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 2 wheeler major has been recommended by us in the past as a market out-performer and a long term buy vide our earlier editions. Technical traders may note the long term trendline which is proving to be a strong support on the counter and volumes which are showing signs of picking up since three weeks. It is noteworthy that the scrip is nearing it's all time highs and is on the threshold of a breakout into a new trading zone. Resistance in that zone is unlikely to be significant. The oscillators are pointing towards a rising upward momentum, which needs to be confirmed by the price graph. The first resistance will be at the 1160 and then at the 1200 mark. As long as the scrip stays above the 1120 mark, expect bullishness.

BEL - This PSU electronics major has been a frequent recommendation in the recent past and has out-performed the markets by a wide margin. Technical buffs will note the high relative strength of 212 vis-a-vis the Nifty ( where 100 = base ). Moving on an ascending trendline, the scrip is exhibiting a rising tops and bottoms formation. The oscillators remain in a buy mode. Any breakout above the 800 levels will be the trigger that the bulls have been waiting for. The scrip will move into a new trading zone with little / no resistance. Patient investors / traders are advocated to buy this scrip on all declines.

BHEL - this is another high relative strength counter which is out-performing the indices with a wide margin. The scrip needs to breakout above the 832 congestion levels to signal another uptrend that will take it to the 860 levels. The daily chart shows the oscillators in a buy mode and breakout above the 832 levels with traded volumes over 2 lacs ( on the NSE ) will be a confirmation of a buy decision.

HDFC - this institutional favourite has seen a period of consolidation and a steep fall from the 800 + levels to test the sub 700 mark. The numbers announced have been upto the mark and the scrip is finding it's feet again, with higher volumes. The 52 week SMA remains unviolated and the high relative strength of 220 levels imbibes bullish confidence. A breakout and consistent trade above the 765 levels will propel the scrip higher in an accelerated upmove that can take the counter past the 850 levels. We recommend a buy for the patient investor.

ITC - this scrip has been a prolific recommendation from our side and also proved to be a star performer. The scrip has appreciated from the 1280 levels around budget time to hit a new lifetime high at 1477. The high relative strength of 278 vis-a-vis the Nifty ( where 100 = base ) imbibes confidence and the scrip is in a constant rising tops and bottoms formation. The short term moving average is proving to be a major support and is a bullish indicator. The oscillators are in a buy mode. We recommend a buy for the patient investor / trader.

Kochi Refinery - this PSU refinery counter is exhibiting a turnaround formation on the daily charts and the rally is accompanied by higher volumes. The short tem moving average has crossed over the medium term SMA and the oscillators are confirming the upmove. A consistent trade above the 160 levels is required to signal a buy decision. A short term breakout above the congestion levels of 165 is a sign of strength. We recommend a buy in small lots only.

Reliance Inds - this scrip has been in the news recently and has the potential to swing the markets with itself due to the weightage it has on the benchmark indices. The last session has seen the counter attempting to surpass the 550 resistance levels and the same was accompanied y higher volumes. The erstwhile neckline of the head and shoulder pattern has been surpassed and as long as the scrip stays above the 547 levels, the outlook is positive. The momentum oscillators are pointing towards a possibility of a rally. We recommend a buy for the higher risk appetite traders.

Tata Tea - this Tata group FMCG major is in an uptrend and is making a higher tops and bottoms formation. The relative strength is rising and the entire FMCG sector is getting re-rated. We recommend a buy for the patient trader / investor on declines.

BSE Sensex - The BSE Sensex has signalled a breakout above it's short term bearish channel and the momentum oscillators support the upmove. The upmove has been on a gap up on Thursday and the 30 day SMA has been convincingly overcome. We feel the upsides may test the 6450 - 6466 levels in the coming days. Lower levels will see support emerging at the 6290 - 6310 levels.

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

Nifty 50 - The Nifty has closed at threshold level of the upper trend-line of the bearish channel. Though the previous top of 1974 has been surpassed convincingly, the channel remains intact. We feel any breakout of this channel will see 1988 levels and thereafter the 2005 - 2015 levels on the upsides. There is a likelihood of serious resistance there. The oscillators are supporting the upmove and the probability of a breakout is fair. Support is likely at lower levels of 1954 in the spot.

Your call of action - Buy the May futures only once the spot trades consistently above the 1988 levels and hold with a stop loss at the 1972 mark on the spot. Expect to book profits at the 2005 - 2010 levels on the spot. Income conscious players may sell the May 2100 calls at a suggested premium of Rs 7.50 and above in small lots only.

CNX IT - the CNX IT index is also rising in tandem with the other indices. A consistent rally will see 2725 levels in a bullish market scenario and ample support exists at the 2510 levels.

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 Dow has signaled a breakout from the bearish channel and is likely to derive support at the 10300 levels in the short term. Resistance on the upsides are likely at the 10400 levels. Only after a consistent trade above the 10400 mark, will the Dow make a fresh upmove.

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

Bajaj Auto I BEL I BHEL I HDFC I ITC I Kochi Refinery I Reliance Inds 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 is moving within the 5 month old channel and is making a rising tops and bottoms formation. The 30 day SMA has been surpassed and the likelihood of 1990 - 2000 levels is good. On lower levels, expect support at the 1944 levels in the near term.

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

Bajaj Auto I BEL I BHEL I HDFC I ITC I Kochi Refinery I Reliance Inds 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

FTSE - this index has seen a higher relative strength as compared to the US indices. The index has rallied for 4 consecutive days and is likely to test the 4950 - 4965 levels in the coming days. Support at lower levels is likely at the 4865 levels.

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

Bajaj Auto I BEL I BHEL I HDFC I ITC I Kochi Refinery I Reliance Inds 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

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 after being negative in April 2005.
There is buying at lower levels in stock futures. That indicates a bullish approach and long positions in individual stocks are 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 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.