| Breadth indicators looked fair without being exciting. Volumes were decent through all four sessions. The broad BSE 500 rose 1.19 per cent. Advances outweighed declines and the Nifty put-call ratio remained around 0.34, which is neutral, tending towards the overbought territory. |
| Outlook: In the next week, trading could stay stuck inside the range of Sensex 5750-5900/ Nifty 1825-1900. There are no obvious technical indicators as to the direction of any possible breakout. |
| An upside breakout would hit resistance at around Nifty 1920 (Sensex 5950), while a downside breakout would find support at around Nifty 1775, Sensex 5600. |
| Rationale: Speaking personally, I would consider a downside breakout more likely. The chart pattern of the moment seems to be indecisive, while the long-term trend remains positive. |
| In the absence of strong technical indications, it makes sense to consider market history. Since 1989, every general election has triggered some sort of downtrend during the period while polling was in progress. That's a compelling statistic. An interesting corollary - the post-election month has always seen a strong uptrend apparently regardless of the voting outcome. |
| Counter-view: The above rationale for expecting a downtrend is completely statistical and it's not backed by any apparent technical signals of weakness. This election could prove to be the proverbial exception to the rule and we might just see the market moving up during the polls. |
| There is actually more chance of this occurring because the market has behaved bearishly or at best, indecisively, since late-January and intermediate trends rarely last more than three months. |
| Bulls and bears: The movers this week were a motley crew apart from healthcare stocks and refining PSUs. Apollo Hospitals and Cadila Healthcare moved up strongly. BPCL, IOC and IPCL looked poised for possible upside breakouts. |
| Among finance stocks, IDBI and Bank of Baroda looked strong technically. Engineering stocks like Cummins, Thermax and Siemens also did well. |
| In the pharma sector, Ranbaxy and Wockhardt were strong. There appeared to be selective investment in Arvind Mills, Essel Packaging, NIIT, Reliance Capital, SSI, Supreme Industries, Trent and Tisco. |
| MICRO TECHNICALS |
| RANBAXY Current price: 1043 Target price: 1070, 1120 |
| The stock has received a boost in the arm following a favourable US court judgment vis a vis Glaxo. It has already started to rise on expanding volume. |
| It will encounter resistance in the short-term around 1070 but after that is overcome, it will probably go back till around the 1120 levels where it will see a strong resistance. A medium-term buy of around four-six weeks. Keep a stop at 1000. |
| APOLLO HOSPITALS Current price: 200 Target price: 225 |
| The stock completed a bullish saucer-shaped formation with a breakout on high volumes. In the long-term of six-eight weeks, it could have a target in the range of 240. |
| However, it is likely to run into resistance at around the 225 zone and that will probably be the short-term target. Keep a stop at 195 and go long. |
| ESSEL Current price: 220 Target price: 245 |
| The stock has just completed a bottoming formation and appears to have undergone a trend reversal as well. The chart formation suggests that it would have a fairly easy run up till the levels of 245 where it will see tough resistance. Keep a stop at 214 and go long. |
| INDIAN OIL CORP Current price: 526 Target price: 550 |
| The stock seems to have completed a bottoming formation and then consolidated around the current levels. It will encounter serious resistance around the 550 mark and it could move up till around those levels very quickly. However, there is likely to be strong intra-day volatility in the stock. Keep a stop at 510. |
| NIIT Current price: 196.5 Target price: NA |
| The stock seems to have completed a 15-week-long correction and moved into a gentle uptrend. It will see major resistance around the levels of 195-205. If that is overcome, there will be a rise to around 220 where there is another zone of resistance. Eventually the scrip should climb till around the 275 level. This process may take around six-eight weeks. |
| SUPREME INDUSTRIES Current price: 213 Target price: 245 |
| The stock has started rising on the basis of high volumes. It has just completed a bullish v-shaped formation. It ought to have a target in the range of 245 and the move could come very quickly. Keep a stop at 200 and go long. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
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