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.

Gujarat Ambuja Cements - We have been advocating since a fortnight that this cement major is in an uptrend and attempting a saucer formation. We have been recommending this counter on a periodic basis and the trades have been very profitable. The scrip has been bullish above the 174 levels and is consolidating currently at present levels. There is a historical resistance at the 186 above which a rally upto 192 can occur. The stock is a market out-performer and will rally more than the benchmark indices. The oscillators are pointing towards an upmove and the current optimism in the cement sector should also be a positive for the counter.

Your call of action - We recommend buying the scrip on declines of 178 - 179 levels and a stop loss be maintained at the 175 levels for delivery investors. A profit target of Rs 185 - 189 is likely in the short / medium term. Futures traders should buy the June series at a price above the 188 levels with a stop-loss at the 186 levels and a profit target of 192 in the short / medium term. Options traders should buy June call options at a strike price of Rs 195 and a premium of Rs 2. Market lot = 1100 shares.

HPCL - Last week, we had observed that this PSU refinery major was in a downward sloping channel and was attempting to break-out above it's channel top. The oscillators were also attempting an upmove and raising the probability of a further rise. The stock was recommended as a speculative buy and was to be bought in small quantities. The counter has broken out of that channel and may see a small selling pressure where it can be bought.

Your call of action - We recommend buying the scrip on declines of 300 - 304 and holding with a stop loss of 296. Expect levels of 312 - 315 in the short term. These levels are valid for both delivery and futures traders. Options traders can contemplate buying June calls of 300 strike at a premium not exceeding Rs 14 - 15. Market lot = 1300.

Infosys - this counter has been a beneficiary of the bullishness in the Nasdaq. Being the most favoured and widely owned stock by institutional players, trader focus on the counter is always high. The counter is trading above it's very short term congestion / resistance and can appreciate upto the 3070 levels where a 8 week resistance exists. This is a speculative buy.

Your call of action - We recommend buying in small quantities in the cash section above the 2990 levels with a stop loss at the 2950 levels. Expect a resistance at the 3060 levels where profits are to be booked. Futures traders are advised to buy the June series at a price above the 2982 levels with a stop - loss at the 2955 levels and profit motive of 3045 levels. Options traders may not get a significant benefit of the move as the movement is expected to be narrow. Market lot = 100 shares.

ITC Ltd - this counter was advocated a fortnight ago and it was mentioned that there was likely to be a consolidation at the 700 - 725 levels before a fresh breakout was likely. The 13 day SMA is a meaningful support at the 685 - 690 levels and traders can buy at these levels with a very short term perspective and keep trades for intraday. However, medium term / position traders may buy only above the 725 on a closing basis.

Your call of action - We recommend buying in small lots in the delivery segment at 685 - 690 levels for intraday traders with a 10 rs stop loss and equal profits. This counter will provide multiple opportunities in the coming week. However, if you have a slightly more patient view, buy only above 725 with a 704 stop loss and a price target of 744 in the immediate term and an exhaustion point at the 764 levels. Futures traders can try quick trades by buying at the 700 levels with a 10 rs top loss and Rs 15 profit motive. Above the 715 mark, expect a sharper upmove and buy with a stop loss at the 705 levels and profit motive of 728 - 729. Options traders can buy the June 720 calls at a premium of Rs 8. Market lot = 300 shares.

Jindal Steel & Power - This counter is moving on an upward sloping trendline and gets a support at the 13 day SMA. Currently, the support is at the 430 levels. Last fortnight, we recommended a buy above a close of 380, expecting the counter to to test the 400 highs. Subsequently, a buy was recommended above 407. These recommendations turned out profitable. Buying recommended on declines.

Your call of action - The counter is a pure delivery play as derivatives are not available on the counter. Buy at 430 - 435 and hold with a stop loss at 415. Expect levels of 465 in the near term.

Mastershare - Last fortnight we recommended this mutual fund unit as it was hitting a 2 year high as the UTI restructures it's equities portfolio. This investment is for the discerning investor who is conscious of returns on investment. This scrip though a slow gainer, the percentage returns are significant. The oscillators are pointing towards a continued rally and a further appreciation is likely. Buying was recommended at 10.75 - 10.80 with a downward scope for averaging. That position is in the money as the scrip has risen smartly. Those traders who have not yet squared up their trades, can continue to hold, fresh entry can also be contemplated at lower levels.

Your call of action - delivery investors are advised to buy the scrip at 10.80 - 10.90 levels, with a scope for averaging upto 10.50 levels and maintain a stop-loss at 10.30 levels. We expect a level of 12.00 - 12.15 in a few weeks. Since derivatives are not available on the counter, this is a pure delivery play.

