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.

BHEL - this counter was recommended in the daily edition 3 days ago when the scrip overcame the congestion levels of 458 levels. The stock has appreciated significantly since then. Large overseas orders and the subsiding of fears in the power sector are positive triggers for this scrip which are likely to keep the bullish sentiments alive in the near term. The oscillators are pointing towards an upmove and the price graph shows an attempt to crossover the 200 day SMA, which will be a signal of the reversal of the short term bearishness.

Glaxo - this MNC pharmaceuticals major has been often advocated by us a delivery investment in the past, and has lived up to our expectations so far. The scrip is a market out-performer as the relative strength of this counter is extremely high as compared to the indices. We advocate a buy on this counter for the delivery investor with a 6 month perspective.

Infosys - this software bell weather is likely to trade on an ex-bonus basis in the near future and the prices are also governed by the derivatives expiry considerations in the absolute near term. The counter has taken support at it's 200 day SMA and that has been a reliable support in the short term. Technically, the counter will attract accelerated buying from bulls and short covering from bears after a closing above the 5300 levels is achieved. We recommend a buy on that breakout.

IPCL - This petrochem major is under pressure from the bears as the scrip is making lower tops. A violation of the 138 levels on a closing basis, with higher volumes will see a faster fall. On the flip side, only a close above the 150 levels will signal a reversal in the short term bearishness. Our advise is to await a breakout / breakdown before initiating a trade, our bias is on the downside.

Mastek - This software second rung counter is showing signs of a gradual build-up of upward momentum as the price graph shows a higher bottom formation. The scrip is headed towards an upward congestion zone of 290, which must be surpassed to signal a buy.

Reliance - This diversified major is showing signs of consolidation as the price graph is showing a narrow truncated movement within two short term averages. The scrip has made a bottom at the 434 levels, which remains the floor in the absolute short term. On the higher side, expect resistance at the 459 levels which will act as a hurdle in the short term. Await a breakout before initiating a buy call. In our opinion, if there has to be a rally in the markets, it is likely that this scrip will lead the upmove from the front.

SBI - this PSU banking major is showing weakness on the charts as the price graph shows a lower tops and bottoms formation. The stock is currently at it's short term support at the 431 levels, which if violated, will see an accelerated fall. We advocate a sell on this counter.

BSE Sensex - The sensex is making lower tops and bottoms formation as the chart indicates. The movement is within a bearish channel and a rough and ready support is seen at the 4725 levels. Should the Sensex close below the 4725 mark with higher volumes and negative market breadth, expect the downmove to gain momentum. On the upsides, the bearish trend will reverse only if a consistent close above the 4880 is achieved.

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

Nifty 50 - The Nifty is also making lower tops as can be observed from the chart below. The support in the immediate future exists at the 1456 levels, which will be a short term trend determinator. Should the 1456 level be violated with heavier volumes and negative breadth, expect a sharper fall to the 1398 levels. The upsides will see a resistance at the 1530 levels which will be the upper threshold for the Nifty to overcome.

Your call of action - We advocate fresh trades on the Nifty on the short side only on declines below the 1456 mark, by selling the July futures below the 1440 levels and maintaining a stop loss at the 1455 levels and a profit target of 1400 levels. Trades must be initiated on lower volumes.

Dow Jones Industrial Average - this NYSE index is showing signs of consolidation above the short term averages as the week ahead is likely to see volatility ahead of Fed deciding the interest rates. Support on the downsides exist at the 10,250 levels and resistance at the 10,580 levels.

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 tech heavy index is consolidating at the 1950 supports which needs to be watched for signs of a breakdown. On the higher side, expect resistance at the 2025 levels 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 shows a narrow sideways movement as the markets consolidate at the present levels. Lower support comes at the 4350 levels and the resistance on the higher side will be at the 4640 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 put / call ratio is climbing and is currently at the 0.34 : 1 levels and the outstanding positions in the derivatives segment have shown a quantitative increase in futures and options segments. The FII investments are continuing, albeit at a much slower pace.
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 is crucial for the markets as June series expire and positions are expected to be built before the budget. Should the open interest increase inspite of expiry, the markets will have found a support.
The index heavy-weights are showing sideways movement. This in turn will make the indices range-bound.
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.