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.

Bank of Baroda - this PSU banking major was recommended as a short sell in the previous week and has performed as per expectations. A price objective of 164 was projected on these shorts - which were achieved. We feel there is still further downside in the counter as the rising crude prices are likely to have an inflationary effect on the system and a minor selling in the banking industry. Chartically, the scrip has made a head and shoulder formation which is depicted in the graphic below. Since H&S is a measuring move, it is assumed that a projected downside of 152 - 156 be expected. We recommend short selling for the aggressive / high risk traders.

Hero Honda - another short sell candidate which did well as per our expectation as recommended in the previous edition. The counter is making a lower tops formation, with a neckline at the Rs 400 mark. Should this level be violated, expect further falls as the scrip appears weak, with the oscillators in a sell mode. We recommend fresh short sales on the counter for the high risk / aggressive traders - in small lots.

Infosys - this counter has been recommended as a buy in this newsletter since a few months and has rewarded traders & investors handsomely. The scrip has indicated a flag formation on the weekly charts and gets support on it's 30 day SMA on the daily charts as shown below. That makes the 1680 levels as a good support for this counter. A time / price analysis on this counter enables us to project a price of 1920 - 1930 by the next quarter ending - Jan 05. We recommend a buy on declines for the discerning investor / trader.

SBI - another banking stock that we recommended as a short last week and has performed as per our expectations. The scrip makes a similar chart pattern as Bank of Baroda and once the 460 levels are violated, an accelerated fall cannot be ruled out. We recommend a short sale on the counter on advances. Traders may note that the recent top has been lower than the previous top, should the previous bottom be violated, a weak forecast is likely for this scrip.

TCS - This scrip is one of the most profitable recommendations that we have made to our clients as a buy was indicated at the 975 - 980 levels. A projected price of 1100 - 1120 was forecast, which has been successfully achieved. The scrip makes higher tops and bottoms, is a market out-performer and is also one of the top 5 outstanding stocks in the F&O segment. We forecast a price of 1250 and above by the time the next quarters results are announced.

Tata Motors - this stock is reeling under the pressure of profit taking as well as the rising oil prices which threaten to dampen the topline growth in the coming quarters. The passenger car market also gets crowded with newer entrants in terms of models. The chart shows a rising trendline support at the 398 levels, which if violated with higher volumes, will see a faster fall to the next immediate support at the 385 levels. We recommend a short sell on the counter on that confirmatory fall. Traders may please note that the counter has failed to surpass the 200 day SMA ( blue line ) in the entire upmove.

BSE Sensex - ths Sensex has retraced to trade within it's bullish channel again and the possibility of a further fall is not ruled out. If the Sensex trades below the 5660 levels, expect the next target to be at the 5575 levels if the markets witness sustained profit taking. Upsides are likely to be capped at the 5765 levels 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 - A chart pattern similar to the Sensex, this index is likely to get short term support at the 1784 levels, below which, the 1765 levels are likely. On the higher side, resistance will be seen at the 1820 levels in the week ahead.

Your call of action - Short the October futures below the 1786 levels and maintain a stop loss at the 1795 levels. Expect profit taking at the 1772 levels in the near term

CNX IT - This technology index is showing signs of strength as the composite counters make newer short term highs. The rally is likely to continue after due corrections and we feel traders can take long positions on this index on minor declines.

Your call of action - Buy the October futures at the 2625 levels and hold with a stop loss at the 2590 levels. Expect to book profits at the 2685 levels in the short term in a conducive market.

Dow Jones Industrial Average - as forecast by us last week, this NYSE index has been unable to hold on to gains and displayed a lower tops and bottoms formation. The channel top has proven to be a formidable resistance and the 52 week average could not be surpassed. The 10085 levels will be the near term resistance and support is likely at the 9780 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.

Bank of Baroda I Hero Honda I Infosys I SBI I TCS I Telco I BSE Sensex I Nifty 50 I CNX-IT I Dow Jones I Nasdaq I FTSE I Close window I Print page

Nasdaq - this technology / biotech laden index also displays a similar chart pattern as the Dow Jones, though the level of attrition is less. The index has been making lower tops and bottoms formations and the is unable to trade above it's 52 week SMA. The immediate support is likely at the 1870 levels and the resistance at the 1960 mark

Nasdaq - Weekly chart

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

Bank of Baroda I Hero Honda I Infosys I SBI I TCS I Telco I BSE Sensex I Nifty 50 I CNX-IT I Dow Jones I Nasdaq I FTSE I Close window I Print page

FTSE - this UK index had shown promise in the last fortnight, but flattered to deceive as the markets could not hold onto their gains. The 4750 levels become the immediate top in the coming days and 4520 the immediate support.

FTSE - Weekly chart

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

Bank of Baroda I Hero Honda I Infosys I SBI I TCS I Telco I BSE Sensex I Nifty 50 I CNX-IT I Dow Jones I Nasdaq I FTSE I Close window I Print page

Trading tips for the week

The put / call ratio is climbing and is currently at the 0.33 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative deteteoration. The FII investments are continuing steadily.
There is offloading at higher levels in stock futures. That indicates a cautious approach as long positions in individual stocks is being hedged by Nifty shorts.
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.