The Professional Ticker Reader TM

Your accurate, authentic and affordable guide to investing

Flavours of the week                                                             Dec 14, 2003

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.

Andhra Bank - this PSU bank was recommended on many an occasion in the earlier editions and has been profitable as a fixed income and trading play in the past. The stock has managed to close at a threshold of a new significant high - a fact that makes this counter interesting to watch this week. Should a clear close above the 50 mark be achieved with good volumes, expect the counter to accelerate the upmove.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above a close of Rs 50 only with a stop loss at 46 and a target of 56 / 58 be maintained before budget.

• Aggressive F&O traders - buy the December futures above a price of 48 and maintain a stop loss at the 46 levels. Expect to book profits at the 50 - 52 levels.

• Fixed income strategy - n/a

• Derivatives contract size - 4600 shares. F&O margins approx Rs 60,000 ( margins subject to change daily)

ACC - This cement major has been getting good chartical support at it's 13 week SMA. The stock is showing higher relative strength as compared to the BSE Sensex and the downsides are limited. Since the days to expiry of the December series are limited, we restrict the recommendation to fixed income players only.

Your call of action - 

• Investors / cash segment players - n/a.

• Aggressive F&O traders - n/a.

• Fixed income strategy - Sell the Dec 210 puts at a suggested premium of Rs 1.10 or above.

• Derivatives contract size - 1500 shares. F&O margins approx Rs 1,00,000 ( margins subject to change daily )

BPCL -  This oil refining PSU has closed at the highest level after making a lifetime intra-week high. The stock is a market out-performer and is in a bullish groove. We have recommended this counter repeatedly in our previous editions dated - 05/07/03, 12/07/03, 14/08/03, 23/08/03, 30/08/03, 13/09/03, 11/10/03 and 06/12/03  ( click here to view our previous editions ). The expectations of an interim dividend and petrol price hike are an additional positive trigger for the stock. The 30 day average tends to be a strong support for this scrip as it manages a close above this average. Currently, the average is poised at the 360 levels. Buying in recommended on the counter for swing traders.

Your call of action - 

• Investors / cash segment players - buy the stock on slight declines of 380 levels. Maintain a stop loss at the 360 levels and expect a profit target of 410 / 415 in a firm market.

• Aggressive F&O traders - Buy the December futures ( currently quoting at a Rs 3 discount to cash ) above 396 levels and hold with a stop loss at the 387 levels. Expect profit taking at the 408 levels in the near term. In a conducive market, we expect the script to surpass the 410 mark relatively easily. Options players can buy the December 400 calls at a premium of Rs 4 or below.

• Fixed income strategy - Sell the December 350 puts at a premium of Rs 3 or above.

• Derivatives contract size - Market lot 1100 shares. F&O margins approximately Rs 95,000 ( margins subject to change daily )

Gas Authority - this PSU gas pipeline major is undergoing a major re-rating as the stock is gaining favour with investors and FII's alike. We have been advocating this counter in the past editions dtd - 8/8/03, 14/8/03, 22/8/03, 10/10/03, 31/10/03, 7/11/03, 29/11/03 and 06/12/03 ( click here to view our previous editions ) since the price was 130 !! The stock has been a superb performer and has yielded good profits. Last week we forecast that a closing above the 183 mark would propel the scrip in a new trading zone and see an accelerated upmove - a fact proven factually correct. The RSC ( relative strength comparative ) oscillator shows a reading of 130 - which makes this counter a market out-performer.

Your call of action - 

• Investors / cash segment players - Last weeks buy positions achieved the 200 mark, where profits were booked. Fresh buying on the stock is advocated at the 188 mark. Stop losses should be maintained at the 181 levels and so some room for downward averaging should be kept. Expect a price of 210 ⁺  in a firm market 4 - 6 weeks down the line.

• Aggressive F&O traders - Buy the December futures ( quoting at Rs 1.20 premium to cash ) at 188 levels. Maintain a stop-loss at Rs 183 and expect to book profits at 197 - 200 by expiry in December - if the market conditions remain conducive. Options players are advised to abstain due to impeding expiry.

• Fixed income strategy - Sell the December 170 puts at a suggested premium of Rs 0.50 or above.

• Derivatives contract size - Market lot = 1500 shares, F&O margins approx Rs 50,000 ( margins subject to change daily ).

Gujarat Ambuja Cements - this cement major was recommended by us ever since a price level of 194 was surpassed - a handsome appreciation has already been achieved. The recommendation dates were 12/7/03, 19/7/03, 26/7/03, 02/08/03, 09/08/03, 26/10/03 and 01/11/03 ( click here to view our previous editions ). The stock is back to it's winning ways again and has cleared the 300 hurdle. A fresh appreciation is likely in the near term.

