The Professional Ticker Reader TM

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Flavours of the week                                                            Dec 12, 2004

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.

ACC - This cement major was recommended as a buy in the previous editions dtd Nov 21 & Dec 05 as the scrip was looking like a promising market out-performer. Click here to view the previous reports. The stock has lived up to our expectation and closed above a crucial resistance level. Technical chartists may note that the scrip has closed at it's highest levels after 1992 and that indicates high degree of bullishness on the counter. The scrip has a high relative strength of 168 ( 100 = base ) and is expected to perform better. We recommend a hold for now & buy on declines for the patient trader and medium term investor.

Your call of action - .

• Investors / cash segment players - Hold previous positions and add on declines at the 305 levels. Hold with a stop loss at the 288 levels. Expect to book profits at the 335 - 340 levels in the medium term in a conducive market scenario.

• Aggressive F&O traders - Buy the December futures above the 315 levels in a firm market and hold with a stop loss at Rs 309 levels. Expect profit taking at Rs 328 in the short / medium term. Longer term players may expect even higher levels in a conducive market. Options players may contemplate buying the Dec 330 calls at a premium of Rs 3.

• Derivatives contract size - Market lot = 1,500 shares. F&O margin = approx Rs 77,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Bajaj Auto - this scrip was another recommendation made earlier in the edition dtd Dec 05, 2004. Click here to view the previous reports. The scrip has reacted lower and closed at 1020 levels which is inching closer to it's short term ( 13 week SMA ). The scrip has a double top resistance at the 1058 levels, which needs to be surpassed with higher volumes to signal a fresh bullishness. The scrip has a very high relative strength of 206 ( 100 = base ) and is a market out-performer. We recommend a hold on the previous positions with buying on declines.

Your call of action - .

• Investors / cash segment players - hold existing positions and buy on declines to the 995 levels and hold with a stop loss at the 972 levels. Expect to book partial profits at the 1040 levels and complete profits at the 1080 levels in the medium in a conducive market

• Aggressive F&O traders - Hold the existing positions and buy the December futures at lower levels of 1010 and keep a stop loss at the 984 levels. Expect profit taking at the 1040 in the short term in a conducive market. Options players do not have much of a choice as the scrip is liquid in this segment.

• Derivatives contract size - Market lot = 400 shares. F&O margin = approx Rs 65,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

BHEL - this scrip was recommended as a buy in the earlier editions dtd Oct 10, 2004 on grounds of a possible breakout and a higher tops and bottoms formation. Click here to view the previous reports. Technical chartists will note that this counter has closed at a life time high and that is a sign of strength. A sustained and conclusive close above the 695 levels on heavy volumes will be a confirmatory signal of continued bullishness on the counter. We recommend a buy on the counter for the patient investor / trader. The scrip has a very high relative strength of 609 ( 100 = base ) and is a market out-performer.

Your call of action - .

• Investors / cash segment players - Buy on declines to the 660 - 665 levels and hold with a stop loss at the 635 levels. Expect to book profits at the 725 - 735 levels in the medium term ( pre-budget ) in a conducive market scenario.

• Aggressive F&O traders - Buy the January futures ( currently trading at Rs 6 discount to cash ) at the 670 levels and hold with a stop loss at the 659 levels. Expect profit taking at the 694 levels. Options players may contemplate buying the December 680 calls at a premium of Rs 15 - 17.

• Derivatives contract size - Market lot = 600 shares. F&O margin = approx Rs 66,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Guj Ambuja Cements - this scrip was recommended vide our edition dtd Oct 03, 2004 as the scrip was on the threshold of a breakout above a previous resistance.  Click here to view the previous reports. The scrip has performed exceedingly well and lived upto our expectations. The scrip has a very high relative strength of 276 ( base = 100 ) and is likely to remain a market out-performer. Technical chartists will note that the 355 levels are an immediate floor level and the scrip has managed to close at it's lifetime high. We recommend a long term buy on this counter.

Your call of action - .

• Investors / cash segment players - Hold existing long positions and buy afresh on lower levels at the 370 mark. Maintain a stop loss at the 355 levels and expect to book profits at the 425 - 430 levels in the pre budget scenario in a bullish market.

• Aggressive F&O traders - Buy the January futures at the 375 - 377 levels and hold with a stop loss at the 365 mark. Expect profit taking at the 394 levels in a firm market in the short / medium term. Options players may contemplate buying the 390 December calls at Rs 5 premium.

