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.

Balaji Telefilms - This television software major and a leading media content company is making higher tops and bottoms, that too with with rising volumes. The counter is attempting to breakout from the resistance provided by the 200 day SMA ( a major resistance as per technical parameters ). The oscillators are pointing towards a revival in the short term and we therefore recommend a speculative buy on the counter.

Your call of action - We recommend buying the scrip for delivery based investors ( derivatives are not available on the counter ) above the 74.50 levels on a closing basis in a firm market. Keep a stop-loss at the 71 levels and a profit target of 79 - 80 in the near term. Trade on thin volumes only. This is a speculative recommendation.

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 which have been highly profitable. Last fortnight, we had recommended this counter at the 355 - 360 levels which has been triggered on the 17 th of july 2003 !! Results declared were upbeat and the buying momentum is likely to continue. We feel this counter is for all long term delivery portfolios.

Your call of action - We recommend buying the scrip for delivery based investors ( derivatives are not available on the counter ) at the 385 - 390 levels with a room for downward averaging upto 375 levels, in case the volatility takes the counter down. Previous weeks buyers may hold their long positions which are deeply in the money and near the profit target levels. Maintain a stop-loss at the 360 levels and a profit target of 440 - 445 in a short time.

Century Textiles - this old economy stalwart has been forgotten by the markets for an extended period, and is now staging a comeback. The chart pattern shows a rough and ready support at the 30 day SMA which is currently poised at the 77 levels. Once the previous top of 87 is cleared, we expect the counter to rally further. This is a speculative grade trade, so volumes must be curtailed.

Your call of action - We recommend buying the scrip for delivery based investors ( derivatives are not available on the counter ) at the 80 levels, with a stop loss at the 76 levels. Expect minor resistance at the 86 levels where partial profits maybe booked. Once the scrip crosses 87, await 92 levels.

Federal Bank - this banking stock has seen consolidation after a spectacular run upwards. The 30 day SMA is a historical support which has been holding validity since April this year. The counter faces resistance / congestion at the 166 levels, any close above this level with heavy volumes for 1-2 sessions will see a sharper gain in the next leg of the rally. A buy for delivery based investors / traders.

Your call of action - We recommend buying the scrip for delivery based investors ( derivatives are not available on the counter ) above the 166 levels, hold with a stop loss at the 158 levels and keep raising the stop loss every rupee for every rupee's appreciation in the price. We expect a price target of 180 levels in a conducive market.

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 197 levels. The counter was recommended on 11/7/03 and 18/7/03 as a buy on declines. The counter is poised to go into a new trading zone above the 216 - 217 levels and is likely to continue out-performing markets on the whole. We re-affirm a buy on the counter.

Your call of action - We recommend buying the scrip for delivery based buyers above the 217 levels with a tight stop loss at the 212 levels. Your profit target is the 224 level in a conducive market. Futures traders may buy the Aug futures ( trading at Rs 1.5 premium to cash ) above a price of 218 with a 5 Rs stop loss and a price target of Rs 227. Options traders may contemplate buying the Aug 215 calls at a premium of Rs 7. Alternately sell the Aug 190 puts at a premium of Rs 6 - 7. Market lot = 1100

I-Flex - this counter is a fast upcoming software player and it's potential is being recognised by retail and institutional players alike. The counter has had a good run upwards in the last 7 weeks due to the announcement of a bonus issue which will impart liquidity to the markets. The counter is a strong market out-performer and is a good buy for investors and traders alike.

Your call of action - We recommend buying the scrip for delivery based investors at the 1250 levels, keep a room for averaging upto the 1220 levels. Maintain a stop loss at the 1180 levels and a price target of 1330 in the near term. Once the 1360 mark is crossed on a closing basis, expect a higher level of 1400. Futures traders may find the volatility difficult to handle and therefore we suggest options in the derivatives segment instead. Buy the Aug 1200 calls at a premium of Rs 140 maximum. Market lot = 300 shares.

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. On the upsides, expect the 200 day SMA at the 3800 levels to be a strong resistance in the absolute short term. The oscillators are pointing towards an upmove.

