The Professional Ticker Reader TM

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Flavours of the week                                                            Sept 12, 2004

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 bell weather is showing signs of strength as the scrip has closed at near it's weekly highs and the stock continues on it's higher bottoms formation. The oscillators are pointing towards a rally in the making and any close above the 277 levels will see the stock enter a low resistance area. The stock is a trading buy.

Your call of action - 

• Investors / cash segment players - Buy the scrip in small lots for delivery above a close of 277 and hold with a stop loss at the 267 mark. Expect profit taking at the 290 levels in the medium term in a conducive market.

• Aggressive F&O traders - Buy the September futures above a close of 277 and hold with a stop loss at the 273 mark. Expect profit taking at the 283 levels in the near term in a firm market.

• Derivatives contract size - Market lot = 1,500 shares, F&O margins = approx Rs 69,000 ( subject to change daily ).

Aztec Software - this mid cap software counter was recommended in the previous edition above a breakout over the 39 levels - which are achieved. The oscillators are pointing towards a continued bullishness in the sentiments for the counter and as long as the 37 levels are not violated on a continued closing basis, the outlook will remain positive. This scrip is a speculative buy.

Your call of action - 

• Investors / cash segment players - buy as long as the stock remains above the 39 levels and hold with a stop loss at the 36 mark. Expect profit taking at the 44 - 45 levels in a firm market in the near term.

• Aggressive F&O traders - F&O n/a.

• Derivatives contract size - F&O n/a.

Gujarat Ambuja Cements - this cement major is showing tremendous relative strength to the index as the scrip is on the threshold of a breakout above it's congestion levels at the 347 levels. Any close above this hurdle will propel this counter into a new 52 week high and therefore into a low resistance trading zone. The traded volumes are logging above 10 day average figures and the momentum oscillators are pointing towards a bullishness in the undertone. We recommend a buy.

Your call of action - 

• Investors / cash segment players - Buy the scrip for delivery at lower levels of 335 - 337 mark and hold with a stop loss at the 325 mark. Expect a price of 355 - 360 once the breakout above 347 is achieved.

• Aggressive F&O traders - Buy the September futures above the 346 levels and hold with a stop loss at the 338 mark. Expect profit taking at the 354 levels in the near term

• Derivatives contract size - Market lot = 1,100 shares, F&O margins = approx Rs 59,000 ( subject to change daily ).

Infosys - this software bell weather counter has been a frequent feature in this newsletter and a price 1600 - 1625 was advocated by us ever since the company announced it's recent quarterly results. That expectation has been fulfilled as the counter has signalled a flag formation as the graphic suggests. That makes price forecasting a relatively easier task. The formation suggests a price of 1690 as the logical objective and we advocate a buy on declines on this counter for the higher risk traders.

Your call of action - 

• Investors / cash segment players - buy the counter on declines to the 1575 levels and hold with a stop loss at the 1515 levels. Expect profit taking at the 1675 - 1700 in the near / medium term in a conducive market.

• Aggressive F&O traders - Buy the September futures on declines at the 1615 levels and hold with a stop loss at the 1575 mark. Expect profit taking at the 1665 - 1675 levels in a conducive market in the near term. Alternately, sell the September 1560 puts at a suggested premium of Rs 10 and above.

• Derivatives contract size - Market lot = 200 shares, F&O margins = approx Rs 55,000 ( subject to change daily ).

ITC Ltd - this cigarettes-to-hotels-to-FMCG scrip has signalled a breakout above it's congestion trendline as the above graphic suggests. The same has been achieved on higher traded volumes and a positive confirmation on the momentum oscillators. The company is a beneficiary from the recent SC verdict on an excise dispute which involves over Rs 800 crs. The newsflow is likely to keep trader interest high on this counter. We recommend a buy on this counter on minor declines.

Your call of action - 

• Investors / cash segment players - this counter is a buy on declines to the 1075 - 1080 levels in small lots for delivery purposes. The stop loss is at the 1050 levels and a profit motive of Rs 1125 be expected in the short / medium term.

• Aggressive F&O traders - buy the September futures on declines to the Rs 1070 levels and hold with a stop loss at Rs 1053 mark. Expect profit taking at the Rs 1115 levels in a conducive market.

• Derivatives contract size - Market lot = 300 shares. F&O margin = approx Rs 55,000 (subject to change daily )

Jai Balaji Sponge - this mid cap ferrous metals player is in the uptrend in the short term as the graphic shows. The traded volumes are headed higher and the counter is showing signs of appreciation in price as the 6 month highs are likely to be tested. Being a mid-cap counter, we recommend a speculative buy on this counter.

