| The market continued to make net gains despite two sharp intra-day corrections. The Sensex closed at 13,703.33 points on a week-on-week gain of 2.04 per cent. |
| The Nifty was up 2.54 per cent, closing at 3950.85 points. The rupee gained against the dollar and the Defty responded with a 3.01 per cent weekly gain. |
| Breadth signals were average. Advances outnumbered declines by a marginal amount. Volumes tapered off towards the end of the week after a spike on Wednesday. |
| The broad BSE 500 rose by 2.49 per cent. The CNX IT outperformed the broader indices considerably, jumping by 4.82 per cent. The Bank Nifty moved up only nominally. |
| Outlook: The background signals continue to look weaker than they should in a market running at record highs. Another short correction may occur next week. The market could dip till Nifty 3800 and recover without the major trend being affected. A close below 3775 would signal a trend reversal. |
| Rationale: Volumes dipped in the last two sessions; intra-day volatility was up in the first three days. If we have a high-volatility session with low volumes, that would trigger a significant correction. Monday's (Nov 20) low of 3794 marks a significant support. |
| Counter-view: Whatever the background signals, the trend has continued to run up for over five months. You have to respect a trend that is strong. |
| It will eventually break but it would be dangerous to expect this to happen next week or to trade the indicators before the price line confirmed any apparent weakness. |
| Bulls & bears: Both the buying and selling trends were scattered across different sectors and there isn't an industry-wide trend in the current trading patterns. Next week's settlement will guarantee volume concentration in F&O stocks so, there isn't much point in looking outside that list. |
| The winners this week included Bhel, Bajaj Auto, Bank of India, Dr Reddy's, i-flex, IVRCL, Glaxo, GMR, Hindalco, MTNL, NTPC, State Bank of India, Tata Power, Tisco and Zee Telefilms. |
| Siemens took a hammering and there was apparent high-volume selling in Bharti as well. |
| MICRO TECHNICALS |
| Bank of India Current Price: 200 Target Price: 210 |
| The stock has shown a stable uptrend with a little burst on Friday that pulled it above resistance at 195. It has a target of 210. Keep a stop at 195 and go long. The long-term trend looks very promising, so it's possible to keep a delivery position for around 3-4 weeks. |
| i-flex Current Price: 1649.45 Target Price: 1700 |
| i-flex broke out of a trading range on fairly high volumes last week. It has a probable short-term target of 1700 and it may go further. Keep a stop at 1630 and go long. The long-term formation suggests that a target of 1900 may be within reach in the timeframe of three-four weeks. |
| IVRCL Current Price: 424 Target Price: 465 |
| The stock has risen vertically on high volumes in the past five sessions. It's possible to project a target of about 465 using weekly charts but this sort of formation is notoriously difficult to accurately project. |
| Keep a stop at 400 and go long. The huge moves have unfortunately made it imperative to keep wide stops since there are no reliable supports close to the last price. |
| NTPC Current Price: 150.15 Target Price: 170 |
| NTPC saw a big session on Friday when the price moved through a range of 133-151 and closed near the top. The likely target is about 170-175. Keep a stop loss at about 144. |
| Zee Tele Current Price: 369.4 Target Price: 385, 410 |
| The stock has made a breakout but it has come on average volumes. Depending on how optimistic you feel, it's possible to project targets of either 385 or 410. |
| Keep a stop at 360 and go long. Book partial profits above 380 - the lower target is more likely because of the relatively low volumes. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
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