Your call of action - 

• Investors / cash segment players - Buy as long as the stock remains above the 300 mark and keep a stop loss at the 285 mark. Expect to sell at the 335 + levels in a conducive market by budget time.

• Aggressive F&O traders - Buy the December futures above a price of 300 and maintain a stop loss at the 295 levels. Expect profit taking at the 309 / 311.

• Fixed income strategy - n/a

• Derivatives contract size - 1100 shares. F&O margins = Rs 60,000 ( margins subject to change daily).

Grasim - This cement major is in a major uptrend as the chart indicates. The stock has seldom closed below the 30 day SMA and that makes this an attractive buy - especially above the 930 mark, where a higher tops and bottoms formation would be confirmed. 

Your call of action - 

• Investors / cash segment players - Buy above a closing of 930 and maintain a stop loss at the 900 levels. Expect slight profit taking at the 950 levels, which are a short term hurdle. Once the scrip crosses the 950 mark, we expect the 1000 + levels to be achieved sooner rather than later.

• Aggressive F&O traders - buy the December futures above a closing price of 930 ( quoting at Rs 5 premium to cash ) and maintain a stop loss at the 921 levels. Expect to book profits at the 940 - 944 levels.

• Fixed income strategy - n/a

• Derivatives contract size - 700 shares. F&O margins approx Rs 95,000 ( margins subject to change daily )

HPCL - this PSU refining major is moving up on similar considerations as BPCL and the chart pattern is exhibiting tremendous strength in the short term. We advocate a buy in the cash segment and also a fixed income play due to it's inherent strength.

Your call of action - 

• Investors / cash segment players - Buy on slight declines upto 385 / 390 levels and hold with a stop loss at the 370 levels. Expect a price of 430 / 440 in the medium term.

• Aggressive F&O traders - buy the December futures above a price of 400 and maintain a stop loss at the 393 levels. Expect to book profits at the 410 levels.

• Fixed income strategy - Sell the Dec 350 puts at a premium of Rs 1.25 or above. 

• Derivatives contract size - 1300 shares. F&O margins approx Rs 1,25,000 ( margins subject to change daily )

ICICI Bank - this bank has been a strong market out performer and was recommended by us ever since a breakout occurred above the 195 mark. The earlier reco's were dated 02/08/03, 23/08/03, 26/09/03, 04/10/03, 26/10/03, 01/11/03 and 08/11/03. We feel this scrip is likely to continue it's upmove and get support at the 260 mark. A buy is re-affirmed on the counter.

Your call of action - 

• Investors / cash segment players - buy the scrip on declines at the 270 mark and maintain a stop loss at the 258 levels. Expect to take profits at the 395 - 400 mark. Last weeks recommendation has been highly profitable as the 280 profit target was achieved.

• Aggressive F&O traders - buy the December futures at the 272 mark with a stop loss at the 266 levels. Expect a profit target of 288 in the near term. Last weeks recommendation has been highly profitable as the 267 profit target was achieved.

• Fixed income strategy - n/a

• Derivatives contract size - 1400 shares, F&O margins approx Rs 85,000 ( margins subject to change daily )

I-Flex - this company is a leading banking solutions provider and is making itself felt strongly in the European Union. The counter is attempting surpass it's previous highs and a closing above the 855 mark would be an ideal confirmation of further bullishness.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter at the present levels with a stop loss at the 795 levels and a profit target of 900 + levels before budget.

• Aggressive F&O traders - buy the December futures above a closing price of 855 and maintain a stop loss at the 835 levels. Expect to book profits at the 885 levels.

• Fixed income strategy - n/a

• Derivatives contract size - 600 shares. F&O margins approx Rs 1,00,000 ( margins subject to change daily )

Infosys - this software bellweather is likely to be the biggest beneficiary in the upbeat US markets after the capture of Saddam Hussein as the US $ firms up and technology companies see a feel-good-factor due to stable forex management. We recommend a buy.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above 5080 levels and suggest a stop loss at the 4990 levels. Expect profit taking at the 5200 levels

• Aggressive F&O traders - buy the December futures above a price of 5090 and maintain a stop loss at the 5000 levels. Expect to book profits at the 5200 - 5240 levels.

• Fixed income strategy - Sell the Dec 4700 puts at a suggested premium of Rs 30.

• Derivatives contract size - 100 shares. F&O margins approx Rs 1,20,000 ( margins subject to change daily )

MTNL - another counter which has been a regular feature for our fixed income players as the movement tends to be predictable. The scrip is a confirmed underperformer and a laggard. Selling calls at higher levels is recommended.

