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 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 on past occasions which have been highly profitable.

Your call of action - We recommend buying the scrip for delivery based investors ( derivatives are not available on the counter ) at the 345 - 350 levels with a room for downward averaging upto 335 levels. Maintain a stop-loss at the 325 levels and a profit target of 385 - 390 in a short time.

BHEL - this PSU electrical major is in a major uptrend as the stock makes regular new highs on the daily charts. The reasons are manifold - robust order book positions, PSU frenzy and a regular dividend record. The 13 day SMA has been a historic support for the counter where a stop loss maybe maintained. We recommend a buy in small lots.

Your call of action - We recommend buying the scrip for delivery based investors at the 275 levels with a stop loss at the 265 levels and a profit target of 290 in the short term. Futures traders may buy the July 2003 futures at a price of 277 and a stop loss be maintained at the 271 levels, with a profit target of 284 and an exhaustion of 288 in the near term - in a firm market. Options players may buy the July 2003 call options at a strike price of 290 and a premium of Rs 5.50 - 6.

BPCL - This PSU refining major was recommended last fortnight and has rewarded traders handsomely. The buy was recommended at near 275 levels and was triggered on June 24, 2003. This company is another PSU disinvestment story and should attract investor focus especially after the Maruti IPO success. The counter has been making new highs and is likely to sustain that upmove in the coming week. We recommend a buy on the counter. Hold existing positions and add on declines.

Your call of action - We recommend buying the scrip for delivery at the 280 - 282 levels in small quantities and keep some room for possible downward averaging. A stop loss at the 275 levels be maintained and expect a profit motive of 305. Futures traders may buy the July futures at 276 ( the July futures are quoting at a Rs 10 discount to cash ) and keep a stop loss at the 271 levels, with a profit motive of 286 - 288 levels. Options traders may buy the July 2003 calls at a strike price of 300 and a premium of Rs 5.50 - 6

Chambal Fertilisers - the current upmove in monsoon related stocks like fertilisers, consumer goods and agri chemicals has seen this fertiliser major rising steadily. Being a low priced stock has been a positive trigger for high volume based buying. The short term oscillators support the rally as volumes are rising. We recommend a buy on declines.

Your call of action - We recommend buying the scrip at 16 levels and maintaining a stop-loss at the 15 levels. Expect levels of Rs 19 in a firm market. Since derivatives are not available on this counter, this is a pure delivery recommendation.

Chennai Petroluem ( Madras Refinery ) - Another PSU story which is back in the reckoning after a brief consolidation. The stock has made a new top as the volumes and the oscillators signal heavy buying intrest. Being a low priced counter, small buying is recommended.

Your call of action - We recommend buying the scrip for delivery based traders at the current levels of 60 with a stop loss at the 54 and a price target of 68 in the near term. Buying is recommended in small quantities and room for averaging lower should be maintained. Since derivatives are not available on this counter, this is a pure delivery play.

Cipla - this domestic pharma major is in a minor uptrend after a steep and sustained fall since Jan 03. There is bouyancy in the pharma sector stocks and that is percolating down to this counter too as the price graph is trying to surpass the 200 day SMA. The oscillators are supporting the upmove as the volumes are also perking up. This counter is a speculative grade buy.

Your call of action - We recommend buying the scrip for delivery based buyers at the 815 levels or above - that too in a rallying market. Maintain a stop-loss at the 790 levels and a profit target of 850 levels in the near term. Derivatives players may contemplate buying the July 820 calls at a premium of Rs 30.

Glaxo - this pharmaceutical MNC major has been a frequent feature in our newsletter and has yielded superior profits for investors. The triggers are manifold - restructuring including selling off the Worli plant, VRS, selling off of the tail ended brands. The recent frenzy for pharma stocks has seen the counter gaining ground. As the WTO deadline for the EMR approaches, we expect better valuations for this largest player in the MNC pharma sector. A clear buy on declines.

Your call of action - We recommend buying the scrip for delivery based investors at the 365 levels in small quantities and keep a room for averaging upto the 350 levels. maintain a stop loss at the 345 levels and a profit target of 400 in the near future. Since derivatives are not available on this counter, this is a pure delivery play.

HPCL - This counter has been recommended by us in the Flavours edition since the 7 th of June. That recommendation has turned out to be highly profitable as the the counter has gained over 9 %. The stock is firming up on optimism on the disinvestment front as also overall market bullishness. A good buy on declines. The 13 day SMA is a historic support and should be used as a rough and ready stop loss level.

