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.

Bajaj Auto - this two wheeler major is in a major uptrend and is a market out-performer as the counter has a very higher relative strength as compared to the indices. The stock is trading above it's moving averages and is likely to breakout above the 948 levels, where a buy call is triggered. The lower inflation, better prospects vis-a-vis Hero Honda and relief on the monsoon fears are other positives. We recommend a buy on the counter.

Bharat Electronics - this PSU electronics major is showing a breakout formation as the scrip has broken above it's 4 month highs with good volumes. The oscillators are supporting the upmove and the the relative strength of the scrip is 3 times higher than that of the BSE Sensex. We recommend a buy on the counter for the discerning investor.

Bharti Tele - this PSU private sector major is in a short term uptrend as the chart indicates. The FDI in the telecom sector and rate wars leading to higher subscriber bases are seeing the private players gaining over their public sector counterparts. This scrip is rising above it's 200 day SMA and and the oscillators are pointing towards to further upmove and levels of 160 maybe possible. We recommend a speculative buy on the counter.

Canbank - This PSU banking major is a beneficiary of the improved sentiments in the banking segment as the inflation numbers have gone down and interest rate fears have receeded into the background. The most noteworthy aspect of the graphic below is the scrip hitting the highest rate in the last 4 months and the 200 day SMA in the bargain. The same has been achieved on volumes higher than the 10 day average, however, the overall volumes have shrunk. We recommend a buy for the aggressive / high risk traders.

Essar steel - This low priced steel scrip is consolidating at the current levels and has been in a groove between the 24 / 31 levels since June 2004. A breakout above the 31 levels will be a trigger for the traders to build long positions. This trade is for higher risk appetite traders.

Gujarat Ambuja Cements - This cement major is showing high relative strength as the scrip is hitting 52 week highs and is on the verge of a breakout. The oscillators are pointing to a consolidation or a minor dip before the breakout occurs. Buying on a confirmatory breakout is advisable for traders.

Glaxo - This MNC pharmaceuticals major has been recommended by us on various occassions in the past editions and has delivered profits as per our expectations. We repeat the triggers for this counter - the EMR ( exclusive marketing regime ) slated to be ushered in by 2005 wherein the patenting laws in the land would be changed from process patent to product patents. This will curb cheaper cloning by competitors. Glaxo is the largest pharma company in the world, having a very vast portfolio of patents. After the EMR, the income of this company is expected to skyrocket. Other positives are the sale of Mumbai property to generate cash for business, hiving off of tail ended brands and getting rid of non-core generics. A must have for the delivery based investor with 6 month patience.

HDFC Bank - Another banking story that is in the limelight as the inflation fears receede. Being a new age, net enabled bank with relatively lower NPA's is likely to be a positive trigger for the scrip. It should be noted that the scrip is currently quoting at near it's life time high, is a very strong market out-performer with 750 % out-performance record over the Sensex ! The oscillators are showing a rounding bottom formation and have triggered a buy since the scrip closed above the 384 levels. Any sustained close above the 408 levels will see a further rally to the 420 - 425 levels in the near term. Buying is recommended for the discerning investor / traders.

HPCL - this PSU oil stock is making a gradual comeback as the scrip is making higher tops and bottoms formation along it's short / medium term averages. Above a closing of the 335 levels, expect the scrip to rally faster as the low resistance levels the scrip is likely to enter. We recommend a trading buy for the short term players.

Indian Oil Corp - this PSU oil major is showing signs of an upmove as the scrip attempts to rally past it's 200 day SMA. The traded volumes are above the 10 day average and the oscillators are pointing towards an upmove in the near term. We recommend a trading buy for the high risk appetite players.

Mah & Mah - this tractors / utility vehicles major is likely to be a beneficiary from the lower inflation figures, easing crude prices and better than expected rainfall figures. The stock has signalled a short term breakout from a 5 week congestion levels and closed higher. Any sustained closing above the 455 levels will see an accelerated upmove. The oscillators are pointing towards a further upmove being fairly possible.

