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.

ACC - this counter is likely to see weakness if the overall market sentiments turn weak - a possibility in the coming week. For short term / intraday traders, the trigger will be the 144.50 levels, below which, the stock can slide faster in a weak market. The oscillators are pointing towards a fall as the short term momentum oscillators are turning downwards from an over bought level.

Your call of action - We recommend shorting the scrip in the June futures series below a trigger price of 145 with a stop loss at 147.60 and a price target of 141. Options traders may not be able to benefit much from this counter and should stay away. Market lot = 1500 shares.

Digital Globalsoft - This counter has been hammered significantly after the HP merger announcement and has opened with a downward gap which needs to be filled on the daily charts. Being a very high beta (volatility) counter, this stock is capable of large swings. This makes it a high risk / high return traders delight. Should the entire sector start looking bullish in the coming week, and the counter surpass the last weeks high of 401 on a closing basis, expect a bigger upmove. This counter is a speculative buy.

Your call of action - We recommend buying the scrip in the delivery segment only if it closes above the 401 levels. Keep a stop-loss of 380 and a profit target of 440. Futures traders can contemplate buying the June futures above a closing price of 404 and maintain a stop loss at the 384, and a profit target of 434 in the short term. Options traders can buy the June 2003 calls at a strike price of 420 and a premium of Rs 6.

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 188 above which a rally upto 195 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 179 - 181 levels and a stop loss be maintained at the 175 levels for delivery investors. A profit target of Rs. 186 - 189 is likely in the short / medium term. Futures traders should buy the June series at a price above the 189 - 190 levels with a stop-loss at the 186 levels and a profit target of 195 in the short / medium term. Options traders should buy June call options at a strike price of Rs 190 and a premium of Rs 2. Market lot = 1100 shares.

Glaxo - this stock has been recommended on a few occasions in this newsletter as well as the daily edition. The recommendations have been very profitable for traders & investors alike. The counter is undergoing a corrective fall and is likely to seek slightly lower levels. The price retracement calculus shows a retracement to the 342 levels and a very strong support at the 331 levels. Buying is recommended at these two supports. We expect a 7 - 10 % appreciation in a conducive market. Buying is recommended at lower levels for the discerning investor.

Your call of action - We recommend buying the scrip in small lots at the 345 levels with a room for downward averaging upto the 330 mark. Keep a stop loss at the 325 levels and an upward target of 365 in the short term and 374 in a firmer market. Since derivatives are not available on the counter, this is a pure delivery recommendation.

HCL Tech - this software heavy-weight has appreciated rather rapidly and is appearing over-bought. Should the markets see profit taking on the upsides, this counter is likely to be hit first. The 142 levels are a good support in the immediate week and the 155 - 156 levels will be a short term resistance. Traders can exploit opportunities on the counter in the coming week.

Your call of action - We recommend shorting the scrip in the futures segment in the June series at the 154 levels and maintain a stop-loss at the 158 levels. Expect a target of 147 - 148 levels in the near future. Options traders are unlikely to benefit significantly due to the limited time to exposure and narrow price fluctuation. Market lot = 1300 shares.

Hero Honda - This counter has been a beneficiary of the improvement in the sentiments due to timely arrival of monsoons. It is widely perceived that a good monsoon will benefit this company even as the launch of the higher ended motorcycle expands it's portfolio. The short term oscillators are pointing towards an overbought position as the counter has made rapid and consistent gains over the last 6 weeks. This counter is a hold for those investors / traders holding long positions.

Your call of action - We recommend buying the scrip on major declines of 230 - 235 levels with a stop loss at the 225 levels. existing long positions maybe maintained with a stop-loss at the 240 levels. On the upsides, we expect a price appreciation upto 265 levels in the coming week.

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 at it's very short term congestion / resistance level of 3000 and can appreciate if that level is surpassed. This is a speculative buy.

Your call of action - We recommend buying in small quantities in the cash section above the 3000 levels with a stop loss at the 2950 levels. Expect a resistance at the 3060 levels where profits are to be booked. Should the scrip move above the 3075, and the markets be bullish for the IT sector, expect 3170 levels also. Futures traders are advised to buy the June series at a price above the 3002 levels with a stop - loss at the 2965 levels and profit motive of 3065 levels. Above the 3076 levels expect a fresh upmove of Rs 100. Options traders may buy the June 3000 calls ( if the cash price crosses 3000) at a premium of Rs. 85. Market lot = 100 shares.

ITC Ltd - this counter was advocated since the last 3 weeks 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. Futures traders have had multiple profitable opportunities trading the near month futures on the long side at 700 levels and exiting with 1.5 - 2 % profits on an intraday 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 445 levels. That support has been violated and the counter is likely to retrace closer to the trendline at the 400 - 410 levels, where a fresh buy can be initiated.

Your call of action - The counter is a pure delivery play as derivatives are not available on the counter. Buy at 400 - 405 and hold with a stop loss at 385. Expect levels of 425 in the near term.

Mc Dowells - this liqour major has been on an ascent since the last 7 weeks and is likely to make higher tops as the chart formation shows a bullish pattern unfolding. The oscillators are supporting the rally and a close above the 52 levels should see an accelerated rally. Buying is recommended above that resistance level.

Your call of action - We recommend buying the scrip above the 52 mark for delivery with a stop loss at the 45 mark. Keep a profit target of 60 in the short / medium term. Since derivatives are not available on this counter, this is a pure delivery play.

