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.

Ashok Leyland - This scrip was recommended vide our previous editions dtd June 05 & 11, July 02 and 09, 2005. Click here to view the previous recommendations. This scrip was recommended on the basis of a confirmed breakout out of a bearish pattern. As the name suggests, breakout patterns are powerful and relatively safe trading opportunities. The same has been achieved with high volumes and a steep ramp up in the open interest. All of which suggest a build-up in upward momentum. The oscillators are confirming the upmove and the stock may test the previous significant high above 30 levels in the medium term. We remain bullish on the counter and advocate a hold on existing long positions and a buy on declines.

Aurobindo Pharma - This scrip is showing signs of a breakout of a falling channel ( similar to Ashok Leyland above ) and the same has been achieved with high volumes and a positive confirmation from the oscillators. The 375 levels are likely to be a trend determining threshold as the scrip must close above and trade sustainably over this threshold to confirm the upmove. The outlook is positive for the domestic pharma sector and any volatility in the stock markets is likely to benefit the sector due to it's perceived defensive status. There is a positive confirmation from the oscillators which adds to the probability of a rally on this counter. The scrip is a buy on a confirmatory breakout above the 375 levels.

Canara Bank - This scrip was recommended vide our previous editions dtd Jan 08, Feb 12, July 09 & 16 2005. Click here to view the previous recommendations. Technical traders will note the scrip moving with a higher tops and bottoms formation within the bullish channel. savvy technical traders will also note the inverted head and shoulder formation in process on the upper trendline. A sustained breakout above the 245 levels with higher volumes will be adequate confirmation of this pattern. Being a measuring move, this pattern enables us to forecast the projected target price of 295 + in a 12 - 15 month time frame, provided the breakout above 245 is sustained on heavy volumes and increase in open interest. The confidence inspiring factors are the oscillators which are in agreement with the price graph and the high relative strength of 233 vis-a-vis the Nifty ( where 100 = base ). We recommend a buy subject to a confirmatory breakout.

Cipla - This scrip was recommended vide our previous editions dtd July 02, 09 and 16 2005 and has performed as per our bullish expectations. Click here to view the previous recommendations. We feel the action on the pharma counters is likely to accelerate due to the relatively defensive perception of this segment. Technical traders will note the scrip trading above a significant congestion zone marked by the pink trendline. Serious technicians will also notice an inverted head & shoulder pattern - again a measuring move. Unlike Canara Bank, the breakout above the neckline is complete, volumes are higher and the open interest has increased - all the factors needed to confirm an uptrend. Note the high relative strength of 569 vis-a-vis the Nifty ( where 100 = base ). We recommend a buy on the counter for the disciplined trader as a breakout of this magnitude often witnesses a pullback downwards, leading to a false sense of threat perception.

Dabur Inds - this scrip was recommended vide earlier newsletters dtd. May 28, June 05 & 11, July 02, July 09 and July 17, 2005 and has performed exactly as per our expectations. Click here to view the previous recommendations. Technical traders may note the already high relative strength of 254 is rising and that too on higher volumes. The scrip is in the second leg of it's upmove and the oscillators are confirming the uptrend. The overall chart pattern imbibes confidence and we suggest a buy on all major declines for the patient and disciplined investors. The upward re-rating of the pharma sector on the whole is likely to help the counter attain higher levels.

ITC - This scrip was recommended vide our previous editions dtd Feb 05 & 26, Mar 05, 12 & 25, April 02, 09, 23 & 30, May 07, 14, 21 & 28, June 05, 11, 18 & 25, July 02 & 09, 2005. Click here to view the previous recommendations. This scrip has the pride of place of being the most prolific as also the most profitable recommendation from our side and has rewarded bulls handsomely. We had put out a profit taking recommendation vide sms at the 1789 levels which were projected 3 months in advance. However, we feel the scrip merits investment at lower levels as support would come short covering cum institutional buying. As per retracement studies, a fall to the 1620 levels would be a good fresh entry point for bulls to start nibbling into the counter with a medium term perspective. The relative strength of 325 vis-a-vis the Nifty ( where 100 = base ) is confidence inspiring and we recommend a buy on declines.

ONGC - This scrip was recommended vide our previous editions dtd. June 25 and July 02 & 09, 2005. Click here to view the previous recommendations. The stock has not performed up to our expectations as the newsflow on subsidy burden sharing created excessive volatility on the counter. We feel the scrip is unlikely to move below the 893 levels which corresponds with the 61.80 % retracement levels on the short term charts. The short term oscillators are pointing towards a build up in upward momentum and a buy is recommended for higher risk / aggressive short term traders.

