| It was a bright start to the new year with indices hitting a new high despite thin trading in the first couple of sessions. The Nifty closed at 2914 points for a week-on-week gain of 2.73 per cent. |
| The Sensex closed at 9640.29 for a gain of 2.58 per cent. The Defty was up a disproportionate 3.6 per cent as the rupee strengthened sharply. |
| Breadth was average with advancing shares and declining shares being almost matched in numbers. Volumes picked up in the last three sessions after the new year opened with very low trading interest. |
| However trades were confined to big and medium stocks with zero activity recorded in many smaller shares. The broad BSE 500 recorded a gain of 3.21 per cent. |
| Outlook: The short-term is probably going to see range-trading with the indices moving between Nifty 2880-2925 (Sensex 9500-9680). A breakout in either direction with prices closing outside this range would establish a new short-term trend. In the medium-term, the market seems quite strong. The latest breakout suggests a minimum target of 4-5 per cent gains over the next 6 weeks. |
| Rationale: The range-trading appears to be a standard period of consolidation after a breakout accompanied by a fair amount of volume. The price-pattern is bullish in the medium-term and of course, in the long-term as well. |
| Counter-view: There is some negative divergence in momentum indicators such as the RSI which has not hit a new peak even as the indices have. There is also a narrowing in that smaller stocks are not generating trading interest. This could turn into a correction or a medium-term downtrend. The key would be a breach of support at 2870-2880 (Sensex 9480-9525). |
| Bulls and Bears: The movement was spread across several sectors. The only sectorial move appeared to be banking where Andhra Bank, HDFC Bank, Indian Overseas and UTI Bank could move up further next week. |
| Among other stocks, a motley crew of Apollo Tyres, Bharat Forge, BPCL, BHEL, CMC, Gail, GE Shipping, HCL Tech, HDFC, Hero Honda, Hindalco, Indian Hotels, IPCL, Kochi Refineries, MTNL, Sail and TVS Motors could move. Maruti is experiencing volatility but the anticipated announcement on the sale of the government's stake sell hasn't really energised the counter. |
| MICRO TECHNICALS |
| Bharat Forge Current Price: 403 Target Price: 415 |
| The stock has made a breakout on strong volumes. It has a likely target of 410 and a potential target of 415. Keep a stop at 398, at the lower end of a support band of 398-401 and go long. Book partial profits above 410. |
| GE Shipping Current Price: 245 Target Price: 260 |
| The stock shot up on Friday on the back of strong volumes. It has a minimum target of 250 and a very likely target of 260. Keep a stop at 235 and go long. |
| Indian Overseas Bank Current Price: 113 Target Price: 125 |
| The stock has jumped on a huge volume expansion. It has a target projection of about 125 and it could move further given the massive nature of the volume on breakout. Keep a stop at 105 and go long. |
| Indian Hotels Current Price: 1071 Target Price: |
| The stock has climbed on the back of a 45 degree trendline since late December, gaining around 100 in 8 sessions. It's difficult to project a target with this formation but it should continue to rise given expanding volumes. Start with an initial stop at 1040 and go long. Use a trailing stop and move it up as the scrip gains. |
| TVS Motors Current Price:111 Target Price: 120 |
| Three strong sessions have seen price gains along with volume expansion. There is a minimum target of 120 and a likely target of about 130. Keep a stop at 106 and go long. Book only partial profits at 120. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
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