| The week saw two big swing sessions on Monday and Wednesday. But these went in opposite directions and the net effect was to leave the indices trading almost unchanged from last week's levels. |
| The Nifty closed at 3478 points, nominally up by 0.2 per cent. The Sensex closed at 12009, up by 0.76 per cent. The Defty was up 0.47 per cent as the rupee continued to strengthen. |
| The breadth of the market stayed marginally positive with more share advances than share declines. Volumes were high. The BSE500 moved up 0.62 per cent. The BankNifty outperformed the broad market, moving up by a big 5.35 per cent. |
| Outlook: It's very difficult to call next week's direction given the lack of a clear trend. The Nifty is persistently testing resistance at between 3450-3500 without being able to make and sustain a clear breakout. |
| The momentum indicators are weak but breadth and volume signals seem positive. A close above 3500 would create a target of 3625. A close below 3450 would probably lead to a dip till 3325. Any close outside 3425-3500 would mean at least a 100-point move in the direction of breakout. |
| Rationale: Conflicting signals combined to a range-trading market make it almost impossible to make short-term projections. Weak momentum could be a lead signal; on the other hand, volumes are good and that's positive. The time element is in favour of bears "� the intermediate trend has been up since mid-June and it is close to maturity. |
| Counter-view The market is awaiting an external trigger with the bulls and bears evenly matched. One positive signal is that both FIIs and mutuals have been bullish through the last week and the market usually moves up when there is bullish institutional consensus. Another positive is that the Nifty options put-call ratio remains at 1.37, which is a sign of a somewhat oversold market. |
| Bulls & Bears Refining and airline shares shot up on the basis of lower crude prices but the move ended before the week. Banking shares rose on the back of speculation about the United Western merger and the announcement of a partnership between Corporation Bank, Indian Bank and Oriental Bank as well as the strong rupee. |
| Other bank stocks such as BoB, BoI, Canara, Indian Overseas, PNB and Union all moved up. There was mild interest in Satyam and Mphasis and strong buying in Shipping Corporation. There was scattered buying in stocks such as Grasim, Hind Lever, Larsen and Zee. On the downside, commodity stocks especially metals seemed to see a sell off. |
| MICRO TECHNICALS |
| Bank of Baroda Current Price: 268 Target price: 255 |
| The stock has seen strong volume-price action and it is testing resistance between 270-275. A close above 275 would set up a target of 300-plus and maybe more since it would be an all-time high. |
| However BoB has never been able to sustain a price above 275 and it has a downside till 255. Sell with a stop at 275 and cover below 260. If BoB does close above 275 go long. |
| Grasim Current Price: 2484.65 Target price: 2550 |
| The stock has gained sharply in the past two sessions and the move has come on excellent volumes. It has a short-term target of 2550 and a possible long-term target in the 2750 range. Keep a stop at 2430 and go long. |
| Hindustan Lever Current Price: 243.8 Target price: 230 |
| HLL has failed to breach resistance at 245 in the past five months. It has been range-trading between 230-245 since early July. The temptation is to go short with a stop at 247. Cover at 230. If it does close above 247, go long with a stop at 245 and an upside target of 275. |
| L&T Current Price: 2641 Target price: 2750 |
| There has been a huge volume expansion in the past 5-6 sessions. The stock is likely to breakout above 2650 and move till 2750 before settling down to trade in the 2650-2750 range. Keep a stop at 2620 and go long. Partially cover anywhere between in the zone between 2685-2700. |
| Satyam Current Price: 828.95 Target price: 850 |
| The stock seems to have completed a small breakout. It has a projected target of 860 but it's likely to underperform since the volume action is not very good. Most likely, it will run into resistance around the 850 mark. Keep a stop at 820 and go long. Book at least partial profits above 850 and cover the whole position by 860. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
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