Your call of action - 

• Investors / cash segment players - we do not advocate delivery based buying into the counter as the outlook is unclear at this point in time.

• Aggressive F&O traders - n/a.

• Fixed income strategy - Sell the Dec 140 calls at a premium of Rs 0.50 - 0.70

• Derivatives contract size - 1600 shares. F&O margins approx Rs 30,000 ( margins subject to change daily )

Nalco - This aluminium major is in bullish hands as the metals prices are sky rocketing and prospects for the industry get better. The stock is currently at it's short term peaks and any significant close above the 176 levels will propel it higher sharply.

Your call of action - 

• Investors / cash segment players - we advocate delivery based buying into the counter above the 175 levels and maintain a stop loss at the 166 levels. Expect profit taking at the 190 levels in the medium term.

• Aggressive F&O traders - buy the December futures above a closing price of 176 and maintain a stop loss at the 168 levels. Expect to book profits at the 185.

• Fixed income strategy - n/a

• Derivatives contract size - 2300 shares. F&O margins approx Rs 2,00,000 ( margins subject to change daily )

Satyam Computers - This software major is likely to be a big beneficiary of the bullishness in the US markets - especially after the capture of Saddam Hussein. The stock has a good support at the 30 day SMA which is currently at the 330 levels. A good medium risk buy for the slightly adventurous trader.

Your call of action - 

• Investors / cash segment players - we do not advocate excessive delivery based buying into the counter as our choice would be Infosys in the sector. However, die-hard Satyam fans may buy at the current levels and maintain a stop loss at the 337 levels and hope to book profits at the 355 mark.

• Aggressive F&O traders - buy the December futures above a price of  349 and maintain a stop loss at the 345 levels. Expect to book profits at the 355 / 357 levels.

• Fixed income strategy - sell the Dec 310 puts at a premium of Rs 2 or above.

• Derivatives contract size - 1200 shares. F&O margins approx Rs 1,20,000 ( margins subject to change daily )

Tisco - This steel major has been a frequent feature of this newsletter and has also returned good profits to traders and investors alike. The scrip has broken out of a congestion band is headed higher in the near term. A conclusive close above the 380 mark would be a confirmation of a fresh upmove. Recommended for fixed income players as well as traders.

Your call of action - 

• Investors / cash segment players - Buying is recommended above a closing price of 380 and a stop loss be maintained at the 372. Expect a target price of 394 in the near term.

• Aggressive F&O traders - buy the December futures above a price of 383 and maintain a stop loss at the 375 levels. Expect to book profits at the 395 / 397 levels.

• Fixed income strategy - Sell the Dec 350 puts at a premium of Rs 1.60 and above.

• Derivatives contract size - 1800 shares. F&O margins approx Rs 1,85,000 ( margins subject to change daily )

BSE Sensex - We have predicted a possible recovery in the latter half of last week after a shaky start. That forecast has been justified as the index has closed above the 5300 levels. We expect the index to scale the 5400 levels this week and exhibit further strength. A conclusive close above the 5350 is a key indicator.

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

Nifty 50 - Through out last week, we had advocated that the Nifty was expected to show strength above any closing above the 1685 mark. That was proved accurate and the index has managed to close above that point. Also a 1600 support in the near term was advocated. We now raise that support to the 1620 levels. Selling puts or buying calls is advocated. We foresee a 1730 - 1740 level on the Nifty in the coming week.

Your  call of  action - We advocate fresh trades on the Nifty on the long side only on declines that too in an indirect fashion by selling puts or buying calls to be on the safer side. Sell the December 1630 puts at a premium of Rs 8 or above and contemplate buying the December futures above 1703 and maintaining with a stop loss at the 1694 levels. Expect to book profits at the 1720 levels.

Have a  profitable week.

 

Vijay L Bhambwani

Ceo :- Bsplindia.com

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.

---

Legal  notice :-  The Professional  Ticker Reader is  a  trademark  of  Bhambwani  Securities (P) Ltd.  and  any un-authorised  replication / duplication  in part or full  will  be  infringing  our  trademark and  will  result  in legal  action  being  enforced  on  the  infringing  persons / parties.

---

While all due care has been taken while in compiling the data enclosed herein, we cannot be held responsible for errors, if any, creeping in. Please  consult  an  independent  qualified  investment  advisor  before  taking  investment  decisions. This mail is not sent unsolicited, and only advisory in nature. We have accepted no consideration from any company mentioned above and recommend taking decisions on merits of the stocks from our viewpoint. This email is being sent to you as a paid subscriber. Please protect your interests and ours by not disclosing the contents to any un-authorised  person/s