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.

Arvind Mills - the textile major was recommended last week ( click here to view our previous editions ) at the 52 levels. The scrip is showing signs of significant unloading as the post result selling coupled with the market volatility took their toll. The immediate support at it's trendline & would be a good entry point for investors with a medium term perspective. The noticeable aspect about the chart pattern is the fall being accompanied by lower volumes. That makes the selloff a result of routine profit taking rather than panic sales. We recommend a buy on declines in small quantities only.

Canara Bank - one of the biggest losers in the banking sector in the recent past, we feel this counter is likely to witness some buying momentum at lower levels from value buyers and short covering by bears. This stock is very attractively valued in terms of fundamentals and is likely to see a good support at the 130 levels where a buy is recommended.

Gas Authority - this gas pipeline major has been a prolific feature of our newsletter and has been recommended vide our editions dtd 02/08/03, 09/08/03, 16/08/03, 23/08/03, 11/10/03, 01/11/03, 08/11/03, 29/11/03, 06/12/03, 13/12/03, 18/01/04 & 25/01/04 ( click here to view our previous editions ). The stock has appreciated since then and paid rich rewards to our investors. The recent fall has been triggered by elections being announced and a result of a feeling that the IPO ( initial public offering ) maybe hurried up, even at a lower price. The stock has also been over-extended and therefore a corrective fall was in order. The announcement of a final date of the IPO and road shows beginning in a fortnight is likely to cheer the stock price. The short term momentum oscillators are turning higher from oversold levels and we expect the scrip to appreciate 10 % shortly. We recommend a buy on significant declines as the outlook remains positive on the sector and stock in the medium / long term.

Hind Lever - this counter is an index heavy-weight and is currently showing signs of weakness. The stock has been one of the more prolific features of this newsletter and has had an above average success rate, especially in the steady returns arena. We feel this counter has the potential to fall further as the sentiments for this scrip remain nervous. We recommend a short sale for the aggressive traders.

Maruti - we have been recommending a buy on this automobile powerhouse as the numbers expected from the company suggest that the counter is likely to see rapid upmoves based on fundamental and technical strength. Previous recommendations were made vide our editions dtd 18/10/03, 08/11/03, 03/01/04 & 25/01/04 ( click here to view our previous editions ). The 30 day SMA is proving to be a good support and the same is poised at the 395 levels. We recommend a buy on declines for the patient investor.

BSE Sensex - Last week, we predicted that this correction is the first meaningful one after November 2003 and the same is being proved by the wild gyrations in the market prices. The index has seen a near term bottom and is likely to see a similar fall - possibly upto the 5550 levels in an extreme scenario. Moreover, the near term upsides are also seem limited to the 5850 - 5900 mark in the coming week.

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 expected to see high volatility with support at the 1750 levels and a close at 1820 levels, all of which has been proved reasonably accurate ( click here to view our previous editions ). The support has not been tested / violated and the closing price has been near the specified levels. We expect high consolidation in the coming week ( just as we had last week too ) as stocks are expected to change hands from weaker to stronger hands. Only above a conclusive closing over 1920 levels, with higher volumes and a positive breadth, will the next upward target be achieved. Till then, we expect every major advance to be a sell signal for the bears.

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 February 1700 puts at a premium of Rs 20 or above - that too in limited quantities.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. Last week we had advocated resistance at the 10,750 levels ( click here to view our previous editions ) which proved a major hurdle for the markets. The Dow Jones has under performed as compared to the Nasdaq and is likely to remain under pressure at the 10750 levels. Expect the 10,280 levels to be a good short term base for this index in the near term.

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. This index has made a new 30 month high ( highest since July ' 01) recently and has been advocated by us as making a saucer formation. The relative strength of this index is surpassing the Dow. Last week, we forecast that the 2170 levels will be a short term resistance ( click here to view our previous editions ). The 2000 levels would remain a good base for this index. Both these levels have been proved accurate, and above a 2175 close, expect the next resistance at the 2240 - 2250 levels.

Nasdaq - Weekly 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. As we have been forecasting a 4300 level support, this index is making a base in the near term and showing short term strength ( click here to view our previous editions ). Our outlook though mildly positive for this index is also that of an under-performer as compared to the US markets. The oscillators are pointing towards a fall at present levels - only above a conclusive close above 4560 levels, will a new rally start.

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 steady at the 0.15 : 1 levels and the outstanding positions in the derivatives segment have decreased significantly. The FII investments are steady. The Nifty and Sensex being under pressure, expect sharper volatility.
There is offloading at higher levels in stock futures. That indicates a cautious approach as long positions in individual stocks is being hedged by Nifty shorts.
The current week holds out hope for the bulls as the vote-on-account budget and lower margins in FnO will make it easier for the bulls to buy / hold long positions in the current month.
The index heavy-weights are showing bar reversals at new highs. This fact was also mentioned in the previous week. This is a worrying indicator 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.