Tata Chem - This scrip was recommended vide our previous editions dtd July 16 2005 and has appreciated since the buy call. Click here to view the previous recommendations. The scrip is in a bull grip and the second phase of it's upmove which is likely to exhaust at the 225 - 229 levels which were advocated earlier. The directional movement oscillator is signalling a buildup of momentum and the traded volumes have jumped sharply. We recommend a buy on declines for patient trader / investor.

Tisco - This scrip was recommended vide our previous editions dtd Jan 15, 21 & 29, Feb 19 & 26, March 05 & 12 and June 11, 2005 and has been a mixed bag of results. Click here to view the previous recommendations. After a prolonged fall, the stock is showing signs of bottoming out as the scrip makes a higher tops and bottoms formations. The traded volumes have perked up in the last week and the momentum oscillators are showing a build-up of upward momentum. Technical savvy traders will note the inverted head and shoulders formation with the neckline at the 364 mark. Being a measuring move, it is possible to foresee a target of 390 - 395 in the medium term as long as the neckline is not violated with higher volumes. Please note - it is routine for a head and shoulder pattern to witness a retracement to the neckline ( currently at the 364 levels ) after a breakout so panic termination of long trades is not advisable.

Wockhardt - This scrip is in a strong upmove as the chart shows a text book style rising tops and bottoms formation with volumes perking up recently. Currently in the second phase of the upmove, the scrip is likely to gat support at the 405 levels and may see the rally extending to the 520 levels in the medium term. The scrip is a market out-performer and the oscillators are indicating a bullish outlook. Buy on all major declines.

BSE Sensex - this BSE benchmark is in a new trading zone as the closing is at it's lifetime highs. The oscillators are supporting the upmove and the index may scale the 7565 level in the coming week. We feel the downsides are likely to be limited to the 7190 mark in the extreme scenario.

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

Nifty 50 - This NSE index is also at it's lifetime highs and has closed comfortable above the 2249 levels. The bullish channel though violated twice in as many weeks has still held and the next resistance is likely at the 2283 and then the 2337 mark in the coming weeks. Support is likely at the 2239 and then at the 2218 mark. We maintain a bullish bias.

Your call of action - buy long at the current levels if you are a higher risk appetite trader and hold with a stop loss at the 2239. Expect profit taking near the 2283 / 2295 mark in the near term. Traded quantities must be curtailed due to higher volatility expected.

CNX IT - this technology index has recovered in the previous week after a brief fall to the short term moving averages. Though this index has been a out-performer vis-a-vis the Nifty 50, the edge is clearly getting blunt as the composite scrips succumb to profit taking pressures. Only a sustained trade above the 3000 levels will see a trend reversal and a bullish outlook return to this index.

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 index is trading at the 6 month highs and shows signs of consolidation as the momentum is flagging. The outlook will remain bullish as long as the 10,600 remain un-violated. The upsides may see the 10770 - 10800 being tested.

Your call of action - this is a pure academic study.

Ashok Leyland I Aurobindo Pharma I Canara Bank I Cipla I Dabur Inds I ITC I ONGC I Tata Chem I Tisco I Wockhardt I BSE Sensex I Nifty I CNX-IT I Dow Jones I Nasdaq I FTSE I Top I Close window I Print page

Nasdaq - this technology index is out performing the Dow Jones index and the short term support is at the 2130 levels. As long as the 2100 levels are not violated, the outlook will remain positive. Upsides will see minor resistance at the 2198 levels and 2220 level will be a formidable hurdle. The outlook remains positive.

Your call of action - this is a pure academic study.

FTSE - this UK index is trading at 3 year highs and is likely to witness support at the 5140 levels. As long as this level is not violated, expect the uptrend to remain intact. Minor resistance at the 5285 will be seen and above this level, the upmove maybe accelerated.

Your call of action - this is a pure academic study.

Trading tips for the week

The put / call ratio is climbing and is currently at the 0.37 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative increase. The FII investments are continuing steadily.
The index heavy-weights are showing strength again. This in turn will boost the indices and cause a feel good factor. The only worry is that this upbeat sentiment should continue in the face of terror attacks and negative newsflow.
The impeding expiry of the July series will see offloading and higher volatility in the near term.
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.