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 scrip is in the limelight as it makes a new all time high. We have been recommending this scrip since it traded below 1100 levels vide our earlier editions dtd Jan 01, Mar 15 & 13, May 07, 15, 21 & 28 and June 18, 2005. Click here to view the previous recommendations. Having performed as per our expectations, the original target of 1500 + is re-affirmed. Technical traders may note the rising tops and bottoms and the oscillators are in consonance with the price graph. The directional oscillator is pointing towards a build up of upward momentum and we recommend a hold on existing longs and a buy on declines.

BPCL - this scrip has been recommended in the daily editions / SMS and has been a reasonably profitable proposition. earlier recommendations were dtd Jan 16, Mar 13, April 03 & 10 and June 19, 2005. Click here to view the previous recommendations. The prospects of this counter are directly and inversely linked to the international crude prices. Now that crude has crossed the previous top, we expect the crude prices to scale the 63.50 - 64 $ on the Nymex in the short / medium term. There will be a corresponding pressure on this scrip. A consistent trade below the 350 levels will lead the scrip to new lows. Traded volumes will determine the extent and rapidity of the fall. We recommend a short sale on the counter subject to a confirmatory trigger.

Century Text - This scrip has been a prolific recommendation from our side and has performed very well. Previous recommendations were dtd April 30 and June 05, 2005. Click here to view the previous recommendations. The counter has indicated a breakout above the 260 mark ( July 1996 top ). For the uptrend to sustain itself, the scrip must trade consistently above the 250 mark. Making a textbook style saucer ( rounding bottom formation ), the immediate resistance will be the 298 mark, above which the upmove is likely to be accelerated. The directional indicator is showing signs of a build up of upward momentum and the long term trend of the scrip is turning positive. We recommend a buy for the patient investor.

CESC - this scrip was recommended recently and has performed well in the short span of time. Previous recommendation were dtd Feb 06, Mar 20 and June 05 & 11, 2005. Click here to view the previous recommendations. The scrip is making higher tops and bottoms and the rally is well supported by oscillators. The directional indicator is signalling a build up of upward momentum and a consistent close above the 225 levels will take the scrip into a 10 year high in a near perfect rounding bottom formation. The scrip is in the second leg of the upmove which is likely to see the 280 + levels in the short / medium term.

GSK Pharma - this scrip has been recommended earlier vide our edition dtd. Jan 16 & 30, 2005. Click here to view the previous recommendations. This scrip is a major pharmaceutical story in the making and a multiple top exists at the 800 mark. A clear breakout above this level will see a new trading zone as the scrip clears a critical resistance spanning 7 years. Technical traders may note the rising bottoms, though the tops are capped at the 800 mark. A breakout will be a major trigger and we recommend a buy.

HPCL - this scrip is recommended as a short on the same grounds as BPCL above. Recommended repeatedly via daily editions and SMS, this scrip has proved to be a reasonably profitable proposition. Previous recommendations were dtd Jan 16, Mar 13 & 26 and April 03 & 10, 2005. Click here to view the previous recommendations. The momentum oscillator shows an oversold reading and shorting maybe contemplated on advances.

ITC - this scrip has been the most frequent and also the most profitable recommendation from us in recent times. Earlier recommendations were dtd Feb 06 & 27, Mar 05, 13 & 27, April 03, 10, 24 & 30, May 15, 22 & 29 and June 05, 11 & 18, 2005. Click here to view the previous recommendations. The scrip enters a new zone above the 1600 levels and the high relative strength above the 277 levels vis-s-vis the Nifty ( where 100 = base ) is confidence inspiring. The oscillators are confirming the bullish trend and we feel a price of 118 - 121 is justified in the post split & ex bonus basis. Buying is recommended on all major declines.

Jet Airways - this airline major is moving in a downtrend as the daily chart below indicates. This is the first time we are initiating coverage on this counter as the data available is insufficient to make long term forecasts. It maybe noted that the prospects of this counter are dependent on the international crude prices and the movement is likely to be that of selling at higher levels. We recommend a sell on advances.

ONGC - this is another recent recommendation via sms / daily edition that clicked profitably in the short term. This scrip is also directly linked for short term trend determination to the international crude prices ( however, prices will follow the crude prices rather than react negatively as in the case of HPCL, BPCL & Jet airways ). Technical traders may note how the scrip is making higher bottoms and is well supported by oscillators. The higher than average relative strength of 175 levels vis-a-vis the Nifty ( where 100 = base ) is confidence inspiring. The directional indicator is pointing towards a build-up of upward momentum and a breakout above the 940 levels is the confirmatory signal for the bulls to go long. We recommend a buy for the patient investor / traders.

BSE Sensex - the Sensex is in a lifetime high zone where no previous recorded resistance is known. While the pattern is suggesting a higher tops and bottoms formation and the oscillators are indicating a confirmation of the same, we feel absolute caution is advocated at higher levels as the volatility is likely to be extremely high. The resistance is likely to be seen at the 7224 and only a conclusive close above this level will trigger off the next upmove. On the lower end, support is likely at the 7023 & 6950 levels.

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

Nifty 50 - This index has been moving in a predictable " V " formation which we have been plotting for over a fortnight for our investors. The index is within striking distance of testing the upper end of the bullish channel trend-line and is likely to encounter resistance there. The level would be 2218. A possibility of 2234 exists if the upmove extends, but selling would be likely at the 2234 levels, which will be serious. On the lower end, support exists at the 2151 and then the 2128 levels. The oscillators are indicating a bullish outlook and barring routine profit sales, we do not expect severe downsides.

Your call of action - We advocate liquidating long positions on the Nifty above the 2200 in a staggered fashion and converting to cash by 2230 in cash those levels are achieved. Sell the June 2250 calls in small / minimum lots at a suggested premium of Rs 4 - 5.

CNX IT - as advocated last week, the CNX IT index is likely to remain bullish provided it stays above the 3000 threshold. The 3000 levels are a multiple top on the bar chart and high volume buying is needed to keep this index above the trend determining level. On the lower side, we expect strong support at the 2855 levels in the near term.

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

Dow Jones Industrial Average - As advocated earlier, the 10650 levels have proved to be a strong resistance for this NYSE benchmark. Support at lower side will be seen at the 10,090 levels and the 10650 will now be a major resistance and threshold level to cross.

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

Bajaj Auto I BPCL I Century Text I CESC I GSK Pharma I HPCL I ITC I Jet Airways I ONGC 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 new economy index has encountered resistance as forecast earlier and the 2110 levels will be the immediate upside hurdle. Support base is seen at the 2010 - 2015 levels and the outlook is that of caution. This index will have a direct impact on the domestic software scrips.

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

Bajaj Auto I BPCL I Century Text I CESC I GSK Pharma I HPCL I ITC I Jet Airways I ONGC 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 is showing higher relative strength as compared to the US indices. Though the high crude prices have hit this index as well, we expect this index to fare relatively better than the US indices. Support at lower side will be seen at the 4975 levels and the 5150 is a strong resistance area.

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

Bajaj Auto I BPCL I Century Text I CESC I GSK Pharma I HPCL I ITC I Jet Airways I ONGC 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 climbing and is currently at the 0.37 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative improvement. The FII investments are continuing steadily.
There is offloading at higher levels in mid-cap scrips which explains the negative market breadth. 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 crude prices have breached the US $ 60 mark and the Fed is likely to announce the state of US economy on June 30. That will determine short term trends in the markets.
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.
The impeding expiry of the June 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.