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 counter has closed at it's highest levels since 6 weeks and that is a sign of comfort to the bulls. The cement sector is witnessing a post monsoon revival as the sales figures are back in focus. Chartically, the counter is appearing bullish as the price graph is well supported by the oscillators and the volumes have jumped significantly too. We recommend a buy for short term traders, though delivery based investors should await a crossover of the 225 levels.

BHEL - This counter has been recommended earlier in the "Flavours of the week" editions and has been a very profitable proposition for the investors & traders. This PSU electricals major is one of the highest dividend payers to the government, has a robust order book position and is in a long term uptrend. The chart pattern suggests significant relative strength and the the oscillators suggest a fresh upmove. The 13 day SMA support is very meaningful and should be watched for traders. We recommend a hold for existing long positions and a buy on declines.

Bank of India - This counter has been recommended in the morning call newsletter since it gave a breakout above the 60 levels and has been in the money. This counter has been a favourite among the traders and investors alike. Having made a new high, the scrip is in a low resistance zone and is likely to appreciate further. The oscillators are supporting an upmove and buying is recommended.

HPCL - this PSU refining major has fallen from grace after the disinvestment decision was suspended. There have been more question marks on the future disinvestment plans than there are answers, and consequently, there has been bull unloading. Though the counter has taken support at it's 200 day SMA, the same cannot be construed as infallible. Therefore we suggest this counter for the pure returns conscious safe player.

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. Wipro's results has brought sector back in the limelight again. The stock is showing signs of strength and a close above the 4750 levels will see a level of 4830 & 4900 rapidly in a conducive market.

Larsen & Toubro - this counter was recommended by us ever since a breakout was achieved above the 312 levels on the daily chart. The bullishness in the cement sector, expectations of a turnaround in the economy is imparting a feel-good-factor on this counter as the price makes new highs regularly. The counter appears to have run up too fast and too much. Though the oscillators and averages dont signal a major fall, a correction is likely. Therefore we suggest this stock as a pure fixed income play.

Mah & Mah - This tractor / passenger / utility vehicles manufacturer has been a prolific recommendation in our editions since it was quoted at Rs 185. The reco's have been highly profitable as the scrip has rewarded investors and traders alike. Having run up so high, we feel this counter is slightly stretched and therefore recommend it for a fixed income play.

Maruti - This counter has made a new high and surpassed a critical resistance in the bargain. We have recommended a buy on the counter above the 281 levels and the scrip is still hovering in that groove. Traders and investors can continue to accumulate the stock at the current levels. The oscillators are pointing towards to a continued optimism.

SBI - This counter has made lifetime highs with clock work frequencies and is a bell weather stock in the banking sector. Having a tremendous relative strength, this is a good investment on declines for a discerning portfolio investor. For sector based investors, this scrip is a must have.

Syndicate Bank - another banking PSU that is emerging stronger, being a low priced counter, the scrip witnesses high volumes. The stock has made a new high on the charts on a closing basis and that is a sign of comfort for the bulls. We recommend a buy on the counter on declines.

Tata Power - this power generation major from the Tata stable was recommended last week ( click here to view previous editions ) at 200 - 210 and 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 likely to scale the 4860 and beyond. Our outlook was that of a bullish market. We re-affirm our view that the markets are in for a bullish Diwali. The 4950 - 5000 levels will be a minor psychological resistance beyond which a level of 5066 is likely.

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 1568 levels. Which has been achieved accurately. The upmove is likely to continue. Holding existing long positions / adding on declines is advisable. Expect the next levels to be at the 1588 and 1610 on the upsides. Lower support exists at the 1522 levels

Your call of action - Hold existing long positions and buy fresh for trading purpose above the 1570 mark. Fresh trades must be in small lots only. Maintain a stop loss on previous purchases at the 1532 levels. Fresh trades must be stopped out at the 1544 levels. Expect profit taking at the 1585 & 1598 levels.

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. Since the Dow Jones index has managed 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 conclusive close above 9850 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 - 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 4460 resistance was not surpassed. Only once the 4350 levels are surpassed, expect the 4460 to be a distinct possibility. The outlook appears bullish and downward support exists at the 4200 levels.

FTSE - Daily 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 0.31 : 1 levels and the outstanding positions in the derivatives segment have shrunk marginally and the Nifty shows a higher outstanding of puts rather than calls. Therefore trades must be initiated very carefully. 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 cautiously as compared to the previous week as the outlook is guarded. Holidays are around the corner and volumes will be lower and volatility higher. The impeding expiry of the October series will also exert squaring up pressure. Stop losses must be maintained diligiently.
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. A higher emphasis has been on the calls rather than futures and 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.