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 was recommended last week 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 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 275 levels in small quantities and keep some room for possible downward averaging. A stop loss at the 269 levels be maintained and expect a profit motive of 298. 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 276 - 278 levels. Options traders may buy the July 2003 calls at a strike price of 300 and a premium of Rs 5.

Balaji Telefilms - this tele-serial leader and media software company has been seeing action with very large volumes as bulk deals have been reported on the counter. The company is in a strong position where market share is concerned and should see bigger upmoves once immediate hurdles are surpassed on the short term charts. A short term buy on advances.

Your call of action - We recommend buying the scrip above the 71 - 72 levels on a closing basis and maintain a stop loss at 68 levels. expect a rally upto 75 in the immediate term. In a firm market, expect levels of 78. Buy in small lots. Since derivatives are not available on the counter, this is a pure delivery play.

Chambal Fertilisers - the current upmove in monsoon related stocks like fertilisers, consumer goods and agri chemicals has seen this fertiliser major rising steadily. Being a low priced stock has been a positive trigger for high volume based buying. The short term oscillators support the rally as volumes are rising. We recommend a buy on declines.

Your call of action - We recommend buying the scrip at 16 levels and maintaining a stop-loss at the 15 levels. Expect levels of Rs 18 in a firm market. Since derivatives are not available on this counter, this is a pure delivery recommendation.

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.

Engineers India Ltd - This PSU major is another reported disinvestment candidate. The interest evinced by L&T has been a positive trigger for the stock, which has started trading above the 300 mark consistently. Being a market out-performer in the short term, expect a fresh round of buying in a bullish market.

Your call of action - We recommend buying the scrip on declines of 305 - 310 and holding with a stop-loss at the 290 levels. A profit target of 340 should be expected in the near term. Since derivatives are not available on the counter, this is a pure delivery play.

HPCL - This counter has been recommended by us in the Flavours edition since the 7 th of June. That recommendation has turned out to be highly profitable as the the counter has gained over 9 %. The stock is firming up on optimism on the disinvestment front as also overall market bullishness. A good buy on declines. The 355 levels will be a short term resistance on the upsides.

Your call of action - We recommend buying the scrip in the delivery segment at the 340 levels with a possibility of averaging upto the 330 levels and a stop loss at the 322 levels. Expect a rally upto the 355 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 360 with a stop-loss at the 346 levels and a target of 378 in the short term. Options players should buy the July 2003 calls at a strike price of 350 and a premium of Rs 16 -18.

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 775 after crossing the 727 hurdle. The 13 day SMA is a meaningful support at the 730 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 entered at 725 levels maybe held with a stop-loss at the 743 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 buy long at the 745 levels ( futures trade at a 8 Rs discount to cash ), maintain a stop loss at the 733 levels and a profit target of Rs 760. Options traders can buy the July 740 calls at a premium of Rs 25.

LIC Housing - this housing finance challenger to HDFC is in a strong bull grip as the daily price graph shows below. The stock is a strong market out-performer and should be bought on declines. The company is rapidly capturing market share and is likely to show that aspect in the coming quarterly numbers.

Your call of action - We recommend buying the scrip on sharp declines of 115 - 118 levels. Hold with a stop loss of 112 and expect a profit target of 128 in the near term, in a conducive market. Since derivatives are not available on this counter, this is a pure delivery recommendation.

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 above the 145 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.

Your call of action - We recommend buying the scrip in the cash segment above the 145 levels and hold with a stop loss at the 137 levels. expect a price target of Rs 155 in a conducive market in the near term. Futures traders may buy the July futures above 142 levels, with a stop loss at the 136 levels. Expect a price target of Rs 150 - 152 levels. Options traders may contemplate buying the July calls at a strike price of Rs 145 and a premium of Rs 4.50

Ranbaxy - the current rally in the pharma sector is likely to see this counter benefit significantly as this Indian MNC is likely to maintain it's market out-performer rating. Buy at present levels for a medium term perspective.

Your call of action - We recommend buying the scrip in the delivery segment at the present levels and hold with a stop-loss at the 720 levels. Keep a price target of 800 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 750 mark, with a stop-loss at the 735 levels and a price target of 780 - 785 in a short time. Options traders may buy the July call options at a strike price of 780 and a premium of Rs 15 - 17.

Shipping Corporation - another PSU disinvestment story and with large retail / speculator interest. Above a 75 - 76 congestion levels, expect the counter to rally strongly. We recommend a trading / speculative grade buy.

Your call of action - We recommend buying the scrip in the delivery segment above a price of 76 with a stop loss at 73 and a target price of 80 - 81 in the near term. Futures traders may buy the July futures above the 77 levels ( futures are at Rs 1 premium to cash ) and a stop loss at the 75, and a target price of Rs 80 - 82 in a conducive market. Options traders are advocated to buy the 80 strike july calls at a premium of Rs 2.50

Tisco - This steel major is in a major bull trend and is rising on grounds of various price hikes effected by the company in the recent past. The counter is trading near its March 2001 high of 169, above which, expect a bigger rise. The oscillators are indicative of a rally and the probabilities are tilted in favour of the bulls. We recommend a buy.

Your call of action - We recommend buying the scrip in the delivery segment at a price of 162 - 165 and holding with a stop-loss at the 155 levels. The target objective is Rs 174 in the near term. Futures traders may buy the July futures at a price of 168 ( futures are at Rs 2.50 premium to cash ) and hold with a stop loss of 164 and a price target of 174 - 175. Options traders may buy the July calls at a strike price of Rs 170 and a premium of Rs 6.

BSE Sensex - Last week we advocated that the Sensex was expected to see a resistance at the 3550 levels. That level saw some selling, but was surpassed. As the oscillators remain in the overbought levels ( a normal phenomena in bull markets ), we expect further correction to come at the 3630 - 3650 levels. The index is trading at the 15 month highs and is likely to see slight appreciation before a fall.

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 was rated as fair. That hypothesis was vindicated as the Nifty closed at 1126 levels after hitting 1127. Expect fresh resistance at the 1150 - 1155 levels.

Your call of action - We advocate holding earlier long positions. Short selling is not advised at this juncture. The 1085 level is a significant support to watch, where a stop loss for Nifty longs can be maintained. Wait and watch to see if the Nifty surpasses the 1155 highs in this week. Take a fresh bullish view above that level.

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. After the Federal reserve meeting, the markets are cooling off, and likely to seek levels of 8750 - 8800. Should the markets remain firm however, expect 9550 as the next inflection point, after due corrections.

Dow Jones Industrial Average - 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. Last fortnight, we predicted that the 1680 levels are a crucial resistance level being the previous highs. The index has indeed turned 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. On the downside, the support to watch would be 3990 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

The markets are likely to attempt higher tops in the coming week, inspite of nervous US markets. This indicates a chance of a steeper fall when a bigger correction sets in. This remains our prime concern and therefore we advocate trading on thinner volumes.
Till the Q1 results announcement, expect high volatility with an upward bias on the software counters.
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.