Ranbaxy - Last week we recommended that this pharmaceutical powerhouse is in an upmove and has clearly out-performed the broader markets, it's peers ( Dr. reddy & Cipla ) which are languishing. Adequate support existed at the 640 levels and should the scrip close above the 700 mark, we expected a new trading zone with low resistance. Buying was recommended for the patient and discerning investor at the previous weeks close at 680 levels, which turned out to be highly profitable.

Your call of action - We recommend holding the previous long positions and buying the scrip on all declines upto 660 and maintain a stop-loss at the 636 for fresh purchases. Expect a sharper rally once the scrip crosses over 700 on a closing basis. Keeping downward room for averaging, buy for delivery and futures, with a 4 - 6 week outlook. Futures traders are advocated to buy the July futures. Options are not advisable on the counter as returns maybe limited. Market lot = 800 shares.

Reliance Inds - Last fortnight, we had predicted that this counter was consolidating at the 270 levels and was weak in the short term due to the dividend stripping factor only. However, lower crude prices in the international markets is likely to benefit the petrochemical sector as crude is an input cost. If the markets moved higher on the back of an old economy rally, this counter was likely to be a front runner. That prediction has been vindicated as the stock as tested the 315 figure mark !! The stock faced tremendous short term resistance at the 306 levels which was a 6 month top. Those resistances are surpassed and the stock is speculative buy at current levels.

Your call of action - Delivery buying is recommended on this counter as long at 307 - 310 levels. The first objective is the 315 levels and thereafter the 319 levels. Futures traders may buy the June futures at the 309 - 311 levels and maintain a stop loss at the 305 levels and a profit target of 316 levels the stock can see an exhaustion point of 319 levels. Options traders may buy the June calls at a strike price of 310 and a premium of Rs 8 - 9. Market lot = 600 shares.

VSNL - This stock was recommended in this newsletter in the last fortnight and has generated tremendous trading opportunities. This telecom major is likely to see some upswing after the Tata's announced that they had no intention of disinvesting their management control in the ex-psu. An aggressive VRS has been announced and MTNL & BSNL have decided to retain VSNL for their ILD ( international long distance ) calls as a preferred carrier till March 2004. This should boost the counters prospects. This counter is now also a dividend play. Currently, the 200 day SMA resistance has been cleared. We recommend a buy as a speculative call.

Your call of action - Buy June futures at the 97 - 98 levels and maintain a stop-loss at the 94 levels. We expect a profit target of 103 - 105 in the near term. Since the contract size is very small and margin outlay is very affordable, we strongly advocate buying futures rather than options. Market lot = 700 shares.

BSE Sensex - Last we advocated that the Sensex was expected to see a further rally in the offing. That has been justified as the markets have shifted in bullish hands. The next resistance should come at the 3345 levels or so. This index is rapidly moving into the overbought 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 our subscribers stay long in the Nifty. We re-affirm that view and advise holding of that long position to let traders' profits run. The Nifty was likely to encounter resistance at the 1035 levels as advocated by us. Since that level was surpassed by 10 points, expect the 1060 - 1065 levels to be the immediate speed breaker for the markets. Aggressive fresh long positions should be avoided at this time. The markets will have conclusively reversed the bearish trend only above the 1106 levels.

Your call of action - We advocate taking a fresh bullish view on the Nifty only for short term traders. Holding earlier long positions is advisable. If the longs have been squared off, do not buy Nifty in a hurry as we expect a small correction before a fresh view can be taken. Short selling is not advised at this juncture. The 1060 - 1065 resistance is likely to be a significant one to watch.

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. The 9050 mark was advocated as an important resistance level for this index where the index as closed. Should the markets remain firm, expect 9550 as the next inflection point.

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 is making a saucer formation which is supported by the oscillators. Last week, we predicted that the 1680 levels are a crucial resistance level being the previous highs. The index has indeed closed lower after touching 1684 !! Watch this resistance level closely for a breakout.

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 forecasted that the oscillators were showing signs of promise of closing above the 4080 reistance which indeed happened !!. Should the upward momentum continue, expect a further rise to the 4350 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

We expect the software sector to gain marginally on the back of a strong US market. However, the old economy stocks will still be bigger beneficiaries. Do not build very aggressive long positions on software counters at this point in time.
The coming week is likely to see a pull / push between bulls and bears, volatility will be high and a consolidation is likely before a clear trend emerges. Await a secular move before enlarging commitments.
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.
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.