The Professional Ticker Reader

The Professional Ticker Reader TM
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April 21, 2009

Markets recover to 3 month highs. Sensex gains 122 points.
Higher volumes, positive breadth as undertone turns bullish.: Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	3176	3313	3170	3303	+ 122.49
BSE - 200	406	421	405	418	+ 11.86
NSE - 50	1006	1048	1004	1046	+ 39.60
Dow Jones	9063 + 212	Nasdaq	1627 + 31	FTSE	4151 + 103
Advances	6684	Declines	5135	Put / Call ratio - 8694 : 23024
FII Investments	Rs + 477 Crs Jun 2 - 5		Domestic Funds	Rs + 8 Crs Jun 2 - 5

The value of shares advancing was Rs. 13,379 crores and the value of shares declining was Rs. 7039 crores. This indicates a broader buying bias. The total traded volume on the BSE was Rs. 5847 Crores. The total traded volume on the NSE was Rs. 14,625 Crores.

The week that was -

The week saw a steady start and a firm ending as the markets gained 4 % on a week-on-week basis. The firm US markets aided domestic sentiments significantly as the traders enhanced commitments. Technology stocks participated well in the upmove and the old economy counters continued their upward march. The Rupee stabilised against US $ and that construed as a sigh of peace. The sensex was boosted by ACC, Castrol, Cipla, Colgate, Dr. Reddy, Grasim, Gujarat Ambuja Cements, HCL Tech, Hero Honda, HLL, HPCL, ICICI Bank, Infosys, ITC Ltd, MTNL, Ranbaxy, Reliance Inds, Satyam Computers, SBI, Telco, Tisco and Zee Telefilms. The Sensex was dragged down by Bajaj Auto, BHEL, HDFC, Hindalco and L&T. The rupee ended the week at 46.88 levels against the US $.

Likely triggers -

The markets are showing signs of gaining upward momentum and attracting retail participation. The traded volumes are improving and the put call ratio suggests that retail players are willing enhance exposure at current levels. Outstanding contracts have ballooned up and the ratio itself is stretch to 0.38:1. Of the entire traded volumes clocked on both exchanges during the week, only 18 % were done on downtick days. That confirms the buying momentum. FII inflows continue to be positive and index heavy-weights are receiving follow-up buying support. Barring corrective falls, the markets should remain firm. The advancing monsoons should give an additional fillip to the markets and cheer sentiments further. The overseas markets are firm and have ended the week with good gains, which will cause a trickle down effect on the already bullish sentiments. The coming week will see the IPO market gearing up for the Maruti IPO and positive noises emanating from the software companies about future orders is likely to see a small buying interest return to this sector. Being technology heavy, the indices should gain from this development. Overall, expect a bullish market with possible profit taking.

Technicals - Please stay online to enable loading of graphics from our servers.

The weekly bar chart of the Nifty shows a rising bottoms and tops formation and that is a sign of strength. The Nifty has surpassed it's 52 week SMA and that is a positive indicator. The oscillators are pointing towards a continued upmove, albeit with corrections. The closing of the Nifty above the 1040 levels is a heartening indicator as it surpasses a previous high and the probability of a 1070 level in the coming week is high. On the lower side, expect support at the 1018 levels.

Our outlook on the Nifty remains positive. However, fresh buying at these levels is not advisable, continue to hold long positions with a 2 % stop loss.

Your call of action -

We advise our investors to hold on to existing long positions with a protective stop loss of 2 % and initiating trailing stop losses on excessively volatile counters. This will lock-in gains even if the markets fall suddenly. For stock specific recommendations, please refer to our special edition - Flavours of the week.

Have a profitable week.

Vijay 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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