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 scrip has been a frequent recommendation from us and has been a consistent performer for the patient and disciplined traders. Chartically speaking a close above the 142 is the conclusive trigger for a confirmed buy for the traders whereas investors may buy even at current levels. The directional movement oscillator shows a continued uptrend and the traded volumes are also rising. The open interest in the f&o segment shows a good increase and the stock is likely to remain a market out-performer.

Ashok Leyland - this scrip was recommended as a potential buy last week subject to a confirmatory breakout above the 26 levels. That recommendation still holds good as the chart shows a rising bottoms formation within the downward sloping channel. The tops are truncated at the 26 levels and need to be surpassed effectively. The oscillators seem to indicate a scrip under accumulation and a breakout on the price graph will signal positive divergence. We recommend a buy on a breakout.

Ballarpur - this scrip has also been one of our strong recommendations and we reinforce our bullish guidance. Technical traders may note the higher tops and bottoms formation and the positive signal from the oscillators. Traded volumes are buoyant and a consistent close above the 122 levels will be a confirmation of an uptrend. The directional indicator points towards a bullish undertone. We recommend a deeper stop loss as compared to the previous week. A target of 140 - 142 is likely.

Century Text - this textile play was another early recommendation from us that performed well. The scrip is in a major uptrend and the traded volumes are improving since the last 6 months. The oscillators are signalling a slight flagging in the upward momentum as the scrip finds resistance on the upside at the 270 levels. A breakout will see an accelerated upmove into uncharted territory. We recommend a buy.

CESC - this scrip has been another veteran recommendation from us since the 125 - 130 levels and has seen a Rs 100 appreciation thereafter. This is an aggressive re-structuring case in the power sector and a further upmove is very likely. The directional movement oscillator points towards further rallies and a consistent close above the 200 mark will see it testing the 250 levels. Buying is recommended.

Colgate - this FMCG MNC has been on a roll and a market out-performer. The oscillators and traded volumes indicate a strong buying momentum on the counter as the scrip is being lapped up by retail and institutional players alike. The 200 level is turning out to be a strong base and as long as this level is not violated, the outlook remains positive. We recommend a buy on declines.

Dabur - this recent recommendation has performed exemplarily and lived up to our expectations. With a high relative strength of 249 vis-a-vis the Nifty ( where 100 = base ), this is a strong market out-performer. The oscillators are indicating a prevalent bullish trend and is in the second leg of the upmove with higher volumes. We foresee a target of 155 in the short term in a conducive market scenario.

GNFC - this fertiliser major is in a bull grip as the chart indicates a rising tops and bottoms formation on the weekly chart. The oscillators are pointing towards a bullish undertone and the upmove is likely to see the scrip testing the 3 figure mark in the near term. We recommend a buy for the higher risk appetite players in small lots.

ITC - this tobacco - hotels - fmcg play has been the star performer from our recommendations and performed exceedingly well in the last quarter. The relative strength continues to rally and the momentum / trend oscillators are in confirmation of the upmove. We feel a short term target of 1660 and medium / long term target of 1785 is justified - as advocated last week. Buying is recommended on all declines.

Reliance Inds - This scrip is in the limelight again and this time for the positive reasons. A settlement between the feuding brothers will be a positive trigger for the counter and so will the NELP V on July 02. As long as the scrip remains above the 545 levels, expect the bullishness to persist. This level corresponds with an inverted head and shoulder neckline that was formed in March - April 2005. The scrip is trading above the bearish channel and is likely to test the 577 mark as long as it remains above the 555 levels. Speculative buying is recommended on the counter.

SBI - this PSU banking major has been a volatile mover in the last quarter and tested the patience of many a trader - novice and veteran alike. We feel the larger uptrend remains intact and the second leg of the upmove that the scrip is currently into, will see the 709 levels in the short / medium term and once the previous top of 750 is crossed, the next long term target is 900 + in a conducive market scenario over a 24 month time frame. The scrip has been a market out-performer since Nov 2002 in terms or higher than average relative strength which is currently at the 136 vis-a-vis the Nifty ( where 100 = base ). We recommend a buy for the patient and disciplined traders / investors.

Tata Tea - this scrip was recommended last week and profits were book successfully though prematurely. The chart pattern suggests a build-up of upward momentum as the higher tops and bottoms formation continues unabated. The 30 WMA acts as a rough and ready strong support and the oscillators are in complete agreement wit the bullish price graph. We recommend a buy for the patient trader / investor.

BSE Sensex - this index has encountered multiple resistance at the 6775 levels and needs to trade consistently above this level with higher volumes. Support at the downside will be seen at the 6640 levels in the coming days and a breakout will determine the near term trend in the market.

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

Nifty 50 - this index is also facing resistance at the 2098 levels and a breakout above this level will take it to the 2108 / 2122 levels. Support at lower levels will be seen at the 2063 / 2077 levels in the near term. The risk reward ratio is evenly poised and we do not suggest buying unless a conclusive breakout is achieved.

CNX IT - this index is making higher tops on the daily charts and the index is headed towards the previous top of 3000 levels where resistance is likely to be significant. The recent low of 2462 has been lower than the previous low and that is sign of minor caution. Only a consistent trade above the 3000 mark will see bullishness return sustainably. The 2840 levels will be a benchmark support 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 - the 10600 levels are proving to be a strong hurdle for the Dow and the index is currently trading above the 200 day SMA placed at the 10420 levels. As long as this level is not violated, expect bullishness. A drop below this level will see 10310.

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

Arvind Mills I Ashok Leyland I Ballarpur I Century Text I CESC I Colgate I Dabur I GNFC I ITC I Reliance Inds I SBI I Tata Tea 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 broken out above the bearish channel and encountered resistance at the 2100 levels as forecast last week. Support at the lower end will be seen at the 2035 - 2042 band below which, the outlook will be weak.

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

FTSE - this Index is out performing the US indices and needs to trade above the 5000 mark to gain upward momentum. The support is likely to be seen at the 4915 in the absolute near term. This index is likely to perform better than the US market indices in the coming week in relative terms.

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 0.33 : 1 levels and the outstanding positions in the derivatives segment have shown a quantum jump. The FII investments are turning positive after a long hiatus.
The current week is crucial for the markets as the indices attempt to surpass multiple tops.
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.
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.