Your call of action - 

• Investors / cash segment players - buy above the Rs 20 mark and hold with a stop loss at Rs 18. Expect profit taking at Rs 24 - 25 levels in a firm market in the short / medium term.

• Aggressive F&O traders - N/a

• Derivatives contract size - N/a

Reliance Inds - this counter has been advocated by us as being capable of leading any rally from the front and needs to close above it's short term congestion levels of 490 before a fresh upmove can commence. The momentum oscillators are pointing towards a bullishness in the undertone in the short term..

Your call of action - 

• Investors / cash segment players - buy for delivery above 490 and hold with a stop loss at the 482. Expect profit taking partly at 498 and completely at 504.

• Aggressive F&O traders - Buy the September futures above the 490 mark and hold with a stop loss at the 485 levels. Expect profit taking at the 497 levels in the short term.

• Derivatives contract size - Market lot = 600 shares. F&O margin = approx Rs 49,000 (subject to change daily )

RPG Transmission - this mid-cap story is also a low priced one which makes this an attractive bet for traders. The traded volumes have picked up, but are a far cry from the other mid cap scrips. The counter has undergone consolidation between the 18 - 24 levels and now broken out above this band with good volumes. We recommend a trading buy on the counter

Your call of action - 

• Investors / cash segment players -  buy above the 25 mark and hold with a stop loss at the 21.50 mark. Expect 30 or above in a conducive market in the short term.

• Aggressive F&O traders - F&O n/a.

• Derivatives contract size - F&O n/a.

Satyam Computers - this software major has broken out of a major consolidation pattern after a 11 month sideways channel movement. The breakout has occurred on heavy volumes and with support from the oscillators and volumes. That makes the upward target estimated at 385 levels in the immediate future. A trading buy is recommended on the counter.

Your call of action - 

• Investors / cash segment players - Buy for delivery at current levels with a stop loss at the 361 mark. Expect profit taking at the 384 levels in the near term in a conducive market.

• Aggressive F&O traders - buy the September futures at the 369 mark, maintain a stop loss at the 364 levels and expect to book profits at the 377 levels in the near term. Alternately, sell the September 330 puts at a premium of Re 1 or above.

• Derivatives contract size - Market lot = 1,200 shares, F&O margins = approx Rs 73,000 ( subject to change daily )

Tata Power - this power major is showing signs of upward movement as the chart indicates. The scrip has broken out of a short term consolidation period and has been supported by the oscillators which makes the upmove relatively credible. The red trendline will be the threshold level to watch as a stop loss and long trades can be initiated for the short term.

Your call of action - 

• Investors / cash segment players - buy above the 288 levels and hold with a stop loss at the 278 mark. Expect profit taking at the 300 levels in a conducive market in the short term

• Aggressive F&O traders - Buy the September futures above the  287 mark and hold with a stop loss at the 282 levels. Expect profit taking at the 294 levels.

• Derivatives contract size - Market lot = 800 shares, F&O margins = approx Rs 39,000 ( subject to change daily )

Zicom Security  - this is another mid cap story which is a relatively safer bet. The upmove is accompanied by heavy volumes and positive support by oscillators. The 43 levels are a congestion zone that needs to be watched out for and any sustained trade above this level will be a positive trigger for the counter. We recommend a trading buy on the counter.

Your call of action - 

• Investors / cash segment players - Buy above the 43 mark with a stop loss at the 38 levels. Expect profit taking at the 50 levels in a conducive market.

• Aggressive F&O traders - F&O n/a. 

• Derivatives contract size - F&O n/a.

BSE Sensex - this BSE benchmark is showing signs of upward strength and is likely to surpass it's 200 day SMA with a surge in volumes. The oscillators are supporting the upmove and the Sensex is likely to test the upper end of the channel at the 5470 - 5500 in the coming fortnight - barring any unforeseen circumstances. Maintain a bullish bias.

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

Nifty 50 - the Nifty is showing a healthy spurt supported by oscillators and moving within a bullish channel that makes the outlook positive. The lower support is at the 1633 levels and upside target is the 1700 mark. The index is likely to rally in the coming week rather than fall due to bear covering coupled with bull support at lower levels. Maintain a bullish bias for now.

Your  call of  action - buy the September futures on declines at the 1660 levels and hold with a stop loss at the 1648 levels. Expect to book profits at the 1678 levels in the near term. Alternately sell the 1580 puts in the September series at a suggested premium of Rs 8.

Have a  profitable week.

 

Vijay L Bhambwani

Ceo :- Bsplindia.com

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.

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