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.

Bharat Electronics - this scrip was recommended as one of the stronger scrips and enjoys a relative strength of 221 as against the Nifty 50. The scrip has bucked the overall market trends and has rallied significantly to scale new highs. The scrip is nearing our projected price target of 835 / 850 and patient investors are likely to reap even higher prices in the event of a conducive market scenario and with a little bit of patience.

Bharat Heavy Electricals - this scrip has been a frequent recommendation and was last recommended at 755 - 765 levels. We re-affirm our bullish view on the counter and we feel the 865 levels will be a medium term target. Long term target is in excess of 900 levels. This scrip is for patient players and will move like BEL - in spurts. Technical traders will note the high relative strength of 411 vis-a-vis the Nifty 50.

ITC - this cigarettes to hotels to FMCG major is in a long term uptrend as the scrip is nearing lifetime highs. With a high relative strength of 259, this scrip is a market out-performer. We anticipate a price target of 1650 - 1700 in the medium to long term and recommend a buy for the patient trader / investor.

NTPC - this power major is in a consolidation phase as the scrip has dropped 10 % from the top and moved within a range. We feel a buy on declines would be a prudent strategy for the patient long term investor.

Satyam Computers - we had recommended this scrip twice earlier recently and advocated a resistance at the 424 levels where multiple tops are witnessed. The scrip is witnessing a pullback in the post result scenario and may see levels of 420 where selling / shorting is advisable.

Tata Motors - this scrip is showing a pullback after a steep fall and poor volumes mark the upsides. Retracement studies make us believe that upsides will run into resistance at the 457 / 458 levels and short selling is advocated. Additional impetus to short selling is likely from the higher crude prices.

BSE Sensex - the Sensex is exhibiting a lower tops and bottoms formation which is in a downward moving channel. It is likely that the index may close the open gap till the 6440 levels. A selling pressure is likely at these levels and in the most optimistic scenario, expect the 6500 levels ( though very unlikely). We recommend a short selling view at higher levels.

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

Nifty 50 - the Nifty is moving with a lower tops and bottoms formation in the bearish channel which will see resistance at the 1988 levels. The channel top at the 2020 will be the unlikely exhaustion point of a rally, if at all such a strong rally occurs. We feel traders should start pressing short sales above the 1985 levels with staggered sales upto the 2000 levels. A fall is likely to see 1918 levels where shorts can be covered.

Your call of action - start pressing sales in the May futures when the spot levels are near the 1985 + levels. Traders should leave room for averaging till the 2010 mark. A stop loss be maintained at the 2025 levels in spot. Our downward target is the 1918 - 1925 levels in spot.

CNX IT - this technology heavy index is making a similar chart pattern like Satyam Computers above. The multiple tops trendline exhibited will provide a formidable resistance at 2850 levels in case the index reaches there. Minor resistance will be seen at the 2750 levels. The 2500 levels will be the support level to watch.

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

Dow Jones Industrial Average - this NYSE index is moving in a downward sloping channel and encounters resistance at the 10,200 - 10260 range. Any re-test of the 10,000 levels will see a faster fall as the psychological level is also a major threshold for the bulls to watch.

Your call of action - this is a pure academic study.

BEL I BHEL I ITC I NTPC I Satyam computers I Telco I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Nasdaq - the Nasdaq is moving in the bearish channel and encounters resistance at the short term averages at the 1960 - 1980 levels. Any sustained upmove above this level will be sign of a short term rally to the 2030 mark ( low probability event ). A fall below the 1900 levels will be a sign of accelerated weakness.

Your call of action - this is a pure academic study.

BEL I BHEL I ITC I NTPC I Satyam computers I Telco I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

FTSE - the FTSE like the US indices has traded within a channel and moved below the bearish channel to exhibit a weak chart pattern. The momentum oscillators are showing a possibility of a pullback and a corrective rally that could test the 4900 - 4915 levels. Watch the 4800 levels for support in the coming week.

Your call of action - this is a pure academic study.

BEL I BHEL I ITC I NTPC I Satyam computers I Telco I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Trading tips for the week

The put / call ratio is climbing and is currently at the 0.30 : 1 levels and the outstanding positions in the derivatives segment have shown a marginal increase. The FII investments are continuing to remain negative.
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.
The impeding expiry of the April series will see offloading and higher volatility in the near term.
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.