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 was recommended last week and has shown decent appreciation. As we advocated last week, the scrip has managed to close above the 1125 levels convincingly and entered a lower resistance area. The oscillators have signalled a build-up of upward momentum and the simple moving averages ( SMA's) are in a bullish mode. Technical traders may note the higher relative strength vis-a-vis the Nifty. We recommend a buy for the patient long term investors / traders.

BHEL - this PSU electricals major is in a major uptrend and as we had advocated last week, the 838 levels are a critical short term resistance area. The scrip has been unable to close above that level convincingly. The high relative strength of 493 vis-a-vis the Nifty ( where 100 = base ) is confidence inspiring as the scrip moves up on the weekly charts. The oscillators, particularly the directional movement oscillator points towards a bullish undertone, however, a breakout upwards would a welcome confirmation of the same. We recommend a buy for the patient / disciplined investor.

Ballarpur Inds - this new addition to the f&o list is in an upward cycle and currently trades near the Aug 1996 levels ( 9 year highs ). The industry and this stock are being re-rated upwards and we expect the scrip to rise in the coming months. The scrip makes higher tops and bottoms formation and is in a classic uptrend. The SMA's are rallying and the oscillators are confirming a bullish uptrend. The directional indicator points towards a bullish outlook and we recommend a buy for the higher risk appetite and patient investor.

ITC Ltd - this scrip has been our most frequent recommendation and also the star performer. The scrip has closed above the 1460 levels and that makes it comfortably wedged in a fast upmoving groove. The oscillators are pointing towards a bullishness and the directional indicator is pointing towards a continued upward momentum. The high relative strength makes this a strong market out-performer and buying is recommended for the patient and discerning investor / trader.

Raymond Ltd - this textiles major is in in a major uptrend and was recommended frequently about a quarter ago at 300 levels. The scrip has appreciated 10 % since then and promises a fresh upmove. It maybe noted that the counter has a reliable support at the 30 week SMA which is poised currently at the 305 levels. The scrip makes a consistent higher tops and bottoms formation and a close above the 350 mark will take it into an accelerated upmove. The directional movement indicator is pointing towards a bullish outlook. We recommend a buy for the patient and disciplined investor.

Tata Motors - this scrip has been moving in a converging pattern ( short term wedge ) and witnessing lower traded volumes. A decisive move will be witnessed once the scrip breakout / breaksdown beyond the trendlines. The oscillators are pointing towards a build-up on the upsides, though volumes do not confirm a sustainable upmove. The 441 & 448 levels are a critical threshold levels that this scrip must surpass if the uptrend is to continue. We recommend a trading / speculative strategy on this counter.

BSE Sensex - the Sensex is currently consolidating with a support at the 6380 - 6400 levels and needs to close above the 6528 levels to confirm the uptrend. The fast momentum oscillator ( stochastics ) is pointing towards a fall from the over bought levels and implies a pressure on the upsides in the absolute short term. A directional call will be possible once the 6380 / 6528 levels are overcome in either direction.

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

Nifty 50 - the Nifty is exhibiting similar patterns like the Sensex and is likely to get support at the 1966 levels and resistance at the 2016 mark. Though the slower oscillators are pointing towards a continued uptrend, the Nifty needs to close above the 2016 mark, wherein a fresh rally to the 2036 levels is likely. On the flip side, a fall below the 1966 levels may take the Nifty to the 1934 levels.

Your call of action - Trade long only once the 2004 levels are surpassed convincingly with high volumes and expect the 2016 levels as the first target objective. Above a convincing close over this level, expect the 2036 levels to be a possibility.

CNX IT - The CNCX IT index has under-performed the broader markets as the rally has been conspicious by it's absence on this benchmark. We feel the upsides are likely to see 2690 levels and falls may see support emanating at the 2575 levels.

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 has fallen for four days out of five last week and has managed to close above the channel top by a narrow margin. A sustained closing below the 10155 levels will see the index testing the 10,000 mark and the upsides are likely to be capped at the 10290 levels.

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

Bajaj Auto I BHEL I Ballarpur Inds I ITC I Raymond I Telco 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 higher relative strength as compared to the Dow Jones and is likely to appreciate to the 2000 levels in a conducive market scenario. The 1950 levels will be a crucial threshold support in the near term. It would interesting to see whether the 2000 levels are surpassed on a convincingly consistent basis. The domestic technology scrips are likely to take their cues from the Nasdaq.

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

Bajaj Auto I BHEL I Ballarpur Inds I ITC I Raymond I Telco 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 making an interesting chart pattern as the index gyrates within the the bearish channel and a fall below the 4848 levels will see accelerated weakness. A rally past the 4920 is required to confirm a short term uptrend.

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

Bajaj Auto I BHEL I Ballarpur Inds I ITC I Raymond I Telco 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 0.40 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative improvement. 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 a rally this week will signal a third week of bullishness if the indices close higher on a week-on-week basis.
The impeding expiry of the May 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.