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 cement major was recommended last week based on a variety of considerations. The main reasons were cement price hike, above expectation numbers were likely to be announced by the management in the forthcoming board meet and the re-rating of the cement sector. The chart pattern is bullish and the trades initiated last week were profitable. The stock is at a crucial juncture as the weekly chart below indicates. Please note that the 283 levels are a 5 month high, and need to be surpassed with strong volumes. The oscillators are indicating strength and will be an additional positive. We recommend a buy.

Glaxo - This counter has been a prolific feature in our newsletter and has also lived up to it's expectations. The MNC pharmaceutical sector has been in the investor focus and the approaching 2005 deadline for the EMR ( exclusive marketing regime under the new patenting guide lines ) will result in higher market share / profits for the segment. We recommend a buy for the delivery based investors at the current levels with a 3 - 6 month perspective.

SBI - This PSU banking major was also recommended previously and has fared well. The next trigger for the counter is the upcoming results. The stock has made an interesting chart pattern. The triangle made by the scrip from Jan 04 - Mar 04 has been violated downwards, and the extension of that triangle has now become the benchmark for the trend determination for the counter. As c\long as the scrip remains above the 628 mark, the bullishness is likely to continue on this scrip. We recommend a buy.

Tata Power - This counter has broken out of the congestion levels of the 411 short term resistance zone and closed above that level. Our investors will recollect that we had forecast a price target of 450 over the medium term as the counter has generated a buy signal above the 400 mark. That recommendation has been highly accurate so far. We advocate a hold / buy on the stock.

Tata Teleservices - This counter was recommended by us in the past and has seen a 80 % appreciation in 3 quarters. The stock is undergoing a consolidation phase as the profit taking is being absorbed. The telecom sector is now being re-rated upwards and the sentiments are now more optimistic for the sector as compared to the last 6 months. We feel a discerning delivery based investor should add this counter in his portfolio with a 6 month time frame.

Tisco - This scrip is in a downward sloping channel and the oscillators are pointing towards an underlying weakness in the counter. Should the price line violate the 389 mark, we feel the scrip can fall rapidly. This counter is recommended as a short sale for savvy traders in a weakening market.

BSE Sensex - the Sensex is likely to consolidate at the current levels and will encounter support at the 5790 levels. The resistance on the upsides will be seen at the 5940 then at the 6000 levels. The oscillators are showing a sluggish movement and a confirmatory rally is needed on the Sensex to signal a conclusive upmove.

Your call of action - Since the Sensex futures are not very liquid, we suggest trading the Nifty 50 instead.

Nifty 50 - The Nifty shows an interesting chart pattern. The index has been making lower bottoms and tops since the peak of 2015 on Jan 09, 2004. The index has signaled a breakout above the bearish channel after a 4 month trading period within this range. The oscillators are showing a higher tops formation and need a confirmatory rally to give a clear buy mandate. Watch the channel top trendline for supports at the 1830 levels in the coming week.

Your call of action - We advocate fresh trades on the Nifty on the long side only on surpassing the 1888 levels. The first profit taking level will be the 1898 level and should the index appreciate further, expect the 1914 level as the next immediate resistance zone. Stop losses on the lower side should be maintained at the 1878 levels.

Dow Jones Industrial Average - This old economy benchmark index on the NYSE is currently consolidating at the current levels. The support in the coming week will come at the 10,180 levels and resistance at the 10,625 levels. The oscillators are pointing towards a fall and the outlook is weak for the coming week.

Dow Jones 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 - The new economy index has slumped and indicated weakness in the biotech and software counters. The oscillators are signaling weakness and should the index fall below the 1975 mark, expect the previous support of 1897 to be also violated. It should be noted that the Nasdaq has never peaked to the Dec 03 levels, and is making lower tops. That is a sign of clear caution in the near term.

Nasdaq Composite - Weekly chart

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

FTSE - The index is showing higher relative strength as compared to the US markets but is still under pressure as long as it does not surpass the 4650 levels with heavy volumes. Downside support exists at the 4410 levels and the current week is a crucial one for this UK benchmark.

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 put / call ratio is climbing and is currently at the 0.43 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative improvement. The FII investments have reversed on April 15, which are indicators of absolute caution.
There is offloading at higher levels in Nifty futures. That indicates a cautious approach as long positions in individual stocks is being hedged by Nifty shorts.
The current fortnight is crucial for the markets as the election process will start gaining momentum and the markets are likely to make up their minds on the directional call in this period.
The index heavy-weights are showing strength again. This in turn will boost the indices and cause a feel good factor. The only worry is that this upbeat sentiment should continue.
The impeding expiry of the April series will see offloading and higher volatility in the near term.
Trades must be executed in small volumes due to the higher volatility expected. Trade fewer counters and conserve cash for future opportunities.
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 any securities mentioned above.