• Derivatives contract size - Market lot = 1,100 shares. F&O margin = approx Rs 66,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Glaxo Pharma - this MNC pharmaceuticals major has been a frequent recommendation from our side and is a must have in your portfolio in the pharma segment. The recent recommendations were in the editions Dtd Nov 07 & 21 Click here to view the previous reports. Though the buy initiated at the 720 levels is in the money, the scrip is likely to surge higher only after the 755 levels are surpassed convincingly withy high volumes. The scrip has very high relative strength of 382 ( 100 = base ) and is a market out-performer. We recommend a hold on this scrip and a buy on declines.

Your call of action -

• Investors / cash segment players - buy on declines to the 715 - 725 levels and hold with a stop loss at the 685 levels. Expect profit taking at the 825 + levels in the pre-budget period in a conducive market scenario.

• Aggressive F&O traders - F&O n/a.

• Derivatives contract size - F&O n/a.

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

HCL Technologies - this technology major is showing signs of weakness as the chart is indicating a head and shoulder formation on the daily charts. The scrip has fallen below the neckline and is appearing posed for a fall to the 200 day SMA which is at the 320 levels. We advocate selling short on rallies to the 355 - 360 levels for the adventurous traders with a high risk appetite.

Your call of action - .

• Investors / cash segment players - None.

• Aggressive F&O traders - Short sell the December futures at the 350 - 355 levels and maintain a strict stop loss at the 365 levels. Expect to book profits at the 325 - 330 levels in a conducive market scenario in the short term. Options players may contemplate buying the December 350 puts at a premium of Rs 5.

• Derivatives contract size - Market lot = 1,300 shares. F&O margin = approx Rs 77,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

HDFC Bank - this new age banking major was recommended in our edition dtd Nov 07 at Rs 410 and has appreciated over 20 % since then !! Click here to view the previous reports. This counter is a leader in terms of relative strength in it's peer group and has a very high relative strength of 1230 ( 100 = base ) vis-a-vis the BSE Sensex. The scrip seldom trades below it's short / medium term averages and merits a buy on declines.  

Your call of action - .

• Investors / cash segment players - buy on major declines to the 455 levels and hold with a liberal stop loss at the 435 levels. We expect the 500 levels to be tested again in the pre-budget scenario and recommend a medium scale exposure on the scrip.

• Aggressive F&O traders - Buy the December futures on declines to the 460 and maintain a stop loss at the 446 levels. Expect profit taking at the 484 levels in a conducive market in the near / medium term.

• Derivatives contract size - Market lot = 800 shares. F&O margin = approx Rs 60,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Mahindra & Mahindra - this scrip has been another frequent recommendation in the weekly / daily / SMS recommendations. This edition recommended the counter vide editions Dtd Nov 14 & 27, Dec 05 Click here to view the previous reports. The scrip has clocked a superb performance and has been a market out-performer. The relative strength of this scrip is very high at 230 ( 100 = base ) and the scrip is on the threshold of a breakout of a critical congestion level at the 525 mark, beyond which the counter enters a new trading zone. We recommend a hold on existing positions with a buy on declines. Technical traders will note the flag formation which indicates a target of 620 + levels in the medium / long term

Your call of action - .

• Investors / cash segment players - Hold existing positions and buy on declines to the 488 levels with a stop loss at the 468 mark. Expect to book profits at the 565 - 575 levels in the pre-budget scenario in a conducive market.

• Aggressive F&O traders - Hold the existing long positions and buy the January futures at the 495 levels, with a stop loss at the 484 mark. Expect to book profits at the 525 levels in the short term in a conducive market. Options players may contemplate buying the December 520 calls at Rs 8.

• Derivatives contract size - Market lot = 625 shares. F&O margin = approx Rs 53,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Maruti - this automobile major is showing signs of strength as the scrip has surged past the 52 week average and is making higher tops and bottoms formation. Enjoying a higher relative strength of 258 ( 100 = base ), this scrip is trading near a congestion level of 440 which it must stay above in the coming week. A rapid appreciation to the 465 - 470 is likely upon a convincing breakout above 440 with very high volumes.

Your call of action - .

• Investors / cash segment players - Buy as long as the scrip trades above the 440 levels and manages a sustained close above it for a few sessions with high volumes. Expect to book profits at the 475 levels in the short / medium term. Hold with a stop loss at the 425 levels.

