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| The market could trade roughly in the range of Sensex 5050-5250 and Nifty 1620-1690 |
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| The market jumped on Monday and Tuesday before trading through a tight range on Wednesday and Thursday. |
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| On Friday, it crashed, probably due to profit-taking. The Sensex hit a high of 5263 points before closing at 5131.72 for an overall gain of 1.72 per cent. |
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| The Nifty hit a high of 1688 before sliding back to 1645.8 points for a week-on-week gain of 1.89 per cent. Breadth indicators weakened on Friday, with declines outweighing advances. Volumes were excellent throughout. |
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| The broad BSE500 rose by 2.52 per cent outperforming narrower indices. The put-call ratio for the Nifty ended at around 0.38, which would be reckoned neutral territory. The Defty was up 2.47 per cent as the rupee surged against the dollar. |
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| Outlook: The most likely pattern of trading for next week is range-bound trading between roughly Sensex 5050-5250 and Nifty 1620-1690. |
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| That is, one or two more weak sessions followed by a small recovery/consolidation. As such, we are in a short-term term downtrend, while the medium-term and long-term trends remain positive. |
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| Rationale: The reaction started on Friday and it will probably work itself out when the indices hit support at Nifty 1620/ Sensex 5050 respectively. |
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| While oscillators like the RSI and ROC have started moving down, they haven't yet hit oversold levels. Neither has the p-c ratio. So, there's a little more downside left. |
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| But there are also plenty of bullish stocks moving against the overall trend of reaction. That bulllishness should be enough to prevent a serious reaction. |
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Counter-view: The market made new highs this week
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