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.

Asian Paints - this paints major is witnessing a long uptrend in it's stock price and has proved it's investor friendly approach by way of a recent bonus. That also makes the counter more liquid as traded volumes were a source of concern. The oscillators are signalling a further appreciation in price - barring corrections and the stock has an extremely high relative strength. That makes this counter a strong investment grade scrip. We recommend a buy on declines.

Bharat Forge - This auto ancillary stock has been recommended by us in over 7 editions in the last three months ( click here to view previous editions ) and we have successfully caught the upmove since the price was in the 275 - 280 range. Though the stock has almost doubled from those levels, it still remains a hold / buy on declines recommendation from us. The bouyant sales in the automobile sector will see a good topline / bottomline growth in this company and the scrip gets good support at the 30 day SMA ( currently at 440 levels ) where it can be bought. A good buy on declines.

Bank of Baroda - This new addition to the F&O list is a market out-performer and leader in the PSU bank segment. The stock is in a major uptrend and should the corrective phase in the market see lower levels, expect trendline support at the 128 levels where the scrip is a low risk buy. A relief rally from these levels will give short term profits to traders / investors alike.

BPCL - This PSU refining major has become a leading trading counter for the high risk players. The triggers are the hopes of an early disinvestment of the Govt stake, foray into the oil & gas drilling under the new exploration licensing policies. With the company launching super premium branded petroleum products for new age MPFI engines, the bottomline is all set to soar. We recommend a buy on major declines.

Cipla - This domestic pharma major is showing signs of regaining lost ground ever since the news of outsourcing anti HIV drugs from India has been out. Cipla is one of the lowest cost anti HIV cocktails and respiratory disorder solutions. The export potential and the defensive nature of the pharmaceutical sector makes this counter a safe bet in volatile times. We recommend a buy.

Glaxo - Another pharma major ( MNC this time ) which is in a major uptrend. This counter has also been a frequent feature in our editions ( click here to view previous editions ) and has been a profitable investment. The stock is perceived as a safe haven for investment and especially so during high volatility in the markets. This company will by and far be the biggest beneficiary of the EMR / IPR regime after 2005. A good buy for the patient investors.

IBP - This petroleum major is showing tremendous signs of strength as the stock has been unaffected by the turbulence in the markets in recent times. The stock is a market out-performer and and is likely to continue to rally in a conducive market. A good buy in small lots.

Mah & Mah - This utility vehicles / tractor manufacturer has been in the investor focus after the launch of new age passenger vehicles. The abortive bid for the control of Valtra has been welcomed by the investors here. The stock is likely to commence a fresh upmove once it crosses the previous congestion levels of 222 - 223. On the lower side, expect short term support at the 200 levels. A good buy on declines.

Mastershares - This stock is one of the most profitable investment and has been recommended since it was quoting at Rs 10 ( click here to view previous editions ). Being a NAV based scheme, the scrip will move in tandem with the market. The scrip faces little / no resistance above the 13.20 mark and should see levels of 15 if the market continues to rally. This is a recommendation for the returns conscious investor.

Siemens - This counter has been recommended ever since the price surpassed the 360 levels ( click here to view previous editions ). The aggressive re-structuring efforts of the company are paying off and the price is reflecting the same. The scrip is a good buy on all declines for the patient investor.

BSE Sensex - Last week, we put forth our estimate to the next resistance at the 4460 levels. The 4460 levels will be the crucial hurdle to watch in the coming week - being the significant high point of February 2001. On the lower side, expect support at the 4250 in the coming week, this level is a double bottom in the short term. The Sensex has not closed below the 13 day SMA since the commencement of this rally and should be the short term trend determinator for short term players.

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 encounter strong resistance at the 1422 levels which will see significant selling pressure. That hypothesis has been proven accurate as the index has failed to close above this level on a single session. On the lower side, support was expected at the 13 day SMA which has been violated. The oscillators are pointing towards a further fall and should the 1350 levels be violated, expect the index to get support at the 1300 levels which coincides with the 30 day SMA as well as the 38 % retracement from the recent high.

Your call of action - Derivative traders having initiated long positions earlier may square up the same - if not done so already. Initiate a short straddle as advocated the previous week and hold positions till further notice. Take positions in small lots only.

Dow Jones Industrial Average - This old economy benchmark index measures the outlook on the New York stock exchange. Last week we advocated that should the Dow manage to close above the 9360 for a few consecutive sessions, we expect a minor breakout upwards. The index is consolidating at the present levels and the next week will be a crucial one for this index. As long as the Dow manages a consistent closing above the 9500 levels, expect the bullishness to persist. Expect a 200 point run upwards to be a possibility. On the downsides, expect support at the 9250 levels.

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 accurately advocated that the worst seems to be over for this index as it has cleared a short term congestion and attempted to make a new high. The index has hit 17 month highs and has boosted the domestic tech stocks which are now trading above their 200 day SMA's. It is crucial that the Nasdaq trade higher than the 1782 levels consistently to signal a fresh run upwards. The next resistance will come at the 1945 and 1963 levels. On the lower side, expect support at the 1815 and then the 1788 levels.

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. The index has been making higher bottoms and tops on the weekly charts. Last week, we observed that the resistance on the upsides would come at the 4300 levels, which has been proved accurate as the index saw a high of 4298 on a weekly high basis. It is crucial that this index close above the 4300 levels consistently to signal a sustained bullishness. In case the index moves higher, expect resistance at the 4465 levels and on the downside, expect support at the 4160 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 sobering at the current levels as it stands at the 0.26:1 since the September series have commenced trading.
The Government's stand on the disinvestment of HPCL & BPCL will determine the short term trend of the markets.
In the coming week, aim for safety first & capital appreciation later. The markets are headed for a speed breaker and possibly a deeper correction this time around.
The index heavy-weights are now beginning to show fatigue and as long as Reliance, Hind Lever, Infosys, Telco, Tisco and ITC remain weak, expect the broader indices to be under pressure also. Watch these counters for guidance.
Trade fewer stocks and keep exposure light till the markets signal a secular directional movement.
We suggest a higher exposure to the steady returns route rather than speculative exposure due to higher risk component.
Adhere to stop losses religously. Await a breakout with a sharp rise in volumes to indicate the next leg of the rally.
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.