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.

Arvind Mills - this textile major was recommended vide our earlier editions Dtd. Sept 09, Oct 10 and Oct 31, 2004. Please click here to view previous reports. The scrip is making lower tops and bottoms formation and is currently trading near a critical trendline support at 109.50 levels. The scrip is trading below it's short & medium term averages and the averages themselves are pointing lower. That shows selling pressure at higher levels. Traders have made good profits in the last week on two days by going short on the counter. We recommend a negative bias on the scrip especially if two criteria are fulfilled - the markets turn weak again and the scrip starts trading below the 109 levels convincingly. This being a short term recommendation, we advocate small lots and that too for higher risk, short sales savvy traders only.

BPCL - this scrip was recommended vide our earlier editions Dtd. Dec 26, 2004 and Jan 01, 2005. Please click here to view previous reports. The scrip is news driven as the international prices of crude oil largely influence this refining majors short term directions. Technical traders will note two important aspects about this chart - the scrip has seen a 15 % fall last week & the fall has occurred from below the May 17, 2004 highs. That shows the inherent weakness on the counter in the absolute near term. Also note the ascending triangle formation on the chart and the scrip on the threshold of the 52 week SMA at the 400 levels. We feel this level is a crucial support, if violated will result in further weakness. The near term support is likely at the triangle top which coincides with the 30 week SMA at the 375 levels. High risk traders may go short on the counter upon a confirmed breakdown from the 400 levels in a bearish market.

Glaxo - this scrip was recommended vide our earlier editions Dtd. Sept 19, Oct 03, Oct 10, Nov 07, Nov 21, Dec 12 and Dec 19, 2004. Please click here to view previous reports. We feel the MNC pharma stocks have taken a beating in excess of the market logistics and are overdone on the downsides. For a discerning investor, lower levels offer attractive short / medium term investment opportunities for pure delivery based investors. We recommend a buy on significant declines near the 52 week SMA supports.

HDFC Bank - this banking scrip was recommended vide our earlier editions Dtd. Sept 19, Oct 03, Nov 07, Dec 12, Dec 26, 2004 and Jan 09, 2005. Please click here to view previous reports. The most noteworthy aspect of this scrip is the extremely high relative strength on this counter - whether in comparison to the Nifty - 50 or the BSE - 30. The scrip has exhibited consistently higher tops and bottoms formation and suggestive of strength in the undertone. We recommend a buy on declines as the previously advocated target of 540 holds good in the medium term.

Hind Lever - This FMCG major is a index heavy-weight and is capable of swaying the indices with itself. Chartically speaking, the scrip has broken down below it's bearish triangle and also it's short / medium term averages. The oscillators are in a sell mode and we recommend a sell for the highly aggressive traders.

HPCL - this scrip was recommended vide our earlier editions Dtd. Sept 19, 2004 and Jan 02, 2005. Please click here to view previous reports. The story is similar to BPCL mentioned above and a savvy trader will need to watch the international crude prices for short term trend determination for this scrip. We foresee a 2 - 3 % fall in the scrip in case crude prices rise. A short sale is recommended on advances.

IPCL - this scrip was recommended vide our earlier editions Dtd. Oct 03, Oct 10 and Nov 21, 2004. Please click here to view previous reports. The important aspect to notice is the breakdown from a 6 week neutral channel and the weakness in the short & medium term moving averages which are turning lower. We recommend a short sell on advances in small lots for the high risk traders.

Ranbaxy - this scrip was recommended vide our earlier editions Dtd. Sept 19, Sept 26, Nov 07 and Nov 14, 2004. Please click here to view previous reports. The sharp fall on this scrip in the last fortnight has seen a 15 % drop in prices. A scrip with a relative strength of 550 + is investment worthy after a fall so steep. The technical support is significant near the 52 week SMA, which stood at the 1030 levels on Friday. We recommend a buy in small lots at these levels for the patient and disciplined investor - trader.

Raymond - this scrip was recommended vide our earlier editions Dtd. Sept 19, Nov 21 and Nov 27, 2004. Please click here to view previous reports. The scrip has been a strong market out-performer and is retracing lower as the market sentiments have weakened. Profit taking is likely to see a downward exertion of prices - possibly to the 250 levels, where the scrip is a buy.

