| There were net gains this week despite sluggish trading and corrections in the last two sessions. The Nifty closed up by 2.52 per cent at 3356.75 points. The Sensex was up by 2.44 per cent at 11465.72 points. |
| The Defty closed up by 2.61 per cent as the rupee continued a climb against the dollar. The broad BSE 500 climbed 2.78 per cent and advances outnumbered declines. |
| However there was a perceptible decline in volumes on Monday's session - perhaps because of traders taking the day off in advance of Independence Day and Janmasthami. The key BankNifty and CNXIT indices both underperformed the broader market indices. |
| Outlook: Breakouts outside 3250-3450 will be significant but the market is very likely to stay stuck inside this range. There is an upside target of Nifty 3450 but the market is hitting a lot of resistance at just above 3350. |
| Last week's trend points to declining volumes. If this corrects, the upside target will be met. On the downside, there appears to be support at about 3250-3275. |
| Rationale: The resistance above 3450 exists because previous trading in this range in April 2006 came on far higher volumes than is occurring at present. |
| In order to get past that resistance and indeed, to get past 3400 itself, the market will have to absorb a lot of selling and the volume action doesn't seem cqapable of doing that. |
| On the other hand, volumes have expanded with buying visibly every time the Nifty has dipped to about 3275. So the support is quite strong as well. |
| Counter-view: We've seen a trend of net gains since mid-June and the intermediate trend has lasted for 9 weeks. The odds are on the trend petering out and hence, net declines. |
| There could even be a jump to 3450 followed by a wave of selling that pushes values down sharply. I think the trend will remain positive until the settlement (August 31) but it may break earlier. |
| Bulls & bears: The major gainers this week included the PSU refiners - BPCL, HPCL and Kochi Refineries all gained sharply. Power equipment stocks such as ABB, Bhel and Siemens also looked bullish. Apart from this, Maruti and Tata Motors did well. |
| Outside these groups, the buying was quite scattered - Bharat Forge, Cadila Health and Tata Power stood out as capable of continuing bullruns. On the downside, major banks and IT stocks were hit by selling pressure on Thursday and Friday. |
| MICRO TECHNICALS |
| ABB Current price: 2832 Target price: 2950 |
| The stock has gained on stable volumes. It has a minimum target of 2860, where it will hit some resistance and a probable target of 2950. Keep a stop at 2800 and take delivery. Allow for 7 sessions to achieve the target. |
| Bharat Forge Current price: 350 Target price: 380 |
| The stock has jumped on expanding volumes. It has a likely target of 380 and a potential target of 400. Keep a stop at 340 and go long. Book partial profits at 380 and take delivery to try and extract the maximum. |
| Cadila Healthcare Current price: 672.8 Target price: 715 |
| The stock jumped on Friday clearing key resistance at 670. It has a potential target of 715 but it will face a lot of resistance between 685-700. The nearest reliable support is at 640 though there seems to be a little support at 660. Keep a stop at 660 and go long. Book partial profits above 690. |
| Maruti Current price: 840 Target price: 870, 910 |
| The stock has broken a key resistance at 820 with a volume expansion. It has a likely target of 870. Keep a stop at 820 and go long. If it closes above 875, it will probably test the next resistance at 910. |
| Tata Power Current price: 524.7 Target price: 545, 565 |
| The stock has climbed above a resistance on stable volumes. It has support at 518 and a likely target of 545 and a potential target of 565. Keep a stop at 518 and go long. Book partial profits at 545 and convert to a delivery position. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
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