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.

Bajaj Auto - this 2 wheeler major has been recommended in the previous editions dtd Dec 05 & Dec 12 click here to view the previous files. The scrip has been gaining upward momentum and the chart indicates a higher tops and bottoms formation in the making. The scrip has a high relative strength of 198 ( 100 = base ) as compared to the Sensex and is a market out-performer. Technical analysts will note the momentum oscillators moving in tandem with the price graph and are in a buy mode. The scrip has indicated a breakout above a 3 month congestion level of 1060 levels. It is crucial that the scrip stays above this level in the coming week, so that the floor price remains intact. We recommend a buy on the scrip for the disciplined and patient trader / investor for a pre-budget play.

Bharat Electronics - This scrip is another market out-performer with high relative strength as the reading is 368 ( 100 = base ). The earlier recos dtd Nov 07, Nov 14 & Nov 27 have seen profits as the scrip has made higher tops and bottoms formations. click here to view the previous files. Technical analysts will note that the scrip has closed at it's lifetime high ( closing basis ) though the intraday highs are higher. Since closing levels are more significant than intraday fluctuations, we assign higher weightage to the strength displayed on a closing basis. The 630 levels are a medium term congestion level that this scrip has managed to surpass on a closing basis and should not close below this crucial threshold in the coming weeks. We recommend a buy on this counter for the discerning investor.

BHEL - this electricals major is showing a very strong chart formation as the scrip shows a higher tops and bottoms formation, high relative strength of 657 ( 100 = base ) and a lifetime high achieved this week. Our investors will recollect the scrip recommended in the previous week's edition dtd Dec 12 has performed as per our expectations. click here to view the previous files. The short term congestion level of 685 levels have been surpassed and the scrip is in a zero resistance area as there is no past recorded previous top which can act as a barrier. We recommend a buy on this counter for a patient trader / investor.

Dr Reddy - This pharmaceuticals major was recommended by us in our earlier editions dtd Nov 07, Nov 14, Nov 21, Nov 28 and Dec 05. click here to view the previous files. Technical analysts will note how the scrip makes higher tops and bottoms formations and the oscillators are moving in tandem with the price chart. The scrip enjoys a high relative strength of 570 ( 100 = base ) though the same has been falling since the beginning of this year. What is noteworthy is the fact that the pharmaceutical segment is seen as a defensive play in turbulent equity markets and any correction in the markets will be seen as sign of strength for this segment. Note the rounding bottom formation on the price chart and the intra-week high of 849 which is higher than the 835 congestion band. We recommend a buy.

Gujarat Ambuja Cements - This cement major is in a major uptrend and is showing signs of high strength as the RSC reading is 285 ( 100 = base ) and a higher tops and bottoms formation is in progress. The scrip is currently at at it's lifetime highs on a closing basis on the monthly charts, though intra-month levels are higher. We had recommended this scrip vide our earlier newsletter dtd Dec 12 2004. click here to view the previous files. We advocate a buy on this counter for the patient investor / trader.

Glaxo Smithkline Pharma - This MNC pharmaceuticals major is a market out-performer with an extremely high relative strength of 400 ( 100 = base ) and has been a frequent recommendation in our newsletters. Earlier recommendations dtd Nov 07, Nov 21 and Dec 12 has been profitable and technical analysts may note that the scrip quotes at it's highest since Dec ' 99 levels. Click here to view the previous files. That is a sign of bullishness on the counter. We recommend a buy for the delivery based investors.

Grasim - this scrip is another high performance scrip with a high relative strength and oscillator support as the graphic below shows. Technical analysts will note that the scrip has managed to hit a lifetime high as the closing above the 1260 levels has propelled it to a new trading zone with no recorded resistance levels. We have recommended this scrip earlier vide our newsletter dtd. Dec 5, 2004. Click here to view the previous files. The scrip has performed well and we recommend a hold for now and buy on declines for the value investor.

Mah & Mah - this scrip has been a star performer from our recent recommendations dtd Nov 14, Nov 27, Dec 12 and Dec 19. Click here to view the previous files. The scrip has returned ample profits to traders and investors alike and has managed to make a lifetime high in the bargain. The closing has been strong and technical analysts will remember that we had forecast a bullishness on this counter after the 528 levels are surpassed. The other bullish triggers are a flag formation which points to a level of 600 + in the medium term and an inverted head and shoulders formation which are both measuring moves. The oscillators are supporting the upmove and we recommend a hold on existing positions and buy on declines for the discerning investors.

