| The market's behaviour reversed post-settlement. After hitting an intra-day high of 4219.7 points on Thursday, the Nifty crashed on Friday and finally settled at 4083.5, with a negligible change from the previous week. |
| The Sensex was very nominally up at a close of 13908 points. The Defty however, rose 2 per cent as the rupee strengthened. |
| Breadth was marginally positive. Advances outnumbered declines and the BSE 500 was up 0.44 per cent. Volumes tapered sharply after the settlement as the market plunged on profit-taking. |
| The Bank Nifty gained a disproportionate 2.78 per cent on the basis of a credit policy that left rates unchanged. The CNX IT dropped 1.56 per cent because of the rupee factor. The May F&O settlement is too new to read much into put-call ratios. |
| Outlook: The likelihood next week is either range-trading with a small upside,or a further decline. The Nifty could fall further to support around 4025 or lower, till the 3975 levels. On the upside, there's clearly delineated resistance starting at 4175. A decline looks most likely. |
| Rationale: Momentum indicators such as the 14-day RSI and 10-day ROC are showing sell signals. The Nifty is at a key support level "� if it dips below 4075, it could drop till the next strong support at 4025. If 4075 holds, the market will range-trade between a level of 4075-4200. |
| Counter-view: It would take a big volume expansion to drive the market up to test its all-time highs at Nifty 4239. The FIIs and Indian mutual funds were both net buyers last week. |
| The Defty actually hit an all-time high on Thursday. So, it's possible - if both institutional groups increase their buying next week. If not, there's either range-trading or a decline in prospect. |
| Bulls & bears: Most heavyweight stocks appear to be bearish or neutral at best. Banks may be due for a sell-off "� the financial sector rally appeared to be driven by sheer relief and there was profit-booking on Friday itself. |
| HDFC, HDFC Bank, ICICI Bank and SBI all looked as though they were likely to lose ground again on Monday. IFCI continued it's bull-run. |
| IT stocks will also remain under pressure until the rupee bull-run eases off. Infosys definitely witnessed selling pressure. i-flex looked the best defensive stock in this space. |
| Bharti Airtel, Cipla and Reliance Industries all took a hammering. So did Grasim, Gujarat Ambuja, Reliance Communications and Tata Steel. Power equipment "twins" ABB and Siemens did see positive investment however. |
| MICRO TECHNICALS |
| Cipla Current Price: 217 Target Price: 205-210 |
| The stock took a major hammering after disappointing Q4 results. It busted a key support at 225 on a huge volume expansion. It has a downside till the 205-210 range and any reversal will peter out at 226. Keep a stop at 225 and go short. Cover below 210. |
| IFCI Current Price: 40.35 Target Price: 43.5 |
| The stock has very powerful support at 39 and there's a lot of open interest in the 40 call. It is possible to project a target till 43.5 and the steep bull run could continue beyond that point. Keep a stop at 38.5 and go long. Book partial profits above 43. |
| Indiabulls Real Estate Current Price: 340 Target Price: 325 |
| The stock seems to have started a reaction after hitting resistance between 355-365. It's still generating big volumes since it's a new-listing. There appears to be a downside till the 320-325 level. |
| Keep a stop at 345 and go short. Start covering the short at 325. Reverse the position and go long if it drops below 320, with a stop at 312. |
| Siemens Current Price: 1170.35 Target Price: 1210 |
| The stock is developing a bullish pattern with a chart breakout coupled with decent volumes. It has a minimum potential target of 1210 and optimists could suggest that the run will continue till the 1240 levels. |
| The issue is major resistance starting at current levels and running all the way till 1215. Keep a stop at 1155 and go long. Cover above 1200. |
| Reliance Industries Current Price: 1539 Target Price: 1490 |
| The stock has bounced from a key support at 1532 after selling that pushed prices down from the 1610 level. If the current level is broken, there is more reliable support at 1490. Keep a stop at 1555 and go short. Cover below 1500. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
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