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. Last week, we had recommended this counter at the 350 levels which has seen a 10 % return in a week !! Results are likely to be declared on the 15 th of July and therefore the volatility will aid traders.

Your call of action - We recommend buying the scrip for delivery based investors ( derivatives are not available on the counter ) at the 355 - 360 levels with a room for downward averaging upto 345 levels, in case the post result volatility takes the counter down. Maintain a stop-loss at the 325 levels and a profit target of 390 - 395 in a short time.

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 13 day SMA is a historical support and is currently poised at the 290 levels. This level should be good entry point for traders. 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 285 - 290 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 278 ( the July futures are quoting at a Rs 9 discount to cash ) and keep a stop loss at the 273 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 6. The traded quantities must be restricted to small lots only Market lot = 1100 shares

Cipla - this domestic pharma major was recommended last week and was advocated as being in a minor uptrend after a steep and sustained fall since Jan 03. A buy was recommended at the 815 levels which is in profits. There is bouyancy in the pharma sector stocks and that is percolating down to this counter too as the price graph is trying to stay above 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 holding the previous weeks long positions and buying the scrip for delivery based buyers at the 805 - 810 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 33. Market lot = 200 shares

Century Textiles - this diversified major is riding the wave of positive sentiments in the textile and cement sectors and is showing signs of strength on short term charts. Historically, the support has been at the 30 day SMA and that is poised at the 72 levels, where a buy should be initiated.

Your call of action - We recommend buying the scrip for delivery based buyers at the 72 - 73 levels with a stop loss at the 69 levels. Expect a profit target of 84 in the near term. Since derivatives are not available on this counter, this is a pure delivery play.

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 appearing to cool off. Historically, the scrip gets support at the 30 day SMA which is currently poised at the 192 levels. It maybe noted that buying is being recommended on the basis of an assumption that the scrip will see a minor bounceback from this support and therefore this is a speculative decision. The short term momentum oscillators are pointing towards a near oversold level, which lends support to a bounceback theory.

Your call of action - We recommend buying the scrip for delivery based buyers at the 192 - 193 levels with a tight stop loss at the 188 levels. Your profit target is the 200 level in a conducive market. Futures traders may buy the July futures at a price of 195 ( July futures quote at rs 2.50 premium to cash ) with a 3 rs stop loss and a price target of rs 202. Options traders may contemplate buying the July 200 calls at a premium of Rs 4.50 - 5. Market lot = 1100

Hind Motors - this low priced automobile stock from the Birla stable is for delivery based buyers with patience. Since the downsides are limited and the investment is low, once can buy small lots for delivery with a 6 month outlook for decent appreciation. However, the current down phase is likely to see lower levels of possibly 12 - 13 where it is a good buy. The biggest trigger for the counter will be the boom in the auto sector.

Your call of action - We recommend buying the scrip for delivery based buyers at the 12 - 13 levels. mainatin a stop loss at the 9.50 - 10 levels and expect 20 - 22 in a conducive market in the medium term.

ITC Ltd - this counter was advocated since the last 6 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 784 after crossing the 727 hurdle. The 30 day SMA is a meaningful support at the 740 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. It maybe noted that this weeks buy recommendation on ITC is being made with a similar assumption of Gujarat Ambuja Cements. Since a quick bounce-back is anticipated, this is a speculative grade recommendation.

Your call of action - We recommend buying in the cash segment at the 740 - 742 levels with a stop loss at the 738 levels. Expect a price of 750 - 752 in the near term. Futures traders can buy long at the 738 levels ( July futures trade at a 8 Rs discount to cash ), maintain a stop loss at the 733 levels and a profit target of Rs 745. Options traders can buy the July 740 calls at a premium of Rs 18.

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 13 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 upto 485.

Your call of action - We recommend buying the scrip for delivery based short term traders at the 485 levels and a stop loss at the 475 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.

Larsen & Toubro - this counter has been making new recent highs in the last 2 months after the Grasim takeover imbroglio started. After hitting a high of 28, the counter has fallen almost 10 % in 2 trading sessions. The historical support comes at the 13 day SMA which is currently at the 253 levels. Should the counter hit these levels in a falling market, one can attempt an intraday / short term trade purely from a speculative point of view. It should be noted that speculative trades must be entered into with lower volumes.

Your call of action - We recommend buying the scrip for delivery based buyers at the 253 - 254 levels with a short term perspective. Maintain a stop loss at the 248 levels and a profit target of 264 in the near term. Futures traders may buy the June futures at the 258 levels with a stop loss at the 252 levels and a profit target of 264 levels. Options traders may buy the 260 July calls at Rs 8 premium. Market lot = 1000 shares

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 160 - 165 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 fortnight of a buy above the 145 levels has been highly profitable. We recommend an investment / trading buy on declines.

