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 cement major was recommended vide our earlier editions dtd Oct 23, Nov 21, Dec 05, Dec 12 & Dec 26, 2004 and has appreciated as per our expectations. Click here to view the previous reports. The scrip has exhibited bullishness on the charts as the higher tops and bottoms formation has taken the price graph above it's previous top at the 315 levels. Technical analysts will note that the scrip is at a lifetime high in terms of closing levels. The relative strength stands at 183 where 100 = base. That makes this scrip a market out-performer. The ocillators are signaling a bullishness and we recommend a buy on the counter.

Bajaj Auto - this 2 wheeler major was recommended earlier vide editions dtd Oct 03, Oct 10 Dec 5, Dec 12, Dec 19 & Dec 26, 2004 and has been one of the most profitable recommendations from us in the last 3 months. Click here to view the previous reports. The scrip has a very high relative strength of 220 ( 100 = base ) and exhibits a rising tops and bottoms formation which signals a bullish undertone. The breakout above the 1068 levels has seen the scrip enter an intermediate uptrend as the closing is at the 11 month highs. That indicates bullishness in the undertone and we recommend a buy on declines for the patient investor with a view to maintain longs till the budget.

BPCL - this petroleum refining and marketing PSU major is seen making higher tops and bottoms formation. Our investors will recall that a short sale recommendation via sms in the previous week resulted in a stop loss being triggered. The main criteria to benchmark this scrips price will be the international prices of crude. As the crude prices slide, the crude marketing scrips will appreciate due to improved cash flows. Technical traders may note that the scrip trades above the 52 week SMA and is at it's highest since May 2004. The oscillators are pointing towards a bullishness and we recommend a buy for the patient investor / trader.

Canara Bank - this PSU banking major is showing signs of gaining upward momentum as the scrip sheds it's lethargy and makes a higher tops and bottoms formation and a breakout past it's congestion levels of 190 - 195 mark. Technical analysts will note the very high relative strength of 405 ( 100 = Base ) and the oscillators being in a buy mode. The scrip has currently achieved a lifetime high closing and that is a sign of underlying strength. We recommend a buy on declines.

Cipla - This scrip was recommended by us via sms on Dec 21, 2004 at 306 levels and has performed well. Having one of the highest relative strength reading at 1293 in the entire market, this pharmaceuticals major shows a very strong chart reading as the higher tops and bottoms formation and a breakout above the 298 levels imbibes confidence. The oscillators are supporting the upmove and the scrip has closed at it's highest since Dec 1999. We recommend a bullish outlook on the counter.

HPCL - This story is similar to the BPCL recommended earlier and a breakout is signalled above it's 52 week SMA. That is a sign of bullishness as the scrip now trades at it's highest since May 2004 levels. We recommend a buy on the counter.

Infosys - this software bellweather was recommended by us in our earlier editions dtd Oct 10, Oct 17, Oct 23, Oct 31, Nov 07 & Nov 21, 2004 Click here to view the previous reports. This scrip is under pressure from the weakening US $ and a re-rating of the sector by a few broking firms. However, technical analysts will note that this scrip enjoys a very high relative strength at the 14331 mark ( 100 = base !!! ) and it's ability to bounce back cannot be wished away. The oscillators on the week chart below are showing signals of profit taking at higher levels and a good support base at the 1995 levels. We feel this scrip merits a pre-result bullish speculative trade by the medium risk appetite traders and we recommend a buy on the counter in small / medium lots.

BSE Sensex - the Sensex has ended the year 2004 with record highs and a bullish pattern as the chart below depicts. Technical traders may please note how the 13 day SMA is offering reliable support to the price graph and the Sensex has managed to close above this average. That is a sign of underlying strength in the markets. It also denotes a downward floor at the 6480 levels in the coming week for the Sensex below which the Sensex should not close. The upward target is 6684 / 6722 in the coming week in a bullish market scenario.

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

Nifty 50 - the Nifty has managed to set it's records this year end as the index notched up record highs and gets similar support at the 13 day SMA which has proved to be a reliable floor. This week, the index should not close below the 2050 levels and the upward target is at the 2120 / 2134 levels in the near term on the upsides.

Your call of action - Buy the January futures ( quoting at Rs 7 premium to cash ) on minor declines to the 2075 - 2078 levels and hold with a stop loss at the 2065 levels. Expect to book profits at the 2110 - 2120 levels in the short / medium term. Options players may buy the January 2100 calls at a premium of Rs 28. Income conscious players may sell the January 1950 puts at a premium of Rs 8 and above

CNX IT - this IT index is showing clear signs of fatigue as the US $ worries drag down the composite stocks. Technical analysts will note the critical points on this chart - the falling tops and bottoms, the violation of the 13 & 30 day SMA's and the averages themselves falling lower. We expect good short term support at the 2875 - 2885 levels below which a fresh weakness maybe seen especially if the traded volumes are higher. Upsides are likely to be capped at the 3015 levels in the coming week.

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

Dow Jones Industrial Average - this NYSE old economy benchmark has run into resistance at the 10868 levels on lower volumes and profit sales by bulls on year end considerations. The outlook in the week ahead remains positive and we expect support at the 10625 levels in the coming week. A fresh bullishness is unlikely till the index closes above the 10870 levels with higher volumes. The Dow currently trades near it's 3 1/2 year highs.

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

ACC I Bajaj Auto I BPCL I Canara Bank I Cipla I HPCL I Infosys I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Nasdaq - the Nasdaq has also made a similar chart pattern as the Dow Jones index above and is currently trading at it's 3 1/2 yearly highs. The breakout from the bearish channel is now a confirmed flag formation and enables a projected target of 2240 levels in the short / medium term in a conducive market scenario. The 2130 levels remain a critical support to watch.

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

ACC I Bajaj Auto I BPCL I Canara Bank I Cipla I HPCL I Infosys I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

FTSE - this UK index has shown higher relative strength as compared to the US indices as the FTSE nears a congestion level of 4845 levels. Only above a conclusive close over this level will the index witness a fresh rally. On the lower side, expect support at the 4740 levels.

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

ACC I Bajaj Auto I BPCL I Canara Bank I Cipla I HPCL I Infosys I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Trading tips for the week

The put / call ratio is easing and the outstanding positions in the derivatives segment have shown a routine declines on expiry. The FII investments are continuing steadily.
There is buying support at lower levels in stock futures. That indicates a bullish approach, and long positions in individual stocks is being hedged by Nifty shorts.
The index heavy-weights are showing strength again. This in turn will boost the indices and cause a feel good factor.
The expiry of the December series has seen above average carry over of open long positions and squaring up of shorts. That shows a bullish bias.
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.