Your call of action - We recommend buying the scrip in the delivery segment at the 350 levels with a possibility of averaging upto the 344 levels and a stop loss at the 338 levels. Expect a rally upto the 375 levels in a short period in a conducive market. Futures traders may buy the July futures ( quoting at Rs 3 premium to cash ) at a price above 360 with a stop-loss at the 352 levels and a target of 374 in the short term. Options players should buy the July 2003 calls at a strike price of 350 and a premium of Rs 22.

Indian Hotels - this Tata group hospitality major has been recommended by us a few months ago after the Gulf war ended. It is widely expected that the business travellers will start trickling into the country after the war ended and the SARS scare has been certified as "under control" by the UNO. The counter has gained significantly since then, and is a strong market out-performer. We recommend a buy on the counter on declines.

Your call of action - We recommend buying the scrip for delivery based investors on declines of 250 - 255 and maintain a stop loss at the 240 levels. Expect a profit target of 288 in a conducive market. Since derivatives are not available on this counter, this is a pure delivery play.

ITC Ltd - this counter was advocated since the last 4 weeks and it was mentioned that there was likely to be a consolidation at the 725 levels before a fresh breakout was likely. The buy recommendation above the breakout level has turned out to be highly profitable as the stock hit an intra-day high of 781 after crossing the 727 hurdle. The 13 day SMA is a meaningful support at the 752 - 755 levels and traders can buy at these levels with a very short term perspective and keep trades for intra-day. Futures traders have had multiple profitable opportunities trading the near month futures on the long side as the stock has zoomed. Existing long positions entered at 725 levels maybe held with a stop-loss at the 763 levels.

Your call of action - We recommend holding the existing long positions. This counter will provide multiple opportunities in the coming week. Futures traders can buy long at the 760 levels ( futures trade at a 7 Rs discount to cash ), maintain a stop loss at the 753 levels and a profit target of Rs 775. Options traders can buy the July 760 calls at a premium of Rs 22 - 24.

Jindal Steel & Power - this steel sector player has been rallying ahead of it's peers in the same sector and is a strong market out-performer in the short term. The counter takes historical support at it's 200 day SMA and should present traders opportunities for buying at those levels and exiting in the short term at a good profit. A trading / speculative buy is recommended on declines.

Your call of action - We recommend buying the scrip for delivery based short term traders at the 475 - 480 levels and a stop loss at the 470 levels. Expect a price of 545 - 550 in a firm market. Since derivatives are not available on this counter, this is a pure delivery play.

Mah & Mah - this stock is another beneficiary of improved monsoons forecast as well as the outlook for the automobile sector. The counter has turned bullish and a strong market out-performer in the last few months. There is a fair bit of buying interest on the counter from operator / retail segments and we feel that the counter needs to consolidate at the current levels before the next leg of the rally can commence. There is news of the company exporting CKD kits in the overseas markets, which will be the next trigger. The recommendation last week of a buy above the 145 levels has been highly profitable.

Your call of action - We recommend buying the scrip in the cash segment at the 155 levels and hold with a stop loss at the 145 levels. expect a price target of Rs 175 in a conducive market in the near term. Futures traders may buy the July futures at 156 levels, with a stop loss at the 148 levels. Expect a price target of Rs 170 levels. Options traders may contemplate buying the July calls at a strike price of Rs 150 and a premium of Rs 11 - 12

Mastershares - this counter was recommended by us at the 10.25 levels and profit taking was recommended at the 11.25 levels in May 2003. That recommendation proved highly profitable as approximately 10 % profits were booked in under a months time. As the markets rally, the NAV of this scrip will also surge, leading to a price appreciation. What makes this scrip attractive is the low price and a limited downside. A buy on declines.

Your call of action - We recommend buying the scrip for delivery based investors at lower levels of 11.50 and keep room for averaging upto 11.20. Maintain a stop loss at the 10.75 and a profit target of 12.50 - 13 in a good market. Since derivatives are not available on this counter, this is a pure delivery play.

Ranbaxy - Last week, we had accurately predicted that the current rally in the pharma sector was likely to see this counter benefit significantly as this Indian MNC is likely to maintain it's market out-performer rating. Buying was recommended at 760 levels for a medium term perspective. However, the rally surpassed even our own expectations. We recommend a hold / buy on declines for a patient investor.

