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 has been frequently recommended in this edition and was last recommended in editions dtd Nov 07 & 12. Click here to view the previous editions. The scrip is a strong market out-performer and has a relative strength of over 350 ( 100 = base ). The scrip is trading at a low resistance area and has seen a new lifetime high at 679 on an intraday basis. The oscillators point towards a strong undertone and we have recommended a buy at 580 levels, which is deeply in the money. Patient investors may hold and add on declines. Traders are advised to buy afresh in a bullish market, once the previous top is surpassed.

Dr Reddy - This pharmaceuticals heavy-weight was recommended at the 774 levels and has been covered in editions Dtd Nov 07, 14 & 21. Click here to view the previous editions. The scrip was accurately advocated as making a rounding bottoms formations and was predicted to enter a new bullish zone as the short term congestion zone would be surpassed. The scrip has managed a close above the 800 benchmark and is likely to witness accelerated upmoves as the uncertainty in the market is likely to benefit the pharmaceuticals sector. We recommend a buy for the patient investor / trader.

Mahindra & Mahindra - This scrip was recommended recently vide our edition dtd Nov 14 and has appreciated in line with our expectations. Click here to view the previous editions. Barring the worries of rising crude oil prices, this stock should do well and test the psychological threshold of 500 levels. The scrip is a market out-performer and the relative strength is over twice that of the Sensex. The oscillators are pointing towards a rounding bottom formation and the scrip has attracted good volumes. The scrip has broken out of a downward sloping channel after a good run upwards. This formation is called a flag formation and is a measuring move. If all goes well, a 10 - 15 % upmove is not ruled out on this counter. We recommend a buy on the counter.

MTNL - this scrip was recommended in our previous edition dtd Nov 14 at a confirmatory breakout above 145 and a target of 155 was advocated. Click here to view the previous editions. That target has been successfully achieved and the scrip is continuing to show signs of strength on volumes. The scrip is in the news on the telecom sector being re-rated and the possible merger with BSNL. The scrip attracts high volumes and open interest ( OI ) in the f&o segment. We recommend a trading buy for the aggressive, higher risk appetite traders.

Raymond Ltd - this textiles major was recommended in the Nov 21 edition and has flared up to reward traders / investors alike. Click here to view the previous editions. The textile sector is being re-rated upwards and the large players are expected to have significant opportunities after 2005 demise of the quota system. Raymonds will be in the forefront of the export brigade. The stock is a market out-performer with high relative strength and we recommend a hold on existing positions with a buy on declines for the discerning delivery investor.

Reliance Industries - this scrip has been in the eye of the storm since the family split became public knowledge. Last week we had advocated vide our edition Dtd Nov 21 that a close below 520 would see a rapid drop to the 510 levels and short selling was advocated. Click here to view the previous editions. That forecast has been proved accurate. The scrip is showing a fall from the downward sloping channel and the oscillators are showing a weakness on the charts. Since this scrip is likely to be completely news driven, trades on this counter are for the strong hearted only. We recommend a sell on major advances provided no reports of a reconciliation are confirmed.

TCS - this software major has been recommended by us frequently vide our daily editions and SMS notifications. This edition recommended the stock in the Nov 14 edition. Click here to view the previous editions. The technicals of this scrip are strong and the 13 day SMA has proved to be a strong support for the counter. The next support is at the 1175 levels ( 30 day SMA ) and much will depend on the weakness in the US $ for sentiments on technology counters. This scrip will out-perform Infosys in the near term as the business model of this scrip is relatively more insulated against US $ fluctuations. We recommend a buy on major declines.

Tata Tea - this scrip is showing signs of a breakout above a congestion level as the higher tops and bottoms formation is likely to take the price line above the 448 levels on a closing basis, which will be a confirmatory buy signal. The oscillators are showing signs of strength and the moving averages are in a classic bullish mode. We recommend a buy on a confirmed breakout in small lots.

BSE Sensex - The sensex has managed a close above the bullish channel and has also tested the previous high in the bargain. The immediate support will be seen at the 5975 levels below which further falls to the 5890 are possible. The overall outlook remains positive. Should the 6085 levels be surpassed, expect the 6142 to be a possibility.

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 slightly below the bullish channel but is showing signs of strength as the index is continuing the rising tops / bottoms formations. A breakout above the 1914 levels will see a further 1.5 - 2 % upsides in the coming week. Watch the 1880 levels for critical short term support and maintain a bullish outlook for the markets.

Your call of action - We advocate a buy on declines to the 1890 levels with a stop loss at the 1880 levels in small / medium lots, in the December futures. Options players may buy the December 1920 calls at a suggested premium of Rs 22. Income players can write the December 1800 puts at a premium of Rs 9 and above or to be on the safer side, write the 1780 December puts at a premium of Rs 5.50 and above.

CNX IT - This technology index is showing signs of bullishness as the index makes a classic higher tops and bottoms formation. The 13 day SMA is a key support as the index has not closed below this support on more than 2 downswings since July 04. The main trigger will be the weakness in the US $ as the technology companies undergo anxieties on the earnings front. The 30 day SMA is a very strong support at the 2750 where significant support is likely. We feel discerning traders may start buying this index in minimal lots below the 13 day SMA but between the 30 day SMA levels with a view to average lower with a patient view.

Your call of action - Buy the CNX IT at the 2800 levels and average lower till the 2760 levels. Hold with a stop loss at the 2740 levels. Expect profit taking at the 2950 - 2975 levels in a conducive market in the medium term.

Dow Jones Industrial Average - Last week we had advocated that the Dow had broken out of a channel which is also a flag formation. The 10640 levels will be an immediate resistance, above which the 10800 levels maybe likely. Downside support exists at the 10390 levels in the coming week. The US markets are gearing up for Christmas and the shopping season will determine the consumer buying preferences and state of the US economy.

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 Mah & Mah I MTNL I Raymond I Reliance Inds I TCS 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 technology laden Nasdaq is showing similar signs of a breakout like the Dow Jones above and is likely to find support at the 2034 levels on the downside. Resistance at the higher levels is likely at the 2165 levels. A breakout above the 2115 levels will be a positive trigger for the Nasdaq.

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 Mah & Mah I MTNL I Raymond I Reliance Inds I TCS 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 - The FTSE is under performing the USA markets and is likely to consolidate as long as a breakout above the 4820 levels are not sustained. Lower levels will see support at the 4650 levels and the FTSE should not fall below this level if the outlook is to remain bullish.

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 Mah & Mah I MTNL I Raymond I Reliance Inds I TCS 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 easing and is currently at the 0.23 : 1 levels and the outstanding positions in the derivatives segment have shown a smaller fall after expiry. The FII investments are continuing steadily. These are signs of comfort for the bulls.
There is buying at lower levels in stock futures. That indicates a bullish approach as long positions in individual stocks is 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.