Technical OutLook
Movements will be fast and small
Vijay Bhambwani
CEO, BSPLindia.com
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The year 2002 having gone by, there is a lot of expectation built around the new year. The markets have seen a revival in sentiments and the higher turnover seems to indicate that retail participation seems to be returning to the markets.
The falling tops and bottoms formation which was seen since May 2000 has now been broken, at least on the falling bottoms count. The bottom made in July & November 2002 was significantly higher than the September 2001 bottom. Moreover, the Nifty is trading above its downward sloping channel of 30-month duration and in the bargain has also surpassed the 52- week SMA. These are signs of strength and hold promise that 2003 will be a better time for the investing community than last year.
Where an absolute confirmation is concerned, I would like to see the 1206 previous top being surpassed and then the falling tops / bottoms formation would be conclusively broken and the long term trend of the markets reversed.
The oscillators are largely supportive of the rally and imbibe bullish confidence. Once the Nifty 1206 levels are surpassed, I would expect the markets to stabilise and consolidate for a few months before a fresh move starts. The technology sector is likely to regain its lost ground led by frontline counters like Infosys, Wipro and Satyam Computer.
Among old economy stocks, Telco, Tisco, Reliance and Ranbaxy remain market out-performers with a high relative strength vis-