Your call of action - We recommend buying the scrip for delivery based investors at the 3450 - 3480 levels and maintain a stop loss at the 3340 levels. expect a price of 3650 once the 3545 levels are crossed upwards. Futures players may buy the August futures at a price of 3500 - 3520 and maintain a tight stop loss at the 3440 levels. Expect a price of 3575 in the short term and 3630 in a few sessions - should the markets remain firm. Options players may buy the Aug 3500 calls at a premium of Rs 165 - 175. Market lot = 100 shares. Fixed returns investors may sell the July 3100 put options at a premium of Rs 6 - 8.

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 30 day SMA and should present traders opportunities for buying at those levels and exiting in the short term at a good profit. This time around, expect the price to break below the 30 day SMA in some profit taking. Should the scrip take support below, expect the 465 levels to be the next buying point.

Your call of action - We recommend buying the scrip for delivery based short term traders at the 470 levels and a stop loss at the 458 levels. Expect a price of 495 - 500 in a firm market. Since derivatives are not available on this counter, this is a pure delivery play.

Kirloskar Ferrous - this counter is a beneficiary of the ferrous metals industry seeing improved prospects and is also witnessing an improvement in it's fundamental performance. The company intends to raise it's borrowing limits by Rs 100 crs and use it to augment working capital requirements as well as pre-pay expensive debts. This dual pronged strategy is likely to show in the balance sheet after atleast 2 quarters - that makes this investment a medium term play.

Your call of action - We recommend buying the scrip for delivery based investors ( derivatives are not available on the counter ) at the 13 - 14 levels, with a room for averaging upto the 9 levels. Keep a stop loss at the 8 levels and expect a price of 22 - 25 in six months time.

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 fortnight, 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. Any investor looking for percentage returns on capital invested should not miss this counter.

Your call of action - We recommend buying the scrip for delivery based investors at lower levels of 12.25 and keep room for averaging upto 12.10. Maintain a stop loss at the 11.85 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 occurred.

Reliance Industries - This old economy leader is witnessing an upsurge before it's quarterly results and has also surpassed the 348 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 pre-result sessions is fair to high. Speculative / trading buy recommended.

Your call of action - We recommend buying the scrip for delivery based investors at the 347 - 349 levels with a stop loss at the 343 and a target of Rs 355 in the near term. A price level of 360 is also possible in a conducive market. Futures traders may buy the July futures at Rs 350 - 352 ( July series quotes at a Rs 1.50 premium to cash ) and maintain a stop loss at the 346 levels, with a price target of Rs 358 in the near term. Options traders may sell the July calls at a strike of Rs 330 and a premium of Rs 0.85 - this would be ideal for investors looking for fixed & high returns on investments. Market lot = 600 shares.

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 week at Rs 400 with a stop-loss at the 380 levels and a target of 424. 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.

Your call of action - We recommend buying the scrip for delivery based investors at the 410 - 415 levels with a stop loss at the 398 levels and a profit target of 450 in a few weeks time. Futures traders are advised to buy the Aug futures at Rs 423 - 426 ( Aug futures trade at Rs 4 premium to cash ) with a stop loss at Rs 415 and a target of 444 in a conducive market. A safer approach would be to sell the July puts at a strike of 400 and avail a premium of Rs 2. Market lot = 1000 shares. This options strategy will yield a low risk premium inflow of Rs 2000 in 4 days.

BSE Sensex - Last week 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. The correction seems to have run out as the sharp fall saw a support at the 30 day SMA. Should the 3750 levels be surpassed on a continous closing basis, the next leg of the upmove will commence. In the absolute short term, expect trading support at the 3650 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 encounter resistance at the 1165 - 1170 levels. Selective shorts were advocated via the options route at those levels. The oscillators are pointing towards a completion of the downward correction in the short term outlook. Expect a fresh upmove once the previous top of 1176 is surpassed on a closing basis. Till then adopt a wait and watch approach.

Your call of action - Await a crossover of the 1180 levels before taking a fresh view on the counter.

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 will be confirmed only upon the breakout form 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 8875 levels.

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. The 30 day SMA is a good historical support and has again provided critical to the index. Expect the Nasdaq to see buying at these 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 a resistance 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 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 - Daily 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 have restricted the number of stocks recommended for trading.
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 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.
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.