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.

BPCL - This PSU refining major has been rising steadily last week on the back of a faster upmove by HPCL. 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.

Your call of action - We recommend buying the scrip for delivery at the 275 levels in small quantities and keep some room for possible downward averaging. A stop loss at the 266 levels be maintained and expect a profit motive of 288. Futures traders may buy the July futures at 264 - 266 ( the July futures are quoting at a Rs 10 discount to cash ) and keep a stop loss at the 261 levels, with a profit motive of 274 - 276 levels. Options traders may buy the July 2003 calls at a strike price of 280 and a premium of Rs 8.

Container Corporation - this counter has been making new highs every single day of the previous week and is a leading market out-performer in the recent past. The oscillators are suggestive of a continued uptrend, albeit after due corrections. Should the markets correct downwards in the coming week, the stock is a good buy on declines.

Your call of action - We recommend buying the scrip on declines of 345 with a room for averaging upto 335. A stop loss be maintained at the 326 levels and a profit target of Rs 375 be expected in a few weeks. Since derivatives are not available on this counter, this is a pure delivery recommendation.

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.

HPCL - This counter has been recommended by us in the Flavours edition on the 7 th of June. That recommendation has turned out to be highly profitable as the the counter has gained over 4 %. The stock is firming up on optimism on the disinvestment front as also overall market bullishness. A good buy on declines.

Your call of action - We recommend buying the scrip in the delivery segment at the 330 levels with a possibility of averaging upto the 320 levels and a stop loss at the 314 levels. Expect a rally upto the 345 levels in a short period in a conducive market. Futures traders may buy the July futures ( quoting at Rs 4 premium to cash ) at a price above 340 with a stop-loss at the 336 levels and a target of 348 in the short term. Options players should buy the July 2003 calls at a strike price of 350 and a premium of Rs 8 - 9.

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 was advocated as a speculative buy above the 3000 mark and was advocated as hitting a resistance at the 3060 mark. Our view was vindicated as the scrip closed at the 3058 levels !! This counter is a fresh speculative buy only if the overall market sentiment is firm and a closing above 3100 is achieved.

Your call of action - We recommend buying in small quantities in the cash section above the 3100 levels with a stop-loss at the 3050 levels. Expect a resistance at the 3160 levels where profits are to be booked. Futures traders are advised to buy the July series at a price above the 3102 levels with a stop - loss at the 3060 levels and a profit target of 3175 levels. Options traders may buy the July 3100 calls ( if the cash price crosses 3100) at a premium of Rs. 125. 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 buy recommendation above the breakout level has turned out to be highly profitable as the stock hit an intra-day high of 747 after crossing the 727 hurdle. The 13 day SMA is a meaningful support at the 715 - 720 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 maybe held with a stop-loss at the 730 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 try quick trades by buying at the 720 levels with a 10 rs stop loss and Rs 15 profit motive. Options traders can buy the July 740 calls at a premium of Rs 25. Having initiated June 2003 calls last week at a strike of 720 and a premium of Rs 8 - 9 approx, profits should be booked in that series. Market lot = 300 shares.

NIIT - this software education major is one of the weaker software counters and is likely to fall faster than the benchmark indices. The counter has attempted to cross the 200 day SMA hurdle and has retraced lower below this crucial average. Should there be a further fall, expect the short term trend to be weak.

Your call of action - We recommend short selling the scrip in the July 2003 series below a price of 134 with a stop loss at the 136 levels and a target of 130 in the near term. Options traders are unlikely to benefit significantly from this limited move.

Nalco - This is another PSU disinvestment candidate and a favoured counter after the prospects for the aluminium industry picked up. The private sector leader Hindalco has been setting a blistering pace of growth and after the success of the Maruti IPO, there likely to be a flurry of activity around Nalco. A speculative buy is recommended.

Your call of action - We recommend buying the scrip in the delivery segment above the 108 levels and maintain a stop loss at the 104 levels and a price target of 114 in a conducive market. Futures traders may buy the July futures above 109 with a stop loss at the 106 levels and a target of 114 in the near term. Options traders may buy the July 2003 calls at a strike price of 110 and a premium of Rs 5.50.

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 62 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). Markets 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 3 weeks, 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 335 figure mark !! The stock faces short term resistance at the 344 levels.

Your call of action - Delivery based investors can continue to hold long positions on this counter as long as the 320 levels hold out. The objective remains at the 340 levels. Futures traders have received multiple recommendations all of which have been profitable last week. They should continue to trade long a till 340 levels, then book profits and wait & watch.

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

Your call of action - Buy July futures at the 108 levels and maintain a stop-loss at the 105 levels. We expect a profit target of 112 - 114 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 corrective fall before the previous top of 3417 made on 10 th Jan is tested again. That fall has largely eluded the markets and therefore, the possibility of a sharper downward correction becomes higher. The oscillators are in an overbought zone and therefore signal a correction in the next 1-3 days. We expect resistance to be seen at the 3550 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 conclusively reverse the bearish trend only above the 1106 levels. Till then expect a higher volatility period in the very short term. The possibility of an upmove fair. 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, that too above a conclusive close of 1107 with high volumes and a highly positive breadth. 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 1065 level is a significant support 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. The US federal reserve meeting will be an important catalyst for this market in the coming week.

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 - 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 an upmove. Though the upmove materialised, 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.

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 US markets to be cautious till the federal reserve meeting. Do not build very aggressive long positions on software counters at this point in time.
PSU dis-investment counters, oil & gas sector stocks will be in the limelight.
This week marks the expiry of the June derivatives series and therefore the volatility associated with switching of positions / squaring up of trades.
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.