Tata Tele - this scrip was recommended by us a delivery pick in our edition dtd May 12 2004 and has appreciated sharply in the week gone by. Click here to view the previous files. the chart pattern suggests a bullish wedge formation and a price target of 30 levels which was forecast stands re-affirmed. We recommend a buy on the counter on declines. existing positions maybe held for the medium / long term.

Tata Tea - This FMCG major was recommended recently in our newsletter dtd Nov 27 and Dec 5, 2004. Click here to view the previous files. Apart from a high relative strength of 165 ( 100 = base ), the chart pattern shows good strength as the higher tops and bottoms formation are in progress since Jan ' 03. Technical analysts will note that the scrip always received excellent support at it's medium term average and has seldom closed below it since Jan 03. That shows extreme support on declines from bulls. The scrip has managed to close at it's highest levels after Feb 2000 and that is a sign of strength. The congestion levels of 448 are cleared conclusively on a closing basis and we recommend a buy on declines.

BSE Sensex - The Sensex is showing a corrective mood as the recent highs have seen sharp selling pressure. It maybe noted the higher tops and bottoms formation show a likely support at the 6290 levels. Should that support be violated, expect sharper falls to the 6230 levels. Upsides are likely to be capped at the 6450 levels in the coming week. Only after the recent tops are surpassed convincingly, is the new rally likely to commence.

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

Nifty 50 - the Nifty is also showing signs of correcting as the 2039 top is seeing selling pressure. The immediate support base is at the 1990 - 1995 levels. Should that level be violated, expect the 1955 - 1962 levels to see buying support. Only once the 2040 levels are surpassed convincingly, is the new upmove likely to start.

Your call of action - Buy the January futures ( trading at Rs 4 discount to cash ) at the 1995 levels and hold with a stop loss at the 1984 mark. Expect profit taking at the 2016 - 2020 in a conducive market in the near / medium term.

CNX IT - this index is unable to surpass the previous top at the 3013 levels and unless that is achieved, expect a consolidation phase which will see support at the 2885 levels. If the 2885 levels are broken, expect weakness as this is the 30 day SMA support and has not been violated since 6 months.

Your call of action - Buy the Dec futures at the 2910 levels in a falling market and hold with a stop loss at the 2875 levels. Expect profit taking at the 2950 - 2960 levels in the short / medium term in a conducive market.

Dow Jones Industrial Average - The Dow has made a firm upmove as the closing has been above a congestion level of 10635 and should it manage to close above this level in the coming week, we expect the 10800 levels to be surpassed in the pre-christmas euphoria. On the lower side, expect the 10500 levels to be the immediate floor price.

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.

Bajaj Auto I BEL I BHEL I Dr Reddy I Guj Amb Cem I Glaxo I Grasim I Mah Mah I Tata Tele I Tata Tea 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 making similar chart patterns like the Dow Jones and is likely to face resistance at the 2185 levels which are a congestion band for this index. Should the 2200 levels be surpassed, expect a flag formation to be completed and a fresh bullishness to commence. Lower levels will see support at the 2105 levels in the coming week.

Nasdaq - Weekly chart

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

Bajaj Auto I BEL I BHEL I Dr Reddy I Guj Amb Cem I Glaxo I Grasim I Mah Mah I Tata Tele I Tata Tea I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

FTSE - This index is showing signs of weakness as compared to its US counterparts. The 4850 levels are a threshold above which bullishness is likely and only above this level will the upmove gain momentum and credibility. On the lower side, expect support at the 4596 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.

Bajaj Auto I BEL I BHEL I Dr Reddy I Guj Amb Cem I Glaxo I Grasim I Mah Mah I Tata Tele I Tata Tea 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 falling and is currently at the 0.32 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative degeneration. 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.
The index heavy-weights are showing weakness again. This in turn will drag the indices and cause a downward correction. Buying must be selective and initiated cautiously.
The impeding expiry of the December 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.