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.

Apollo Tyre - This automobile tyre major has hit a new high as can be seen from the weekly chart. There was a crucial resistance at the 200 levels which has been surpassed. The oscillators are supporting a rally and the stock should see higher levels after a brief correction. We recommend a buy on the counter.

Bajaj Auto - this two wheeler major is in a major uptrend and has managed to close near 850 levels on the last trading day of the week. The scrip was recommended last week and has returned superlative returns to our investors / traders alike ( click here to view previous editions ). The counter is showing tremendous relative strength and has not violated the 30 day SMA support which should be taken as the immediate stop loss. Fundamental reasons are also in favour of the stock as good monsoons, export potential and new launches are boosting the topline / bottomline figures. We maintain a buy.

Bharat Electronics - This PSU electronics major is in a long term uptrend and manages to notch up new highs with a clock work frequency. The stock has gained significantly in the recent past and is advocated as a buy on declines. The oscillators are pointing to a fall in the near term.

Ballarpur Industries - This paper major is witnessing a turnaround in the prospects as the industry undergoes an improved outlook. The oscillators are confirming that that the saucer formation is likely to see higher levels being achieved on the price chart. The price graph itself shows a breakout above the previous short term resistance. A likely price target in the near term would be the 81 - 84 levels. We recommend a buy.

BPCL - This PSU refining major has witnessed a profit taking bout as the disinvestment has hit a hurdle for now. However, it maybe remembered that this scrip has inherent advantages over HPCL. This company has better plants as compared to HPCL to manufacture higher octane / distillate fuels required by MPFI / high compression modern cars, is fundamentally undervalued in relative terms and is now likely to attempt a foray into oil & gas exploration in the current round of bidding in NELP IV ( new exploration & licensing policy ). We feel that the 30 day SMA would be a good immediate support where the scrip can be purchased with a strict stop loss in small quantities.

Gas Authority - This gas distributor PSU major is witnessing a major bull run on the charts as the under valued stocks gets re-rated especially after being included in the F&O list. We feel a small correction maybe on the cards, wherein this counter is a buy again for the discerning investor.

Glaxo - This MNC pharmaceuticals major has been recommended by us on multiple occassions and has never failed to reward investors ( click here to view previous editions ). The stock is in an uptrend and the oscillators are showing a possibility of a further appreciation as the previous resistance of April ' 02 have been surpassed. A conclusive close above the 482 mark would see an accelerated rise in the stock price.

Indian Hotels - This hotel and hospitality major from the Tata group owns the "Taj" group of hotels. As the economy picks up, and the environment for the business / leisure traveller improves, the hospitality industry is likely to witness an improved outlook. The company has been doing well and the same is being reflected on the price charts as the previous highs of 282 have been surpassed. The oscillators are signalling a possibility of a further upmove. We recommend a buy.

Infosys - This software bell weather has been in our buy list frequently ever since it surpassed the 200 day SMA ( click here to view previous editions ) at the 3830 levels. The trades have been profitable as the counter has managed a close above the 13 day SMA. We had worries about the US $ falling, taking the bottomline with it, but the forward guidance is positive. The stock is showing signs of strength and a close above the 4640 levels will see a level of 4800 rapidly in a conducive market.

LIC Housing - this housing finance PSU major is witnessing a firm trend as it grabs market share in it's segment. The stock is trading above it's previous resistance levels which is a sign of strength. We recommend a buy on minor declines as there are chances of a downward correction.

Reliance - This counter has been advocated by us as capable of leading the rally from the front. Having recommended this scrip on multiple occasions profitably, we feel every trader should exploit opportunities on this counter every time it takes support at milestone levels. Last week, a buy was recommended and a target of 464 was advised. That reco has turned out to be highly profitable ( click here to view previous editions ). Currently, the scrip has support at it's 13 day SMA which has been a support since May 2003. Buying is recommended.

Tata Power - this power generation major from the Tata stable has surpassed it's previous resistance level on the daily bar chart and is poised for a fresh upmove in a bullish market on expectations of reforms in the sector as well as pickup in the consumption. The scrip is a buy.

BSE Sensex - Last week we had accurately pointed out that the Sensex was to encounter resistance at a level of 4625 in the short term, beyond which the 4750 levels will be a possibility. Our outlook is that of a bullish market. We re-affirm our view that the markets are in for a bullish Diwali. The 4800 levels will be a minor psychological resistance beyond which a level of 4860 is likely this 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 reach the 1492 levels. The short term momentum oscillators indicated a possibility of a further rally and we recommended a buy on the index. This week, we forecast the next resistance levels at the 1539 and 1568 levels for the index. The upmove is likely to continue. Holding existing long positions / adding on declines is advisable.

Your call of action - Since the breakout above 1508 is achieved, buying afresh is recommended in the October futures above the 1520 levels with a stop loss at the 1498 levels. Expect a price target of 1540 / 1565 in the near term. Options players can buy the Oct 1520 calls a maximum premium of Rs 33 - 35 only - that too in minimum lots.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. Last week we advocated that the Dow Jones index was pointing to a rally after strong employment data lead to a belief that the economy was turning around. The 9700 mark was predicted to be a short term trend determinator for the index. Though the Dow Jones index has not manage to close above the 9700 mark, the levels reached during the week have been the highest since June 14, 2002 - a 16 month high. Once a conslusive close above 9985 is achieved, expect the next level to be 9985.

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. Last week, we had predicted that the Nasdaq was appearing stronger than the Dow Jones Index and was slated to gain upward momentum once a close above 1925 was achieved. The Nasdaq has closed marginally lower than the 1925 levels and a minor confirmatory rally is all that is needed to signal a stronger upward momentum. The levels of 1968 and 2108 will be the next upward target in the near term. On the lower side, expect support at the 1838 levels. Our outlook is bullish for the Nasdaq.

Nasdaq Composite - 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 week we predicted selling at 4420 levels which were not reached as the 4330 resistance was not surpassed. Once the 4330 levels are surpassed, expect the 4460 to be a distinct possibility. The outlook appears bullish and downward support exists at the 4200 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 at the 0.30 : 1 levels and the outstanding positions in the derivatives segment have crossed Rs 9400 crs on the long side. Therefore trades must be initiated on the long side rather than take short positions. The short term resistance levels having been surpassed, the markets are likely to rally higher.
The pre-result speculative build-up has commenced and that is likely to be the major domo trigger for the markets in the short term. The software results have enthused the market players and the undertone is optimistic.
The index heavy-weights are now continuing to show strength and as long as Reliance, Hind Lever, Infosys, Telco, Tisco and ITC remain firm, expect the broader indices to move in tandem. Watch these counters for guidance.
Trade as aggressively as compared to the previous week as the outlook is more positive than the recent past. However, stop losses must be maintained.
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 a fortnight.
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.