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 since a fortnight as a strong buy and has performed as per our expectations. The scrip is trending higher with support coming on a long term 3 year old trendline. Technical traders will note the higher tops and bottoms formation of late and the oscillators in confirmation of the upmove. The relative is higher than the Nifty at 125 ( where 100 = base ) and still rising. Traded volumes are perking up too and that is an additional positive. Currently, the scrip trades at it's all time highs and that indicates extreme strength. We recommend a buy for the patient long term investor.

Bharat Elect - this scrip has been one of the most prolific recommendations and has also performed well for patient traders. The noteworthy feature about this chart pattern is the trendline support as indicated at the 725 levels. A secondary trendline ( marked as a dotted line ) offers very strong support at the 690 - 695 levels. A very high relative strength of 214 vis-a-vis the Nifty ( where 100 = base ) is another positive indicator. The oscillators are pointing towards an optimistic undertone and poor volumes remain the only concern. The fact that the scrip trades at it's lifetime highs is a positive and part of the reason for poor volumes. We recommend a buy for the patient / disciplined traders / investors.

BHEL - another scrip from us that finds frequent mention in this edition. The stock is showing amazing relative strength of 514 vis-a-vis the Nifty ( where 100 = base ) and is making a classic higher tops and bottoms formation. The traded volumes are shrinking at the lifetime high levels that the scrip currently trades at and the oscillators are signaling a consolidation. A breakout above the 885 levels with higher volumes and increase in open interest will be a conclusive buy trigger.

HDFC - This scrip was recommended at near 800 levels and has been a laggard from our recommendations. The stock is now showing signs of life and we expect the previous top to be surpassed if the 780 levels are consistently surpassed with higher volumes. The high relative strength of 288 vis-a-vis the Nifty has actually risen in the last quarter and any upmove in the broader markets will see a significant upside in this institutional favourite. We recommend a buy for the patient investors.

I Flex - This mid rung software scrip is for the adventurous traders and investors. The scrip is moving out of a range and making higher tops and bottoms. The recent bullishness in the Nasdaq is likely to see action percolating to the domestic technology counters and under-performing second and third rung counters may see increased activity. Higher traded volumes and a breakout on the oscillators is confirming the uptrend. The scrip already has a higher than average relative strength of 140 vis-a-vis the Nifty and we recommend a higher risk buy.

Infosys - this scrip is likely to lead the technology pack from the front in the event of an upmove in the sector / broader markets. That the US $ has temporarily managed to halt the slide and the Chinese Yuan may be revalued, are another set of positive triggers. Frontline technology counters like Hewlett Packard have done well in the USA and the outlook appears upbeat. That is likely to have a rub-off on domestic scrips also. Chartically speaking, the scrip has signaled a breakout above the 2100 levels and is making a higher tops and bottoms formation and is likely to remain firm as long as the 2100 levels are not violated downwards on a consistent basis. We recommend a buy on small / medium lots.

ITC - This scrip has been another star performer from our recommendations in this quarter and is now trading at lifetime highs. Technical players may note the high relative strength of 318 vis-a-vis the Nifty ( where 100 = base ) and the continous rising tops and bottoms formation on the weekly charts. The oscillators are confirming the uptrend and the traded volumes remain steady / higher. We recommend a hold on existing long positions and buying on declines.

Mah & Mah - this scrip has seen a major consolidatory fall from the 565 levels to the sub 440 mark. Of late the scrip has started making rising tops and bottoms formation and the oscillators are in a buy mode. A sustained close above the 480 levels will be a conclusive buy trigger for the bulls. The announcement of a normal monsoon will be an additional trigger for the upmove. We recommend a buy for investors.

Reliance Inds - this scrip is oscillating in a downward sloping channel and has been responsible for dragging the indices lower. Had it not been for weakness on this counter, we feel the indices would have closed higher on a w-o-w basis. Since a closing has been conclusively below the 525 levels, we feel the scrip has the potential to test fresh lows. The wildcard being the media announcement that the Ambani brothers are close to settling their feud. Since a lower bottom formation has been signaled, we recommend a very high risk approach of short selling the scrip - but on rallies.

Satyam Comp - this frontline technology scrip has been rallying on rising tops and bottoms formation in a text book style bullishness. The oscillators are signaling a bullish outlook and the scrip has cleared a critical short term congestion level. We recommend a buy for the momentum players with a high risk appetite.

SBI - this PSU banking major is in an upswing and the move is supported well by the oscillators. The higher traded volumes imbibe confidence and the impeding expiry of the May f&o series suggests a short covering bias. That is likely to drive prices higher and provide a trading opportunity to the short term / high risk players. We recommend a speculative buy on the counter.

BSE Sensex - the Sensex has broken out of the bearish channel and is poised to hit higher levels provided the 6538 levels are surpassed convincingly. A fresh upmove by 2 % is not ruled out. Support exists at the 6400 levels and we feel a bullish bias be maintained for now.

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

Nifty 50 - The Nifty is appearing congested at the current levels and needs to break out above the 2004 / 2014 levels to witness the next target at the 2036 mark. On the lower side expect support at the 1966 levels. Only a breakout / breakdown beyond these levels will signal a trend determination move. We are optimistic for now.

Your call of action - Buy the Nifty June futures only after the spot convincingly closes above the 2004 levels. THe immediate target will be the 2014 levels, above which exhaustion at the 2035 levels. Trade small lots only.

CNX IT - this Index may out-perform the Nifty in the coming 5 sessions as the component stocks are witnessing a run upwards.A clear breakout above the 2700 levels are a welcome sign and 2800 - 2815 are likely targets in a conducive market scenario in the coming 5 - 10 days.

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 index has hit a new high after April 12 2005. The bearish channel has been surpassed and the oscillators are supporting the rally. We feel the 10330 levels are a critical support area and the 10525 levels are a short term target, beyond which the 10580 levels are achiveable.

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

Bajaj Auto I BEL I BHEL I HDFC I I-FLEX I Infosys I ITC I Mah & Mah I Reliance Inds I Satyam Comp I SBI 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 laden index is showing strength like the Dow Jones and is above the 2035 resistance mark. The 2005 remains a good support and the 2084 - 2095 levels are a target in the coming week, if the markets remain bullish.

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

Bajaj Auto I BEL I BHEL I HDFC I I-FLEX I Infosys I ITC I Mah & Mah I Reliance Inds I Satyam Comp I SBI 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 near it's congestion at the 5000 mark and the rally so far has been strong. Support is expected at the 4935 and resistance at the 5040 levels.

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

Bajaj Auto I BEL I BHEL I HDFC I I-FLEX I Infosys I ITC I Mah & Mah I Reliance Inds I Satyam Comp I SBI 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 0.44 : 1 levels and the outstanding positions in the derivatives segment have shown a qualitative appreciation. 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. As long as the Nifty remains below the 2014 levels in spot, resistance will continue.
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.