heights. The company has been aggressively re-structured after Reliance took over the management and all the measures are beginning to yield results. We expect the pre-result outlook to be firm. Buying is recommended on the counter.

Reliance - This counter has been advocated by us as capable of leading the rally from the front. Having recommended this scrip on multiple occasions profitably, we feel every trader should exploit opportunities on this counter every time it takes support at milestone levels. Last week, a buy was recommended above the 431 levels and a target of 444 was advised. That reco has turned out to be highly profitable ( click here to view previous editions ). Currently, the scrip has support at it's 30 day SMA which has been a support since May 2003. Buying is recommended.

Tisco - This steel major was recommended by us in our daily edition above the 261 levels which were a short term congestion zone. The counter has made a new high on a closing basis and has surpassed previous congestion levels. We reconfirm a buy on the scrip as the oscillators suggest room for upward movement.

BSE Sensex - Last fortnight we had accurately pointed out that since the Sensex had not closed below the 30 day SMA and therefore the worst was over. For the markets to signal a conclusive buy, it was important that the Sensex close above the 4470 levels, that too with high volumes and a highly positive market breadth. The 4260 levels were predicted as a strong support last week. Our hypothesis has been proved accurate and the markets have hit a new high, thereby entering a new trading zone. We expect a level of 4625 to be a short term resistance, beyond which the 4750 levels will be a possibility. Our outlook is that of a bullish market.

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

Nifty 50 - Last fortnight, we had advocated that the Nifty was expected encounter strong support at the 1300 levels which coincided with the 30 day SMA as well as the 38 % retracement from the recent high. That computation has been proved accurate. The previous high of 1432 has been surpassed on a closing basis. That is a sign of bullishness and the next inflection point for the Nifty is the 1465 / 1470 level. The short term momentum oscillators indicate a possibility of a further rally and we recommend a buy on the index.

Your call of action - Since the breakout above 1432 is achieved, buying afresh is recommended in the October futures above the 1452 levels with a stop loss at the 1428 levels. Expect a price target of 1466 / 1470 in the near term. Should the markets remain bullish, expect the 1492 levels to be a distinct possibility.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. Last week we advocated that the Dow Jones index was pointing to a weakness. The index has gained ground on the last day of week after strong employment data lead to a belief that the economy was turning around. However, the 9700 mark will be a short term trend determinator for the index. Should the Dow surpass this resistance on a closing basis, expect the upmove to gain momentum. The outlook appears positive.

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 predicted support at the 1740 levels which was not violated. The upward charge has been led by Intel which has seen a heavy buying interest. The Nasdaq is appearing stronger than the Dow Jones - relatively speaking. Should the Nasdaq close above the 1925 levels consistently, expect the upmove to gain momentum. We are optimistic about the coming week for this index.

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. Last week we predicted support on the downside at the 4050 levels - and the FTSE has seen lows of 4082 levels. Watch the 4050 levels for support and on the higher side, expect selling at 4420 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 at the 0.26 : 1 levels and the outstanding positions in the derivatives segment have crossed Rs 7400 crs on the long side. Therefore trades must be initiated on the long side rather than take short positions. The short term resistance levels having been surpassed, the markets are likely to rally higher.
The Government's stand on the dis-investment of IOC will enthuse the market sentiments. The pre-result speculative build-up has commenced and that is likely to be the major domo trigger for the markets in the short term.
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 move in tandem. Watch these counters for guidance.
Trade more aggressively as compared to the previous week as the outlook is more positive than the recent past.
We suggest a higher exposure to the equity route rather than steady returns for the coming week due to lower risk component.
Adhere to stop losses religously.
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.