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.

ABB - this power major is in an intermediate uptrend and is a market out-performer in the recent past. The bouyancy in the power sector is boosting sentiments for the sector and by default, for this counter too. The stock is making higher tops and bottoms, and new highs every week since the last 5 months. The oscillators are signaling a bullishness which is an added positive. This counter is a good buy for the discerning delivery investor.

Ashok Leyland - This south based commercial vehicles manufacturer was another scrip recommended frequently in the last few weeks and 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 appetite. The 30 day SMA ( simple moving average ) is a historical support and is currently poised at the 148 levels. Last week, we had forecasted a target price of 165 which was met on Aug 14, 2003.

Bajaj Auto - This 2 wheeler major is in an uptrend and is reaping the rewards of a re-worked business focus. The company is grabbing market share and exports are being pushed with vigour. The scrip has vaulted above the previous congestion / resistance zone and should it manage to stay above the 675 levels, expect the upmove to extend itself. We see strong support at the 620 levels and foresee the possibility of 710 levels in a conducive market. Short term traders may use the support provided by the 13 day SMA ( 650) for initiating intraday / short term long buys.

Bharat Forge - This auto ancillary major has been a frequent recommendation in our flavours edition since May 03 when the price was at 300 levels. The counter was recommended again in our 4/7/03, 11/7/03, 18/7/03, 25/7/03, 1/8/03 editions. The counter has returned excellent profits on investments and is still a good buy on declines / hold at current levels. We expect the 500 mark to be reached in the near future in a conducive market.

BPCL - This PSU refining major is recovering lost ground after the disinvestment was reported to be postponed. The scrip has left an open gap on the downside and is currently trading near that level of 292 - 295. The oscillators are showing a fair probability of revival and a sharp fall is unlikely - barring unforeseen circumstances. Therefore, this scrip is an excellent fixed return candidate.

Dabur - Last week, this domestic pharmaceuticals / FMCG major was recommended at 60 levels ( which has yielded a 10 % profit in a week ) as it 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. We re-iterate a buy on this counter for a patient investor.

Digital Globalsoft - this software midcap scrip is in a downtrend due to dual reasons - the Samir Arora effect and the under-performance of the sector in the recent past. The oscillators are signaling an underlying weakness on the counter and we expect a further weakness in the scrip in the near future. This aspect makes this counter a good fixed income bet for investors.

Gas Authority - This PSU gas major was recommended as a buy between 112 - 118 and was triggered on 5/8/03 & 6/8/03. Those positions are deeply in the money. The scrip 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.

Glaxo Pharmaceuticals - This pharma MNC major was recommended by us on 4/7/03 and 18/7/03 in the flavours edition at the 360 levels and has returned a solid 10 % profit within a month. This company has been restructuring aggressively and will be the biggest beneficiary of the EMR / IPR regime post 2005. The 13 & 30 day SMA's are good short term supports and the scrip can be bought at these levels for delivery purposes.

Hind Motors - this passenger cars manufacturer was recommended in our July 12, 2003 edition at Rs 12 - 13 which was triggered immediately. The scrip has appreciated to 18 levels and is a good buy on declines / hold at present levels. The old war horse - Ambassador has been given a facelift and re-launched. The automobile sector is undergoing a bouyant phase and this low priced scrip should see good returns in the coming few months. We reiterate a buy on this counter for patient investors.

IPCL - This petrochem major is in an uptrend and has historically taken support at the 30 day SMA which is validated since the last 14 weeks. The oscillators are supportive of the upmove and the previous resistance levels of 131 levels have been surpassed. Should the scrip close above the 135 levels for the next 2-3 sessions, expect a fresh upmove. We recommend a buy in small lots.

Kirloskar Ferrous - this counter was recommended in our earlier edition of 26/7/03 and has performed exceedingly well. The counter is still affirmed as a buy on declines for patient investors with a medium term perspective. Last week we had advocated that once the counter closes above the 17 - 18 levels consistently, one could expect a sharper upmove. That reading has been vindicated as the scrip has touched 20 levels. We re-affirm our buy recommendation though on declines.

Mastershares - this counter has been recommended since May this year and has appreciated from the 10 Rs levels to Rs 13 - a good 30 % return with limited downsides. As we have been advocating, this is a good bet for returns conscious investor. As long as the markets remain in an uptrend, we expect this scrip's NAV to rise and a commensurate rally in the market price. We put out a buy on declines as a major appreciation has already occurred.

NIIT - This counter is in an intermediate downtrend and the oscillators are pointing towards a drift. This counter is therefore a good fixed return bet as the upsides are likely to be limited in the run up to the August series expiry.

ONGC - this counter was recommended by us last week via SMS at 480 levels and has paid handsome rewards to bulls as it has appreciated over 80 rupees in 2 weeks since then. The positive kicker has been the retail plans by the company and expected liberalisation in the gas pricing. The oscillators are pointing towards a rally and support fresh bullish positions on the counter - albeit on declines.

BSE Sensex - Last week, we advocated that the Sensex was expected to see a minor resistance is at the 3939 and the major resistance will be at the 4127 levels. On the downside, 3840 remains a good support in the immediate future. The Sensex has failed to close above that 3939 level and that should be the next minor intraday resistance. Once the previous high of 3959 is surpassed on a closing basis, expect a sharper upmove.

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 upmove may see a hurdle at the 1253 levels. On the downside, we expected immediate support at the 1184 - 1188 levels. The Nifty failed to close above the 1253 levels and the oscillators are also showing a sign of fatigue. That should be a warning signal for short term / intraday players to reduce excessive long positions. Should the Nifty surpass the 1253 hurdle with good volumes and a highly positive market breadth, we expect the 1280 levels to be the next target objective.

Your call of action - Derivative traders having initiated long positions earlier may hold the same with a stop loss at the 1205 levels. Take fresh long positions only for short term trading purposes above a significant closing over 1255 levels, maintain a stop loss at the 1241 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. On the lower side, the absolute short term support is at the 8995 levels. As per our analysis, the Dow average been unable to surpass the congestion levels for the 11 th week in a row. This is a sign of weakness. However, the last week has seen a firm closing and should the dow close above the 9380 mark, expect the index to test the 9500 levels.

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.

Nasdaq - This new economy benchmark index measures the outlook on the Nasdaq exchange. The index has violated the short term averages and fallen marginally. This signals weakness in the domestic software stocks too. Last week, we expected immediate support at the 1610 levels and a possible bounce-back as the oscillators were oversold - that view has held ground. However, that should not construed as an end to the bearishness. Should the Nasdaq close below the 1684 levels, expect further bearishness.

Nasdaq 50 - 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 had been unable to surpass the downward sloping channel. That resistance point was 4220 which the FTSE has surpassed. The oscillators are signalling a possibility of higher levels in the coming weeks. On the downside, the support to watch would be 3950 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

The put / call ratio is sobering down, which shows a marginal liquidation of long positions. The previous week saw falls occurring on higher volumes and rallies on thinner volumes - another sign of caution. The impeding expiry of Aug derivatives series looming large, we advocate trading on lower 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 suggest a higher exposure to the steady returns route rather than speculative exposure due to higher risk component.
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.