| The market registered net gains during the week but the momentum slowed somewhat. The Nifty gained 1.36 per cent in closing at 4566 points and the Sensex was up by 1.92 per cent at 15565 points. The Defty was up 1.67 per cent as the rupee continued to shine. Both FIIs and mutual funds were massive net buyers. |
| Breadth signals were positive but not very strong. Most of the action was concentrated in the Sensex rather than the broader indices. The Nifty Junior was actually down 0.62 per cent and the BSE 500 was up 1.38 per cent underperforming the Sensex. Volumes were average, despite the strong institutional buying. |
| Outlook: The market is running into profit-booking and next week could see consolidation and range-trading between 4450 and 4650 with alternate bouts of profit-booking and buying. A big carryover at the derivatives settlement may drive the market up late in the week. Expect lots of intra-day volatility. |
| Rationale: The pattern suggests quite strongly that retail traders and probably operators are booking profits. There is resistance above 4550 and decent support at 4450. There is a lot of F&O open interest and that could translate into a big carryover. Naturally such a move will tend to be narrow with low volumes outside the F&O stock list. |
| Counter-view: The trend is obviously positive and the long-term trendline appears to be getting steeper if one looks at weekly charts of the Sensex and Nifty. Despite being in uncharted territory, the market may hit new highs again. A drop below 4450 would be triggered only by shockingly adverse results or some unpredictable global news-event. |
| Bulls & bears: Movements were stock-specific given the Q1 result flow. The winners included a couple of telecom stocks in Bharti and RComm but Idea Cellular saw a sell off on Friday. Other big winners included Bharti, Bhel, L&T, Reliance Industries, Tata Steel and a couple of surprises in NLC and PTC. |
| GMR Infrastructure appears to have weathered a sell off and looks set to rise again. DLF has gained quite substantially since listing and Unitech seemed to recover from a support |
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