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.

ACC - This cement major is in an intermediate uptrend and is trading at the highest levels since March 2000, that was the peak of the Sensex at 6100. Though the Sensex is 3800 levels, ACC is near those levels again - a clear sign of strength. The logic in the cement sector bullishness is that the sales patterns are cyclical and tend to firm up after the monsoons. The current boom in cement stocks is in anticipation of improved offtake and the boom in the housing market. The oscillators are supportive of an upmove and point towards a further rise in an conducive market. Since the stock has appreciated significantly in the last 4 sessions, cautious players would do well to buy on slight declines. Traded quantities should be curtailed.

Ashok Leyland - This south based commercial vehicles manufacturer is rallying on the back of a boom in the sector as the business is gradually changing gears. Older vehicles are being phased out, the economy is improving ( CV sales are GDP sensitive ) and oil prices are stable. The company is also rationalising costs, which is likely to show in the financials in the coming quarters. A buy for patient delivery based investors with a lower risk apetite. The 30 day SMA ( simple moving average ) is a historical support and is currently poised at the 130 levels.

Bharat Forge - this auto ancillary has had a tremendous run upwards as the automobile sector witnesses a bouyant phase. Riding on rising sales and investment buying support, this stock is a leading market out-performer on the market watchers' radar screens. We have been repeatedly recommending this counter in in the previous editions dated 4/7, 11/7, 18/7 & 25/7 which have been highly profitable. Last week, we had recommended this counter at the 390 levels which has not yet been triggered. That recommendation is still valid for patients investors as the stock has already appreciated significantly in the short, and future appreciation maybe slower. Results declared were upbeat and the buying momentum is likely to continue. We feel this counter is a must for all long term delivery portfolios.

Century Textiles - Last week we had forecasted that this old economy stalwart has been forgotten by the markets for an extended period, and is now staging a comeback. The company has launched a line of branded readymade garments - a high margin product line. The chart pattern shows a rough and ready support at the 30 day SMA which is currently poised at the 80 levels. Once the previous top of 87 was cleared, we expected the counter to rally further upto 92 levels. Our expectations were surpassed and the stock has surged to 95 levels. Should the markets be firm, we expect the counter to stabilise at higher levels.

Dabur - This domestic pharmaceuticals / FMCG major is recouping lost ground as the company is reinventing it's business focus. The "Real" brand of juices are re-launching with a renewed focus and the management reports foray into the oncology ( cancer ), ayurvedic formulations and personal care products. Professional management has been inducted and the company should see improved margins in the coming quarters. The markets are cheering the change in outlook way ahead of the results. The stock has appreciated 40 % in 3 months and will see further upsides in the near futures. The bullishness in the pharmaceutical sector will see improved valuations on this counter also.

Gas Authority - This PSU gas major is in an intermediate uptrend as the stock has gained over 50 % in the last 15 weeks. The recent media reports of de-regulation of the gas sector is likely to see free pricing ( upward revision ) of natural gas prices. The other positive trigger for the stock is the carriage of fibre optic cable along it's gas grid in Rajasthan & Gujarat, which will result in additional revenues for the company. A buy in small lots for PSU stock enthusiasts. The oscillators are signaling a bullishness in the short term.

Gujarat Ambuja Cements - this cement major is a strong market out-performer as it's relative strength is invariably higher than the indices. That makes this scrip a safer bet for traders / investors in volatile markets. The counter has had a good run and is likely to continue holding on to gains. Historically, the scrip gets support at the 30 day SMA which is currently poised at the 214 levels. The counter was recommended on 11/7/03, 18/7/03 and 25/7/03 as a buy on declines. The counter was forecasted to go into a new trading zone above the 216 - 217 levels and was predicted to continue out-performing markets on the whole. These recommendations have yielded superlative profits for delivery, F&O and fixed income investors. We re-affirm a buy on the counter - albeit on significant declines.

