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.

Andhra Bank - This banking PSU is another recommendation that has paid off in the past editions of this newsletters. This counter was also included in the special banking report compiled on Oct 22, 2003. The weekly chart shows a sharp rally that has been witnessed in the last 11 months is appearing stretched. We therefore advocate a buy on declines on this counter for the discerning investor. This stock has one of the highest relative strength readings in the markets today and that makes it relatively safer as an investment - especially so on declines.

Ashok Leyland - This south based commercial vehicles major is in an uptrend and is showing a high relative strength as compared to the broader markets. The stock is attempting to test it's previous tops and is getting support at it's 13 & 30 day SMA's. The slower momentum oscillators point towards a possibility of a further upmove. In keeping with with our philosophy of initiating confirmed trades, we advocate buying only above a breakout level of 232 especially on a closing basis with higher volumes.

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. The reco was re-inforced last week at 62 levels and has proven to be highly profitable. 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 on declines is recommended. The attraction is the high relative strength as the scrip has been appreciating inspite of the overall market being nervous.

Corporation Bank - This PSU banking stock has been a steady performer even before the banking sector came into the limelight due to the asset securitisation act. Having a high relative strength, this counter is a market out-performer and also fundamentally attractive. The scrip gets good support at the 13 week average which is currently poised at the 208 levels. This average has not been violated on a closing basis since November 2002 and is therefore a very meaningful support. We recommend a buy for the patient delivery based investor.

Gujarat Ambuja Cements - this cement major is another strong market out-performer and shows a high relative strength consistently. This factor ensures a low risk of a significant erosion in prices even if the markets slip lower. A consistent closing above the 242 levels would be a confidence inspiring move to signal a fresh entry on the counter.

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 208 levels. The stock has a resistance at the previous top of 232 and any closing above the 230 will make it a highest closing level for this counter. The oscillators are supporting an upmove and the scrip is making higher bottoms and tops which is a positive sign.

Indian Hotels - This Tata group hospitality major is in a major upmove as the counter is trading near it's 4 year highs. The ending of hostilities in the Gulf marked the turn around in sentiments for this sector as the business / leisure traveller was expected to return to the circuit. Our investors will recall that this scrip was recommended in the Oct 10, 2003 edition of the Flavours of the week and has been profitable for investors ( Click here to view previous editions ). There has been a consolidation in the industry and the same is showing in the stock price charts. We recommend a buy on declines for a patient investor having a medium / long term approach to investing.

Indian Overseas Bank - this PSU banking scrip is in a major upmove and finds excellent support at the 13 week average as can be observed from the weekly chart below. The stock has a very high relative strength and that makes this a safer bet. Currently trading at near it's new trading zone, this counter is a buy.

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 446 levels. Should the previous top of 498 be conclusively surpassed, expect an accelerated surge. We recommend a buy.

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. This stock has been covered in the banking sector report compiled for our investors on Oct 22, 2003. For sector based investors, this scrip is a must have. Should the counter close above the 510 levels, expect the upmove to accelerate. Since the results are expected in the coming week, higher volatility is expected. Trade will small volumes.

Siemens - This counter has been recommended by us ever since the scrip broke out above the 414 levels and the counter has never looked back since then. The scrip is showing tremendous relative strength and is making new highs will a precise regularity. The oscillators are supporting an upmove and we recommend a buy for the discerning portfolio investor with a 3 - 6 month perspective.

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 bottomline. The scrip is a buy as long as it keeps it's head above the 132 mark.

BSE Sensex - Last week we had accurately pointed out that the Sensex was likely to encounter resistance between the 4950 - 5000 levels - the Sensex could not surpass the 4951 levels. Our outlook was that of a bullish market. We re-affirm our view that the markets are in for a bullish phase - though after a healthy consolidation. The 4950 - 5000 levels will be a major psychological resistance. On the lower side, expect support at the 4600 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 surge higher once it crossed the 1570 levels, which was proven wrong due to the meltdown in the markets. The index has retraced all the way down to the 30 day SMA and has bounced back from that level. The 30 day SMA should be construed as the immediate support for the coming week at the 1450 levels. On the higher side, expect a fresh sustainable upmove only as and when the Nifty surpasses the 1574 levels on a closing basis - that too with higher volumes.

Your call of action - We advocate fresh trades on the Nifty on the long side only when the index trades consistently above the 1528 levels and the position should be protected by a stop loss at the 1510 and a price target of 1545 - 1550 on the upsides. Traded volumes need to be curtailed as the markets are likely to be nervous.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. Last week we advocated that the 9700 mark was a short term determinator for the index. Since the Dow Jones index has managed to close below the 9700 mark, the levels on the downside are the 9470 and 9422. The oscillators are pointing towards a weakness in the index.

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. Last week, we had predicted that the Nasdaq was expected to get support at the 1838 levels. Our view was proved correct as the intra-week low on the index was 1842. Though our outlook is bullish for the Nasdaq, the same were proven unjustified as the index has slid lower. Should the 1810 levels be violated, expect a faster fall. The oscillators are currently pointing towards a weakness.

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 that only once the 4350 levels were surpassed, expect the 4460 to be a distinct possibility. Downward support was advocated at the 4200 levels - the index saw a low of 4212 !!!. This index has closed lower from that level and has a support at the 4100 levels which should not be violated in the coming week. 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 0.29 : 1 levels and the outstanding positions in the derivatives segment have enlarged marginally and the Nifty shows a higher outstanding of calls as compared to puts. However, only once the short term resistance levels have been surpassed, the markets are likely to rally higher.
The post-result profit taking has commenced and that is likely to be the major domo trigger for the markets in the short term.
The index heavy-weights are now exhibiting signs of profit taking 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. 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 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.