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.

Alok Textiles - this mid cap textile stock has been in an uptrend and the recent sops to the sector is likely to keep the scrip in the limelight. The stock is nearing the congestion levels at the 65 mark which needs to be surpassed with high volumes to signal a breakout. We recommend a speculative buy on the counter in small lots. This being a mid-cap story, volatility and risk will be high.

Arvind Mills - This scrip was recommended as a buy last week above a breakout of the 73 levels and has fulfilled our bullish expectations. Being a textile story and budget beneficiary, we expect the upmove to continue over a medium term perspective. The oscillators are signalling a strength in the undertone and the short term momentum oscillators show a slight declines as fairly possible. We recommend a buy on declines for the discerning investor.

Bharat Electronics - This PSU electronics major is showing signs of recovery after the budget as the defence outlay has been stepped up. The scrip is likely to face resistance at the 468 levels, above which a further upmove to test the 200 day SMA is likely. The oscillators are signalling a strength and upsides to the a 490 levels can be expected in a bullish market.

Gujurat Alkali - this soda ash / caustic soda manufacturer is showing signs of revival again after a long hiatus as the chart pattern indicates. The daily traded volumes have jumped up 5 times in the recent past. That makes the upmove more credible. The oscillators are pointing to a further upmove and should the scrip remain above the 38 mark consistently, expect the upmove to sustain and test the 45 mark in the near term. We recommend a buy on the counter.

Infosys - this scrip was recommended in the previous edition at the breakout above the 1445 levels and has performed as per our expectations. The only negative for the sector is the TCS ipo which can see some offloading on the frontline technology stocks. The momentum oscillators are pointing to a bullishness in the undertone and as long as the counter stays above the 1370 mark, the bullishness will remain intact. We recommend a hold / buy on declines on the counter.

Kirloskar Ferrous - this is a turnaround story and in the metals sector which is in a bullish grip. The stock gets resistance at the 23 levels which need to be surpassed and closing above this levels is necessary on a continous basis. As long as the counter remains above the 17.50 levels, the uptrend is still valid. We recommend a buy for the medium / long term investor.

Tata Elxsi - this tata group technology player is showing a bullish formation on the charts as the formation is that of higher tops and bottoms. The counter is a beneficiary of the sentiments as the segment is seeing defensive buying as well as the TCS factor. The company is likely to reap windfall returns as the TCS holdings are likely to be converted to cash. We recommend a trading buy in the counter.

Tata Tea - This tata group FMCG player is showing a strong chart formation as the scrip is making an ascending pattern, with the 200 day SMA as a strong support base. The counter is likely to face resistance at the 405 levels which is the congestion zone and triple top in the daily charts. The company is cash surplus and a force to reckon with in the business. There momentum is upwards and buying is recommended on declines or a sharp breakout above the 405 levels. The monsoon news is the only negative for the scrip which is not yet clear as the met department is likely to announce the update on the rains.

BSE Sensex - the sensex is making a rounding bottoms, saucer like formation in the downward sloping channel. That signals a short term rally in the markets. The oscillators are also pointing towards a similar scenario, however, a confirmatory upmove is required to signal a conclusive buy. We feel that the upsides are likely to be capped at the 5120 levels in the coming week. On the lower side, watch the 4840 levels for support in the short term future.

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

Nifty 50 - the Nifty is making similar chart patterns to the sensex and the index gets support at the short term moving averages at the 1518 levels. On the higher side, expect resistance at the 1587 levels, beyond which the 1610 levels are possible. The momentum oscillators are pointing towards a short term upmove on the Nifty in the near term.

Your call of action - We advocate fresh trades on the Nifty on the long side only above the 1567 mark in small quantities with a stop loss at the 1554 levels. On the higher side, expect to book profits at the 1583 levels.

Dow Jones Industrial Average - This old economy benchmark index is showing signs of fatigue at higher levels. The index is likely to see resistance on the upsides at the 10,370 levels and support at the 10,020 levels. We expect selling at rallies due to the earnings worries in the short term. The oscillators are pointing towards a weakness in the undertone.

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 is showing higher degree of weakness as compared to the Dow Jones and has broken below the 52 week average. The oscillators are in a sell mode and the index is likely to test the 1823 levels in the near / medium term as the upsides are limited and vulnerable to offloading by bulls. On the higher side, we expect the 1970 levels to be a strong resistance in the near term.

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 UK index is in a downward spiral as the 52 week SMA support has been violated and the oscillators are pointing towards a further fall. Any closing below the 4300 levels is likely to see an accelerated fall in the short term. We expect a downside of 100 points this weak if the sentiments are weak.

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 0.52 : 1 levels and the outstanding positions in the derivatives segment have shown a marginal increase. The FII investments are continuing to be negative.
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 month is crucial for the markets as there are big IPO announcement's and therefore we expect a shift of focus & resources to the primary markets. The monsoons are likely to be a make or break factor for the markets.
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.
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.