Hind Lever - This FMCG / MNC major is on the sell list of most major institutional players. The results have been disappointing and the topline is continuing to be a cause for concern. We do not foresee a significant move above the 182 - 184 levels and therefore the stock is a good sell / synthetic sell by way of fixed income strategy. The oscillators are pointing towards a marginal fall in the short term. Below a closing of 162, expect a sharper fall.

Hero Honda - This two wheeler major is in a major uptrend with all the classic criteria of a bull run on the counter being fulfilled - moving averages are pointing higher, stock price bars are making higher tops and bottoms, oscillators are showing strength and volumes are strong. The main triggers are plentiful monsoons, strong rural demand, new product launches and steady petroleum prices. The recent dividend announcement is also an investor friendly gesture. This counter is an institutional favourite and we recommend a buy for patient investors with a medium term perspective and fixed return investors.

Hughes Software - This telecom software major is in an uptrend due to a variety of reasons - bullishness in the telecom space, news of a stake placement to a high profile foreign investor and improved prospects for the software stocks. We recommend a buy on declines in small lots only.

ICICI Bank - This private sector universal bank is on a roll as the banking stocks are in the investor focus for a variety of reasons. The economic outlook being optimistic, higher credit offtake is expected. The consumer / automobile loan business is expanding and FII investments in the sector is expected to be high. The NPA securitisation act is also likely to add teeth to the banks. The stock is a good buy for patient investors.

India Cements - This south based cement company is now seeing a turnaround in the prospects as the recent numbers announced showed a lower loss this quarter. The boom in the peers is likely to help the sentiments for this counter also as the price is firming up gradually. The oscillators are pointing towards strength and the upmove is likely to continue. This stock is ideal for investors looking for low priced scrips. We put out a buy on the counter.

Indian Hotels - This Tata group hospitality major is witnessing a bullishness in outlook after the Gulf war ended and the business & leisure travellers are likely to boost the bottomlines of the sector. The stock may see a short term resistance at the recent top of 278 and should the counter see a continous close above these levels, we expect a sharper upmove. We recommend a buy on the counter.

Infosys - This software major is slowly but surely clawing up after witnessing a huge fall after the previous quarters results. The counter has been taking support at the 13 & 30 day SMA's and rallying from these supports. last week, we had advocated a buy on the counter at the 3480 levels which was triggered on July 29, 2003. The profit target was 3650 which was achieved during the week itself. We had advocated the resistance on the upsides would be at the 200 day SMA at the 3800 levels. That computation has proved to be highly profitable and the resistance has also been at our expected levels. The oscillators are pointing towards an upmove.

Reliance Capital - This NBFC from the Reliance group is in an uptrend and was recommended earlier - profitably so. The 30 day SMA is a historical support and is currently placed at the 71 levels. We expect the overall markets to be bullish and since RCFT has a major investment in equities, the NAV of it's investment portfolio will appreciate too. We recommend a buy above the 77 levels which are a previous resistance point. The oscillators are signalling a higher probability of a rally - subject to the confirmation of levels above 77.

Reliance Industries - This old economy leader is witnessing an upsurge after it's quarterly results and has also surpassed the 356 resistance in the bargain. This is a positive indicator for the counter. The oscillators are supportive of an upmove and the likelihood of higher levels in the post result sessions is fair to high. Speculative / trading buy recommended.

State Bank - this counter has become a leading investment / trading scrip for traders and institutional players alike. Our investors will recall that we recommended this stock last fortnight at Rs 400 with a stop-loss at the 380 levels and a target of 444. That recommendation has turned out to be highly profitable in the cash and F&O segments. This counter has hit a 5 year high whereas the indices are at 26 month highs. There are reports of FII limits in the banking sector being hiked, which is boosting the sentiments for banks. Being a leading bank with the highest market penetration, this counter is the most obvious choice for strong players. A good buy on declines. Once the 433 previous top is surpassed, expect accelerated rallies. Historical support at the 13 & 30 day SMA is strong and therefore, any fall below the 400 levels is not highly likely.

