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.

Bharat Electronics - this scrip is a strong market out-performer and a high relative strength counter, making it a sound investment in a trending market. We have recommended this counter earlier and the scrip has been living up to bullish expectations. A breakout above the 582 levels and a sustained closing above that level will see the scrip in an accelerated upmove. We recommend a buy on that breakout.

Dr Reddy - this pharmaceuticals major is exhibiting a rounding bottoms formation and is gaining strength on the oscillators. We recommended this scrip last week and re-affirm our buy / hold on the counter. Trading above it's 30 week SMA, the scrip is likely to gain upward momentum as the 800 levels are surpassed with higher volumes.

Hero Honda - this two wheeler major is showing signs of revival on the short term charts. The positive trigger on the counter is the hope of lower crude prices which will curb inflationary pressure, in turn boosting sales. The scrip has surpassed the downward sloping channel and is making an attempt to surpass the resistance provided by the 13 & 30 day SMA's. Should the scrip manage a breakout above this level with higher volumes, a buy decision would be confirmed.

Mah & Mah - this passenger / tractor / utility vehicles major is likely to be a major beneficiary of the lower inflation scenario ( which is expected if oil prices ease lower ) and the same is reflected on the weekly charts. The price graph is showing signs of a breakout above the downward channel and has achieved a close above the moving averages. A breakout above the 460 levels will see an accelerated upmove. The oscillators also show increasing strength and the same will be confirmed on a sustained higher closing.

MTNL - This PSU telecom scrip is in the news for a couple of weeks due to the expectations of a merger with BSNL. The scrip has been clocking high volumes and witnessing a huge buildup of open interest as the players ramp up trading positions. The scrip has indicated a breakout from a channel formation and the same has been accompanied by higher volumes. The outlook has improved and the scrip is a buy for the highly adventurous trader as the news flow is likely to determine the short term trends on the counter.

Ranbaxy - this pharmaceuticals major was recommended last week on declines as the adverse news flow was expected to cause a short term downside. The scrip has taken support at the 13 week SMA and risen higher, which is an indicator of a bullish undertone. The scrip needs to close above the 1125 levels for a few sessions to signal resumption of a bullish trend and a confirmation of the flag formation which will see 1220 + levels in the near / medium term.

TCS - this technology heavy-weight has been recommended by us since listing and was advocated to hit the 1200 + levels - which the scrip has achieved successfully. We raise the target to 1250 + levels in the short / medium term and recommend a buy on declines for the technology buffs. Note how the scrip is making higher tops and bottoms formations and has not managed to close below the short term SMA, which is a sign of strength. We recommend a buy on declines.

Tata Motors - this automobile major is showing signs of revival as the sales figures show a healthy rise. Expectations of lower inflation on the back of easing crude prices is likely to revive investor interest on the counter. The oscillators are showing a turn around in the sentiments. The scrip is attempting to surpass the 52 week SMA and once a close above this is managed, an accelerated upmove is likely to be seen. The momentum oscillators are showing a positive buildup of momentum.

Tisco - this steel major is in an uptrend again as the price graph attempts to surpass the previous top resistance. Any close above this level of 311 for 1 - 2 sessions with increased volumes will signal a breakout and a new trading zone. Low resistance will mean that the upmove is likely to be accelerated. The scrip is a high relative strength stock and a market out-performer. Buying above a breakout is recommended.

Tata Power - This power major is showing signs of strength as the scrip has managed to close above the 52 week SMA and the oscillators are showing a positive divergence and a buy is recommended on a confirmed breakout.

BSE Sensex - The sensex has managed to signal a clear breakout from the channel top and managed to close above it for 5 sessions. That is a bullish indicator. We expect a support floor at the 5920 levels in the coming week and a resistance at the 6100 - 6120 in a bullish market scenario.

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

Nifty 50 - The Nifty has made multiple attempts to close above the channel top and failed. A conclusive close above the 1882 is required to signal a conclusive buy. Support in the coming week is likely at the 1845 levels and resistance at the 1882 / 1894 then the 1908 levels. We maintain a bullish bias on the Index.

Your call of action - Buy the Nifty November futures above the 1882 levels and hold with a stop loss at the 1869 levels. Expect part profit booking at the 1894 levels and complete profit taking above the 1900 levels. Options players may buy the November 1880 calls at a suggested premium of Rs 18. Income players can sell the November 1820 puts at a suggested premium of Rs. 6.

CNX IT - this IT index is showing signs of fatigue at higher levels near the 2800 - 2815 as the technology stocks are witnessing profit taking at higher levels. The index displays strength as the higher tops and bottoms formation are still intact.

Your call of action - Support on the lower side is expected at the 2750 levels where buying can be contemplated by the patient traders. Momentum traders should buy only above the confirmed breakout above the 2850 levels.

Dow Jones Industrial Average - the Dow has signalled a breakout above it's downward sloping channel and surged past its SMA's which is a sign of bullishness. The oscillators are signalling strength and further upsides are not ruled out. Support exists at the 10245 levels and resistance will be seen at the 10670 levels in the week ahead.

Dow Jones - Weekly chart

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

Bharat Electronics I Dr Reddy I Hero Honda I Mah & Mah I MTNL I Ranbaxy I TCS I Telco I Tisco I Tata Power 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 making similar chart patterns as the Dow Jones average. That is a sign of strength as the oscillators are signalling a strength in the undertone. The support at lower levels exists at the 2000 levels and upsides may see the previous top being tested. The domestic technology stocks are likely to be influenced by the Nasdaq index.

Nasdaq - Weekly chart

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

Bharat Electronics I Dr Reddy I Hero Honda I Mah & Mah I MTNL I Ranbaxy I TCS I Telco I Tisco I Tata Power 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 signs of coming out above a congestion zone of 4750 levels and managing to close above it. The oscillators are supporting the upmove and the outlook appears positive. Support at lower levels will be seen at the 4665 levels and upsides may see 4890 / 4920 levels in a conducive market.

FTSE - Weekly chart

Your call of action - Since Indian investors are not allowed to trade in overseas markets, this is a pure academic study.

Bharat Electronics I Dr Reddy I Hero Honda I Mah & Mah I MTNL I Ranbaxy I TCS I Telco I Tisco I Tata Power 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 an upward build-up. The FII investments are continuing steadily.
There is buying at lower levels in stock futures. That indicates an optimistic approach.
The crude oil prices are down 5 % on a week-on-week basis and below the $ 50 / barrel mark for a fortnight. That is likely to comfort the bulls, and be the biggest trigger in the coming days.
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 past the psychological levels of 6000 & 1900 on the Sensex and Nifty respectively.
The impeding expiry of the November series will see offloading and higher volatility in the near term.
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.