Your call of action - We recommend buying the scrip in the delivery segment at the 810 - 815 levels and hold with a stop-loss at the 780 levels. Keep a price target of 900 in a conducive market in the near term. Futures traders may buy with a medium term perspective as this recommendation is for a few weeks' period in tenure. The entry price should be close to the 807 mark, with a stop-loss at the 785 levels and a price target of 850 in a short time. Options traders may buy the July call options at a strike price of 840 and a premium of Rs 25.

Reliance Inds - this market leader has had many positive triggers to drive the stock price. A positive petrochem cycle, gas finds, increased market share in the telecom business and good investor / trader buying support that has seen the counter lead the markets from the front. Any close above the 339 will be a buy trigger.

Your call of action - We recommend buying the scrip for delivery players above the 339 levels on a closing basis and hold with a stop-loss at the 334 levels. Maintain a price target of 345 in the short, even higher levels are a possibility in a bullish market. Futures traders may contemplate buying the July futures above a price of 339 and hold with a stop loss at 335 and expect a target of 344 in the near term. Options traders are unlikely to gain significantly from this narrow movement recommendation.

SBI - this PSU banking major has seen a fall on Friday only due to the ex-dividend factor as the markets have adjusted the dividend from the exchange prices. We expect this counter to lead the sector as the story is more robust than the other smaller banks. Expect a small dip before a fresh rally commences.

Your call of action - We recommend buying the scrip for delivery at the 378 - 380 levels with a room for averaging upto the 372 levels, keeping a stop-loss at the 365 levels. Expect the 400 mark to be surpassed again soon. Futures players may buy the July futures at a price of 385 ( futures quote at Rs 5 premium to cash ) and maintain a stop-loss at the 380 levels and a profit target of Rs 394. Options players may buy the 390 july calls at a premium of Rs 11.

Siemens - this MNC electrical equipment manufacturer was recommended a quarter ago and had yielded superlative profits of over 10% in less than a month. The counter has been consolidating between the 340 - 390 levels since then and is poised for a breakout in a firm market. Should the 400 levels be surpassed with convincing volumes, buy for delivery.

Your call of action - We recommend buying the scrip for delivery based investors above a closing price of 400 and maintain a stop-loss of 375. We expect a price of 440 - 450 in 8 - 12 weeks time frame. Since derivatives are not available on this counter, this is a pure delivery play.

BSE Sensex - Last week we advocated that the Sensex was expected to see a resistance at the 3650 levels. That level saw some selling, as the sensex closed lower. As the oscillators remain in the overbought levels ( a normal phenomena in bull markets ), we expect further correction to come at the 3680 levels. The index is trading at the 15 month highs and is likely to see slight appreciation before a fall.

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 encounter resistance at the 1150 - 1155 levels. That judgement was proved correct as the index failed to surpass that level and closed lower. The coming week will see that level being the short term hurdle which the Nifty must surpass. Since the oscillators are appearing highly overbought, we advocate extreme caution on the upsides.

Your call of action - We advocate holding earlier long positions. Short selling is not advised at this juncture. The 1115 level is a significant support to watch, where a stop loss for Nifty longs can be maintained. Wait and watch to see if the Nifty surpasses the 1155 highs in this week. Take a fresh bullish view only above that level.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. The index has been making higher tops and bottoms and the move was supported by the oscillators. After the Federal reserve meeting, the markets are cooling off, and likely to seek levels of 8750 - 8800. Should the markets remain firm however, expect 9375 as the next inflection point, after due corrections.

Dow Jones - Daily 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 is making a saucer formation which is supported by the oscillators. Since the last fortnight, we predicted that the 1680 levels are a crucial resistance level being the previous highs. The index has indeed turned lower after touching 1684 !! Watch this resistance level closely for a breakout. Above a convincing close above 1685 for 2-3 sessions, expect the Nasdaq to see 1725 - 1730 levels. That will have a positive impact for the domestic software counters too.

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 4280 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

Till the Q1 results announcement, expect high volatility on the software counters, a main reason why no software stocks have been recommended. We would prefer to take a fresh look on the sector after the earnings guidance is issued by the frontline companies.
The index heavy-weights are now beginning to show strength and as long as Reliance, Hind Lever and ITC remain firm, expect the operators to pull the markets higher. However, it maybe noted that the 1155 levels on the Nifty must be surpassed convincingly with heavy volumes to signal a fresh buy.
Keep your traded volumes small and 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.