Siemens - This MNC electrical goods major is one of our most favoured stocks as the restructuring efforts of the management are now showing on the bottomline. Expensive debts are swapped / prepaid, VRS implemented and non-core businesses hived off. We advocate a buy on all declines for patient investors.

Tata Teleservices - This emerging telecom player is likely to see a higher market share as the fixed line telephony market witnesses a rapid change. The stock has appreciated 50 % in the last quarter and is a good bet for investors looking for low priced shares. We see good support at the 8 Rupee levels and patient investors with a 1 year perspective will yield high returns.

Wipro - The counter is showing signs of coming out of a congestive pattern and the short term moving averages are crossing over in a bullish manner. The oscillators are rising towards a buy signal which will be confirmed as and when the scrip closes above the 1030 mark. The software sector is showing signs of revival and this counter will also rally in tandem with it's peers. Being a speculative grade recommendation, we advocate taking small positions only.

BSE Sensex - Last fortnight, we advocated that the Sensex was expected to see a meaningful support at the 3560 levels. That was at divergence with a large section of the markets which saw a bigger fall. We also predicted that should the 3750 levels be surpassed on a continous closing basis, the next leg of the upmove would commence. In the absolute short term, expect trading support at the 3720 levels. On the upsides, we expect selling to emerge at the 3870 - 3890 levels.

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

Nifty 50 - Last week, we had advocated that the Nifty was likely to see a fresh upmove once the previous top of 1176 was surpassed on a closing basis. That hypothesis was justified as the Nifty came to kissing distance of 1200. The 1199 levels have proved to be a short term hurdle and a minor double top as the index has been unable to surpass that level on Thursday and Friday. Once the 1200 levels are surpassed, we expect resistance at the 1230 levels.

Your call of action - Derivative traders having initiated long positions may hold the same with a stop loss at the 1175 levels. Take fresh long positions only for trading purposes above a significant closing over 1200 levels, maintain a stop loss at the 1188 levels and a profit motive of 15 - 20 points.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. The previous fortnight has seen the Dow Jones moving in a short term downward sloping channel which could be a flag formation. Last week, we had forecasted that the same would be confirmed only upon the breakout from the channel top at the 9220 levels. Should the Dow Jones close above this level and remain above this, expect the fresh upmove to see acceleration in the coming week - possibly beyond the 9400 mark. On the lower side, the absolute support is at the 8925 levels. As per our analysis, the Dow average been unable to surpass the congestion levels for the 6 th week in a row. This is a sign of weakness.

Dow Jones Industrial average - Weekly chart

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

Nasdaq - This new economy benchmark index measures the outlook on the Nasdaq exchange. Though the index is making a saucer formation, the same is not supported by the short term momentum oscillators. The 30 day SMA is a good historical support and is poised at the 1700 levels. Should it close below these levels, expect weakness to set in on the index, thereby effecting the domestic technology stocks too. On the upside, the index can gain only if it clears the previous high of 1776 levels, which was advocated last week also. That will be THE threshold to to watch in the coming week

Nasdaq - Daily chart

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

FTSE - This index measures the outlook on the London stock exchange. The index has been making higher bottoms and tops on the weekly charts. Last week, we observed that the index has been unable to surpass the downward sloping channel. That resistance point is 4220 which the FTSE must surpass. In the coming week, our investors must watch these levels. On the downside, the support to watch would be 3890 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.

Trading tips for the week

Since the markets are likely to be volatile, we advocate trading on thinner volumes.
In the coming week, aim for safety first & capital appreciation later.
The index heavy-weights are now beginning to show strength and as long as Reliance, Hind Lever, Infosys, Telco, Tisco and ITC remain firm, expect the broader indices to be firm also.
We have recommended stocks that are to be bought for intraday / short term on downward supports, these counters will be highly speculative and therefore extra caution is advised on these trades.
Adhere to stop losses religously.
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 the stocks mentioned above.