• Aggressive F&O traders - Buy the December futures above the 442 levels with a stop loss at the 432 levels and a target of 464 levels in the near / medium in a conducive market. Options players may contemplate buying the December 450 calls at a premium of Rs 8

• Derivatives contract size - Market lot = 400 shares. F&O margin = approx Rs 27,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

MTNL - this PSU telecom major was recommended last week as a breakout has been confirmed and a flag formation observed on the charts. Click here to view the previous reports. We recommend buying only for the aggressive and high risk appetite players for the short term. Technical traders may note that the scrip attracts very high volumes and open interest in the cash and f&o segments.

Your call of action - .

• Investors / cash segment players - Buy as long as the scrip stays above the 150 mark and hold with a stop loss at the 142 / 143 levels. Expect profit taking at the 164 levels in the near / medium term.

• Aggressive F&O traders - Buy the December futures at the current levels and maintain a stop loss at the 148 levels. Expect to book profits at the 164 / 167 levels in the short / medium term in a conducive market.

• Derivatives contract size - Market lot = 1,600 shares. F&O margin = approx Rs 41,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

TCS - this bell-weather technology counter was recommended in the past editions 17 oct, 2004 and  14 & 27 Nov, 2004 and the most recent reco was on Dec 05, 2004 Click here to view the previous reports. This scrip has never failed to perform as per our bullish expectations and has turned upwards after testing it's 30 day SMA. It is typical of bullish counters that corrections are invariably short and span under 25 % of the upmove. That has been a case with TCS and we recommend a medium / long term buy for the patient investors / traders.

Your call of action - .

• Investors / cash segment players - Buy on declines to the 1200 levels and hold with a stop loss at the 1160 levels. Expect to book profits at the 1320 levels in the pre budget period in a conducive scenario.

• Aggressive F&O traders - Buy the December futures on declines to the 1208 levels and hold with a stop loss at the 1182 levels. Expect profit taking at the 1244 mark in the short term in a conducive market. Options players may contemplate buying the December 1260 calls at a premium of Rs 14.

• Derivatives contract size - Market lot = 250 shares. F&O margin = approx Rs 48,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Tata Power - this power major was recommended vide our edition dtd Nov 14 and has appreciated handsomely since then. Click here to view the previous reports. The scrip is trading above recent tops and it's 52 week SMA. The scrip has a high relative strength reading of 316 ( 100 = base ) and is likely to appreciate further. We recommend a trading buy on the counter.

Your call of action - .

• Investors / cash segment players - Buy at the current levels and hold with a stop loss at the 340 levels. Expect to book profits at the 380 levels in a few weeks time in conducive market.

• Aggressive F&O traders - Buy the December futures above the 364 levels and hold with a stop loss at the 353 levels. Expect profit taking at the 378 - 380 levels in a conducive market in the short / medium term.

• Derivatives contract size - Market lot = 800 shares. F&O margin = approx Rs 46,000 (subject to change daily )

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Indices - domestic

BSE Sensex - The sensex has reacted lower in line with the overall market and is at the threshold of it's immediate support at the 13 day SMA at the 6215 levels. Should this level be violated, technically speaking a meaningful support exists only at the 6088 levels thereafter. Watch the 6154 levels where trading support can come from short covering / speculative buying, however, we do not foresee a significant fall in the markets in the near term.

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

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Nifty 50 - The Nifty has come down to test it's 13 day SMA and should it violate this crucial support at the 1962 levels, a fall to the 1944 levels is possible. On the upsides, we foresee a resistance at the 2010 - 2012 levels which need to be surpassed for the Nifty to test the 2035 - 2040 levels. We remain positive on the markets in the near term.

Your  call of  action - We feel that buying is justified on the Nifty on lower levels at the 1958 levels and a stop loss be maintained at the 1946 mark. Expect profit taking at the 1984 levels in a conducive market in the near / medium term. Trade the December futures for now.

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

CNX IT - this technology index is making rising tops and bottoms formations and is still bullish, though a consolidation is seen on the charts. The 2800 levels are crucial floor level to watch out for and value buying and short covering on the technology counters is likely to see a rebound on this index in the near term.

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

ACC I Bajaj Auto I Bhel I Guj Amb Cements I Glaxo I HCL Tech I HDFC Bank I Mah & Mah I Maruti I MTNL I TCS I Tata Power I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Have a  profitable week.

 

Vijay L 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 any securities mentioned  above.

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