Telco - was recommended vide our earlier editions Dtd. Oct 02, Oct 23 and Nov 14, 2004. Please click here to view previous reports. The scrip is reacting lower on profit taking and has a triple bottom short term support at the 475 levels. Should it close below the 475 mark, expect a steeper fall to the 465 - 468 levels. The oscillators are in a sell mode and the the moving averages are showing weakness / selling bias on advances. Aggressive traders may short the counter.

Tisco - this scrip was recommended vide our earlier editions Dtd. Sept 19, Sept 26, Oct 03, Oct 10, Oct 23, Nov 07, Dec 05 and Dec 19, 2004. Please click here to view previous reports. The chart shows the stock having a month long support at the 344 levels as the trend-line indicates. The scrip is consolidating between the 345 - 359 band and a breakdown below the 344 levels especially on a closing basis with higher volumes will result in a short term fall. Aggressive traders may await the breakdown and short the scrip in a weak market scenario.

Tata Power - this scrip was recommended vide our earlier editions Dtd. Sept 12, Sept 26, Oct 03 and Nov 14, 2004. Please click here to view previous reports. The noteworthy aspect is the multiple support at the 335 levels since mid November 2004. If the scrip bounces back from those levels, a level of 350 can be seen. If a breakdown occurs, the scrip can react lower by 10 - 15 Rupees. We recommend a short sale subject to a confirmatory breakdown below the support.

BSE Sensex - the sensex is showing a steep decline below it's short / medium term averages. There exists a possibility of a pullback rally, which is confirmed only if the Sensex manages to close a session above the 6250 mark. On the flip side, a fall below the 6084 levels on a closing levels will see a 2 - 3 % fresh fall in the near term. Traders should await a clear trend indication before acting in the markets.

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

Nifty 50 - the Nifty's chart is similar to the Sensex and a pullback is possible if the index closes above the 1966 levels with higher volumes. The upward resistance areas would be the 1988 and then the 2004 levels. On the flip side, expect the fall below the 1930 levels to take the Index to the 1912 / 1918 levels and a fall below the 1900 levels will see the 1880 - 1888 mark.

Your call of action - Await a clear direction in the index and take positions accordingly. A surge past the 1966 levels will be a sign of strength and a conclusive close below the 1930 is a sign of weakness. All trades must be initiated in the February futures after adjusting for premium / discount to the spot rates mentioned above.

CNX IT - this IT index is trading below it's 13 week SMA for the first time in 6 months and that is sign of weakness. The index can fall all the way to the 2565 mark in case the composite stocks do not recover in the near term. On the upsides, the 2820 will be a resistance area.

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

Dow Jones Industrial Average - The Dow is retracing lower and likely to derive immediate support at the 10400 levels. It is crucial that this index not fall & close below the 10400 levels in the coming weeks if any recovery is to be seen. On the upsides, the 10715 levels will be the immediate resistance levels to watch.

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

Arvind Mills I BPCL I Glaxo I HDFC Bank I Hind lever I HPCL I IPCL I Ranbaxy I Raymond I Telco I Tisco I Tata Power 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 IT / Biotechnology laden index is showing a sharp retracement in the previous fortnight and is currently at it's threshold support at the 2075 levels. A conclusive fall below this level will see support at the 2000 levels. On the higher side, expect resistance at the 2125 levels.

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 showing higher relative strength as compared to the US indices as the fall has been relatively muted. The 4720 levels will be the threshold support to watch in the coming week and 4875 levels to watch on the upsides.

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 easing and is currently at the 0.23 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative degeneration. The FII investments are continuing to remain negative.
There is offloading at higher levels in stock futures. That indicates a cautious approach as long positions in individual stocks is being hedged by Nifty shorts.
The current week is crucial for the markets as the 1910 - 1930 supports will decide the near term fate of the markets.
The impeding expiry of the January series will see offloading and higher volatility in the near term. Due to holidays before the expiry, the trading sessions left before expiry are fewer.
Trades must be executed in minimum lots only, 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.