Mahindra & Mahindra - this passenger utility and tractor major is in an uptrend as the prospects of the company have improved substantially. The monsoons are likely to benefit the company as tractor / jeep sales are likely to benefit. Besides, the scorpio is adding more market share in it's segment. Chartically, the stock is entering a new 3 year high above the 146 mark and is likely to see a price rise upto the 160 levels in the near term. Buying is recommended on the counter.

Your call of action - We recommend buying the scrip above the 146 mark for delivery and futures traders with a stop-loss at the 136 mark. Expect a price of 154 in the short term, however, the actual target would be 160 in a few weeks time. Options traders may contemplate buying the July call options at a strike of 145 and a premium of Rs 2.50 - 3. Market lot = 2500 shares.

Ranbaxy - For the last 3 weeks, we have been recommending 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 above a close of 700 levels, which turned out to be highly profitable. We expect a continued upmove on this counter.

Your call of action - We recommend holding the previous long positions and buying the scrip on all declines upto 680 and maintain a stop-loss at the 666 for fresh purchases. Expect a sharper rally once the scrip crosses over 735 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. Market lot = 800 shares.

Reliance Capital - this scrip is trading in a channel as can be seen from this weekly bar chart. The oscillators are pointing towards a possible bullishness as the company operates as an NBFC. As the market value of it's stocks portfolio appreciates, there is a concentrated buying momentum on this counter. Expect a faster upmove above the channel top of 68 levels on a closing basis. Traded volumes are on the way up and that shows a broader based buying interest on the counter. The 55 levels would be a good support for the counter.

Your call of action - We recommend buying the scrip above the 68 levels ( in a bullish market). Traded volumes should be higher as that would a major trigger. Keep a stop loss of 63 levels and a profit target of 74 in the immediate future. In a conducive market, even higher levels are possible. Since this counter does not offer derivatives, this is a pure delivery recommendation.

Reliance Inds - Last week, we had predicted that this counter was consolidating at the 305 levels and was likely to move up if these levels were not violated on the downside. Our subscribers have been trading this counter profitably ever since it surpassed the 270 resistance on the upside. We re-affirm our theory that 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 has tested the 315 figure mark !! The stock faces short term resistance at the 318 levels. Once this resistance is surpassed, the stock is a speculative buy.

Your call of action - Delivery based investors can continue to hold long positions on this counter as long as the 308 - 310 levels hold out. The objective remains at the 319 levels as advocated last week. Futures traders have received multiple recommendations all of which have been profitable last week. They should continue to trade long a till 319 levels. Options traders may continue to hold the June 310 calls. Market lot = 600 shares.

Satyam Computers - this counter has been creeping higher as the other index heavy weights have been making rapid advances. Having under-performed the markets, this counter is likely to see enhanced speculator / investment based buying above the short term trigger of 190. However, for that to happen, it is necessary that the entire software sector be bullish and the stock advance with very heavy volumes.

Your call of action - We recommend buying the scrip above the 190 mark and maintaining a stop loss at the 187 mark. A profit target of 194 - 195 should be maintained. These levels are valid for both delivery and futures traders. Options players are unlikely to benefit significantly due to the narrow movement targeted for the week. Market lot = 1200 shares.

Siemens - this MNC electrical major is in a major uptrend. This counter was first recommended by us at the 334 levels and profits were booked at the 374 levels. A correction has taken place since then and we expect the upmove to continue, especially if the high beta (volatility) counters weaken. That will help defensive counters like Siemens. A buy is recommended on all declines in the short term.

Your call of action - We recommend buying the scrip on all declines upto 360 and maintain a stop-loss at the 350 levels. Expect a price target of 390 - 394 in the short term. In a conducive market, expect significantly higher levels. Since derivatives are not available o this counter, this is a pure delivery recommendation.

Tisco - this counter has turned weak on two counts - the international steel prices are reported topping out and are expected to be flat or correct lower. The second reason being that the scrip has gone ex-dividend. In case the counter turns lower, there is a chance of an accelerated fall. The oscillators are supportive of a fall in the near term.

Your call of action - We recommend shorting the scrip below the 149.50 levels in the June futures series. Keep a stop-loss of 151.50 and profit target of 147 on an intraday / short term basis. In a weak market, we expect the price to sink to 144 levels also. Market lot = 1800 shares.

VSNL - This stock has been recommended repeatedly in this newsletter in the last month and has generated tremendous trading opportunities. Currently, the 200 day SMA resistance has been cleared. We recommend a buy on declines as a low risk speculative call.

Your call of action - Buy June futures at the 98 - 99 levels and maintain a stop-loss at the 94 levels. We expect a profit target of 102 - 104 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. Keep the traded volumes on the lower side though. Market lot = 700 shares.

BSE Sensex - Last week we advocated that the Sensex was expected to see a resistance at the 3345 levels or so. The Sensex has closed at the 3354 levels and is facing resistance by way of heavy profit taking at higher levels. This index is rapidly moving into the overbought levels on the short term momentum oscillators. There is a likelihood of a corrective fall before the previous top of 3417 made on 10 th Jan is tested again.

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 1060 - 1065 as the immediate speed breaker. Aggressive fresh long positions should be avoided at this time. The markets will have conclusively reversed the bearish trend only above the 1106 levels. Till then expect a range-bound trade between the 1025 - 1065 levels. Await a breakout in either direction before taking a view on the markets.

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. Should the markets remain firm, expect 9550 as the next inflection point, 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. 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 - 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 forecasted that the oscillators were showing signs of promise of closing above the 4080 resistance 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 assurances of continued orders from US clients. 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 possibility of announcement of the next elections will also lend short term volatility in the markets.
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.