Ranbaxy Labs - This domestic MNC pharmaceuticals major has been recommended by us on various occassions in the past and we have been projecting a price of 1200 + in the medium term. The stock has witnessed a breakout from the flag formation ( measuring move ) after closing above the 1035 levels. The stock has a very high relative strength as as the indicator shows a reading of over 540 % over the BSE Sensex. We expect the 1200 - 1250 levels in the medium term and recommend a buy on declines for the long term investors.

SAIL - This steel major is likely to benefit from the upmove in the cyclical counters and the metal stocks. The stock has signalled a breakout above the 5 month highs and closed higher. The oscillators are showing an uptrend and should the stock manage to stay above the 41 mark, expect the counter to remain bulllish. We recommend a trading buy on the counter.

SBI - The banking sector is undergoing an upbeat phase for the reasons specified above. We feel the largest bank and the most liquid stock will be an obvious winner in the upmove. We recommend a buy as the counter has closed above the 3 month highs and a short term congestion level. The volumes have surpassed the 10 day average.

SCI - This PSU shipping major is in an uptrend as the stock moves above it's 5 month average and the oscillators signal an uptrend in the undertone. The counter has a high relative strength and out-performs the BSE Sensex by 167 % as the oscillator shows. We recommend a trading buy for the short term players.

Tisco - This steel sector bell weather is witnessing an uptrend as the chart suggests a close above the 277 levels is the highest in 4 months ( after adjusting for the bonus factor ). The oscillators are in a buy mode and confirming a bullish undertone. We recommend a trading buy for the relatively aggressive traders.

BSE Sensex - The sensex is showing higher relative strength as compared to the Nifty on account of the disparity in composition of the indices. The oscillators are pointing towards a bullishness and the index has crossed the 200 day SMA before the Nifty 50. The index has scaled the channel top and will probably consolidate before making a fresh high in the near term. We feel the 5630 - 5645 levels will be where the Index will encounter resistance in the coming days. On the lower end, expect support at the 5424 in the coming 2 - 3 sessions.

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

Nifty 50 - The has been bullish as we had accurately forecast in all of last week. Once a close above the 1669 levels were achieved, the upmove gained momentum. The oscillators are pointing towards further upsides and the chances of a fresh upmove cannot be ruled out. Since a significant rally has occurred already, the Nifty is trading above it's 200 day SMA after 4 months, we feel the Nifty may consolidate before moving higher. Due to the high short sales in the F&O segment, any major fall is ruled out as short covering will cushion the falls in the market.

Your call of action - Buy the Nifty futures on declines of 1718 levels and maintain a stop loss of 1704 levels. We expect the 1760 - 1765 levels to be a possibility in the coming week.

Dow Jones Industrial Average - This NYSE index has broken out above it's bear channel but is unable to hold ground at higher levels. It is crucial that the 10,370 levels be surpassed if the index is to make fresh highs. On the lower side, expect support at the 10,185 levels in the near term.

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 technology / biotech major is moving in a downward sloping channel and is likely to see the upsides being capped at the 1960 in the coming week. Only a sustained closing above this level will see 2010 levels. On the downsides, expect support at the 1868 levels in the near term.

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 UK index is making higher tops and bottoms formations since a month and has higher relative strength as compared to the US markets. The supports are likley at the 4465 levels and the resistance at the 4675 levels in the coming week.

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 climbing and is currently past the 0.50 : 1 levels and the outstanding positions in the derivatives segment has shown a qualitative increase. The FII investments are continuing steadily.
There is buying at lower levels in stock futures. That indicates a bullish approach as long positions in individual stocks is being hedged by Nifty shorts.
The current fortnight is crucial for the markets as the markets will succumb to bulls or bears by the end of this week before sizeable trades are carried over to the next settlement. The bias so far is bullish.
The index heavy-weights are showing strength again. This in turn will boost the indices and cause a feel good factor.
Trades must be executed in small volumes due to the higher volatility expected. Trade fewer counters and conserve cash for future opportunities.
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 any securities mentioned above.