Your call of action - We recommend buying the scrip in the cash segment at the 160 levels and hold with a stop loss at the 155 levels. Expect a price target of Rs 172 in a conducive market in the near term. Futures traders may buy the July futures at 162 - 163 levels, with a stop loss at the 158 levels. Expect a price target of Rs 170 levels. Options traders may contemplate buying the July calls at a strike price of Rs 165 and a premium of Rs 6. Market lot = 2500

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. Last week, this counter was recommended again and has seen superlative appreciation. 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 11.85 and keep room for averaging upto 11.20. Maintain a stop loss at the 10.85 and a profit target of 13.50 - 14 in a good market. Since derivatives are not available on this counter, this is a pure delivery play. Now fresh investments will be for patient investors as a significant upmove has already occured.

Nalco - This is another PSU disinvestment story and one of our more repeated recommendations in the daily and weekly editions. The counter has rewarded traders after it broke out above the 104 mark. The 13 day SMA is a historical support and the firm aluminium prices in the London metals exchange is another positive factor for the counter. A buy on declines.

Your call of action - We recommend buying the scrip for delivery based buyers at the 112 - 113 levels with a stop loss at the 108 levels. Expect a profit target of 122 - 124 in a conducive market. Futures traders are advised to buy the July futures at a price level of 113 - 114 and maintain a stop loss at the 109 levels. Expect a price target of 120 - 121. Options traders can buy the July calls at a strike price of 115 and a premium of Rs 4.50. Market lot = 2300 shares.

Ranbaxy - Last month, 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. The current sideways movement is a consolidatory phase and is showing signs of gradual accumulation at lower levels. We recommend a hold / buy on declines for a patient investor. The 4 figure mark is quite likely by the year end in a conducive market.

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 Aug call options at a strike price of 840 and a premium of Rs 35. It maybe noted that delivery investors will benefit this counter the most. Market lot = 800 shares.

RPG Cables - this low priced cable manufacturer should see better times ahead, riding on the boom in the telecom / electrical industries. Being a Rama Pratap Goenka group company, the promoters are strong and this is a turnaround case in the making. The downsides are limited as the counter is a low priced stock. Buy on declines.

Your call of action - We recommend buying the scrip for delivery based buyers at the 11 levels with a room for averaging upto the 10 mark. keep a stop loss at the rs 8 levels and expect a price level of 15 - 16 in the medium term. We expect higher levels over a 6 month period.

VSNL - this is another counter which we have been repeatedly recommending over the last 3 months. The counter has flared up consistently ever since it crossed the 77 mark. The turnaround in the telecom space is also adding to the bullishness. The govt's decision to disinvest the residual stake will boost sentiments further. A good buy on declines.

Your call of action - We recommend buying the scrip for delivery based buyers at the 130 mark with a stop loss at the 126 mark. Expect a price target of 150 in the near term.

BSE Sensex - Last week we advocated that the Sensex was expected to see a slight appreciation before a fall. Once the 3650 levels have been surpassed, the 3760 levels are a possibility from where a small retracement can be seen. There is negative divergence on the oscillators which shows the possibility of a fall before the markets take the next upward leg.

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 level was overcome as the Nifty closed beyond that inflection point. Since the oscillators are showing congestion, one can expect corrections at the 1187 - 1190 levels. On the lower side, expect support to come at the 1130 levels. In the coming week, the Nifty should not close below the 1115 levels.

Your call of action - We advocate holding earlier long positions. Short selling is not advised at this juncture. The 1140 level is a significant support to watch, where a stop loss for Nifty longs can be maintained. Build long positions in very small lot only, that too on declines. Take a fresh bullish view only above the 1200 level.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. The index had 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 8800. Should the markets remain firm however, expect 9261 & 9352 as the next inflection points, after due corrections.

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. The index is making a saucer formation which is supported by the oscillators. Since the last fortnight, we predicted that the 1680 levels were a crucial resistance level being the previous highs. The index has indeed flared higher above this resistance !! Watch this resistance level closely as the violated resistance is now a support on the downside. As was accurately predicted by us last week, above a convincing close of 1685 for 2-3 sessions, expect the Nasdaq to see 1725 - 1730 levels by the weekend. The Nasdaq has indeed closed at the 1734 levels !! We also said that it will have a positive impact for the domestic software counters too, as was seen in the last weeks trades. Watch the 1785 levels on the Nasdaq for fresh selling points. The Nasdaq is likely to out-perform the Dow Jones Industrial average.

Nasdaq - Weekly 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 ALL the frontline companies.
The index heavy-weights are now beginning to show fatigue and as long as Reliance, Hind Lever and ITC remain suppressed, expect the broader indices to be range-bound.
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.
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.