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.

Ashok Leyland - This commercial vehicles manufacturer was recommended by us earlier at 160 levels ( click here to view previous editions ) and has appreciated since then. The stock has good support at it's moving averages and should be bought on declines. The oscillators are supporting a buy decision too. The industry itself is doing well and it's peers like Telco, Mah & Mah and Volvo are reporting improved sales. Since this segment is economy dependent, any sustainable improvement in the outlook will help boost sales. We recommend a buy on declines.

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 recommend a buy.

Hexaware - This software stock is showing tremendous strength and has appreciated handsomely in the recent past. The volatility reading being high, this stock is ideal for high risk, high return traders. However, exposure must be curtailed in view of the risk involved. Since the stock is hitting new highs, buying is recommended on slight declines.

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 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.

I-Flex - this software major has been recommended by us very frequently and profitably in the recent past. Last weeks reco of a buy at the 720 levels with a profit target of 765 has been highly profitable ( click here to view previous editions ). This scrip is a strong contender for the top slot category as it is rapidly gaining market share in the European Union ( EU ) and US markets. The counter has one of the highest relative strengths in the category and has proved itself to be investor friendly by way of a liberal bonus. Liquidity is likely to improve as a result and result in lower impact costs. We strongly recommend buying this counter as the pre-result run up will see higher levels on this counter.

Infosys - This software bell-weather was recommended by us ever since it crossed over the 200 day SMA ( 3800 levels ) ( click here to view previous editions ) and has been profitable though volatile investment. It should be noted that intraday volatility apart, the counter has always managed to close above it's 13 day SMA ( currently at 4200 ) which is a heartening sign. We expect a rally in the pre-result run upwards and recommend a buy. The high relative strength of the counter makes it an attractive bet. The 13 day SMA should be a crucial short term support to watch.

L&T - This engineering major has given a breakout on the daily charts as the price graph has managed to close above the 312 levels for the first time. The stock has a very high relative strength and is a market out-performer which makes it a good choice for relatively lower risk investors. We recommend a buy on declines for investors.

Mah & Mah - This tractor to utility vehicles manufacturer has been a frequent recommendation in our weekend newsletters ( click here to view previous editions ) ever since it broke out above the 185 levels. The counter has rewarded investors and traders alike and is set to scale new highs in a conducive market. We recommend a buy on declines.

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. Currently, the scrip has support at it's 30 day SMA which has been a support since May 2003. Buying is recommended.

Satyam Computers - this software major was recommended last week above the 245 levels with a price target of 252 - 254 levels ( click here to view previous editions ) which turned out to be a profitable trade. The counter is exhibiting a sideways movement ahead of the earnings season. Being a high beta ( volatility ) counter, it is a favourite among traders - especially so in the pre-result season. We expect a good lot of trading opportunities on the buy side before the numbers are finally out.

BSE Sensex - Last we had accurately pointed out that 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 is important that the Sensex close above the 4470 levels, that too with high volumes and a highly positive market breadth. Till then, expect the buying conviction to be lacking. The 4260 levels are a strong support this week.

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 as the index has managed a close above the 1300 levels. We foresee short term support at the 1350, failing which the 1300 levels is a tried and tested base. For the markets to conclusively trend higher, it is crucial that the 1420 resistance be scaled. Await a breakout from that level before making a fresh entry on the long side.

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 expected to get support at the 9280 levels. That has proved to be prophetic as the index has closed at 9313. The Dow is trading at it's 13 week SMA and the oscillators are pointing to a weakness. Watch the 9200 and 9700 band for guidance. The major factors spooking the index are rising crude prices and pre-result worries on the US economy.

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 accurately predicted support at the 1815 and then the 1788 levels - the Nasdaq closed at 1792 !!!. Like the Dow, this index is showing weakness on short term charts and needs to be watched for a few days. Should the 1740 levels be violated, expect lower 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. Last week we predicted support on the downside at the 4160 levels - and the FTSE has closed at 4157 levels. Watch the 4050 levels for the next support. On the higher side, expect selling at 4400 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 0.19 : 1 levels but the outstanding positions are too small to indicate a reliable picture.Therefore trades must be curtailed in volumes / contract sizes. Safety first should be the maxim this week.
The Government's stand on the disinvestment of HPCL & BPCL will determine the short term trend of the markets.
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 fewer stocks and keep exposure light till the markets signal a secular directional movement.
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.