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 has been firming up of late and the trader interest has been adequately alive on this counter. The F&O segment shows a build up of positions on the counter. The recent corrective fall in the markets has seen a slight profit taking on the counter. The noticeable aspect of the chart is the higher tops and bottoms formation. If the fall witnesses a support at the previous highs, the uptrend will remain intact and the next rally will see the top of 240 being surpassed. Buy only if the stock manages to stay above the 224 levels and shows signs of revival.

BHEL - this PSU electricals major is in a long term uptrend and gets historical support at it's 30 day SMA which is currently poised at the 435 levels. The stock is one of the strongest amongst the PSU's and has a high relative strength ( RSC ) compared to it's peers and the benchmark indices. We recommend buying this counter on declines for position traders with a 5 - 8 session perspective.

Cipla - this pharmaceutical major is witnessing a sharp corrective fall after a steep run upwards. The 30 day SMA is a historical support and should see a bounce-back from these levels. Buying is recommended on the counter on these declines. The stock is making a higher bottoms and tops and that is a sign of bullishness.

Gas Authority - this PSU gas pipeline is making higher tops and bottoms and has a very high relative strength as compared to the indices. The stock gets good support at the 160 levels where it becomes a fresh entry on the long side. The oscillators are suggesting a slight fall before a rally occurs again.

ICICI Bank - This new age bank has been recommended by us frequently and has been a market out-performer in the recent times. The scrip has never looked back after a breakout above the 230 levels. The stock has a support at the 13 and then the 30 day SMA's. The oscillators are supporting an upmove and the scrip is making higher bottoms and tops which is a positive sign. This stock holds the highest potential amongst the recommendations made herein. Patient position traders may buy into the counter on major declines. Expect the previous high to be surpassed in the coming rally.

Infosys - This counter holds tremendous promise as the technology bell weather. The outlook for technology stocks is improving and with the sector, the market leader too will benefit. The MACD oscillator suggests strength in the undertone and any closing above the 5135 levels will see a good 5 % upmove.

Maruti - this passenger car major has declared good results and is in a restructuring mode to capture lost market share. There are likely to be a slew of new launches, revamped versions of existing models and price cuts by the year end. The 13 day SMA will be a good short term support where aggressive accumulation can be initiated.

NIIT - This counter was recommended last week as a safe fixed income play as the chart suggested an upmove. Though I had suggested that the upmove was not certain last week, the stock was recommended via SMS above 180 and a target price of 194 was suggested. That target was fulfilled and the stock is likely to consolidate. A fresh rally should not be ruled out. We recommend a buy on declines.

Reliance Industries - this counter has been recommended by us as a market leader and forecast as capable of leading the markets from the front. The stock has seen a routine post result fall and has taken support at it's 13 day SMA on a closing basis. There is a good support for this counter on it's 30 day SMA which is placed at the 470 levels. Should this support of 470 not be violated on a closing basis, expect a bounceback. We recommend a buy.

Satyam Computers - This counter has been buzzing due to the news of the possibility of IBM picking up a stake in the company. The bullishness in the technology counters is also likely to aid the sentiments. However, we maintain a neutral stand on the direct equity route and suggest a fixed income approach instaed.

Telco - This automobile major is in a major long term uptrend. The scrip has had a tremendous run up and and is expected to consolidate at the present levels before the next decisive movement occurs. The 30 day average is a historical support and needs to be watched for the near term. Since the contract size is a hurdle, we suggest taking the options route to make an exposure on the counter.

Tisco - This counter is another strong performer from the Tata stable and has been a market out-performer since more than 6 months. The stock is also displaying high relative strength and is a buy on declines. The stock being a big ticket contract in the F&O segment, we suggest an options route to take positions on the counter. We recommend a buy on declines.

Zee Telefilms - this media house scrip is showing signs of a revival as the price is making higher tops and bottoms on the weekly chart. The positive trigger has been the positive outlook in the recent results and an improved advertisement revenue stream. Any revival in the economic outlook of the industry will benefit this scrip as the subscription revenues will also add to it's bottom-line. The scrip is a buy as long as it keeps it's head above the 134 mark. The scrip was recommended last week at the 136 levels with a target price of 152 / 154 which was successfully achieved.

BSE Sensex - Our outlook remains that of a bullish market. Our prediction of the 5130 levels being a major psychological resistance have been justified. It is important that these levels be overcome with heavy volumes and positive breadth to signal a fresh upmove. On the lower side, expect support at the 4900 - 4878 levels.

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 to encounter resistance at the 1625 - 1630 levels, which has been proven accurate. The Nifty will remain bullish as long as it stays above the 1574 levels. All bull positions must be maintained with a stop loss at the 1542 levels. The upmove is likely to continue once the current correction / consolidation ends this week.

Your call of action - We advocate fresh trades on the Nifty on the long side only on declines. Once the Nifty shows signs of bottoming out, fresh purchases can be made in the November series. Fixed income players can sell the November 1460 puts at a suggested premium of Rs 7. Traded volumes need to be curtailed as the markets are likely to be slightly nervous.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. The outlook for the index is optimistic on positive non-farm employment figures and steady interest rates. Should this index clear the 10,000 mark, expect an accelerated upmove. We expect the next levels to be 10,110 and 10, 256 as the near term resistance points. On the lower side, expect support at the 9740 levels.

Dow Jones Industrial 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 - This new economy benchmark index measures the outlook on the Nasdaq exchange. This index has made a new 22 month high and has been advocated by us as making a saucer formation. The relative strength of this index is significantly higher than that of the Dow and we feel any breakout above the 2000 mark will lend a tremendous boost to the domestic software counters. The oscillators are pointing towards a sustained upmove and our outlook remains positive.

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. Last fortnight we predicted that only once the 4350 levels were surpassed, expect the 4460 to be a distinct possibility. Downward support was advocated at the 4200 levels. This index has closed higher than the previous week and above it's 13 WMA - signs of optimism. Watch the 4420 and 4100 band for a direction.

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 at the 0.19 : 1 levels and the outstanding positions in the derivatives segment have shrunk considerably. However, once the short term resistance levels have been surpassed, the markets are likely to rally higher.
The index heavy-weights are now exhibiting signs of profit taking and only when Reliance, Hind Lever, Infosys, Telco, Tisco and ITC remain firm, expect the broader indices to move in tandem. Watch these counters for guidance.
Trade cautiously as compared to the previous week as the outlook is guarded. The undertone is nervous and worries exist on slowing down of FII inflows due to christmas holidays.
The NSE imposing higher margins and cutting overall exposure levels is likely to keep the markets under pressure in the near term. Therefore abundant caution is advised.
We suggest an even exposure between the equity route and the steady returns for the coming week due to impeding expiry of the F&O contracts in four sessions. Trades must be initiated with minimal volumes.
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 the stocks mentioned above.