| It was an almost neutral week for the major indices but there were sharp gains across the IT and banking sectors. The Sensex gained 1.1 per cent, closing at 13429 points. The Nifty was up 0.47 per cent. The Defty lost ground as the rupee dipped. |
| Breadth signals were poor. Advances were outnumbered by declines. The BSE 500 was up 0.32 per cent and volumes were good however. The Bank Nifty were up by a massive 6.28 per cent while the CNX IT index was up a significant 1.89 per cent. |
| Outlook: The Nifty/Sensex combo is hitting serious resistance at around 3900/13600. Our most recent price-target was about 3950 and that could be hit on an intra-day basis. |
| But the current trend, especially Friday looked on the weak side, so a minor correction could occur. There is support at 3750 (and also 3800). If 3750 is broken, the correction could turn into a major sell off. |
| Rationale: We have seen weak momentum and breadth signals for several weeks in a row. However, the price line continued to gain. |
| There were indications last week that the price trend is finally weakening "� intra-day volatility increased and there were divergences in the performance of different price indices. This could be a short-term correction or the start of an intermediate correction. |
| Counter-view: Despite everything, there were net price gains. It's very dangerous to trade against a trend until leading indicators have been confirmed by a price move. |
| The market has hit successive highs for the past three weeks and it's impossible to accurately project targets in totally new price zones. There is a real possibility that it will just keep going up for an indefinite period. |
| Bulls & Bears: A group shares seem to be developing clear but divergent trends. Banks are up"�Bank of India, SBI, Canara Bank and UTI Bank were four outperformers. |
| IT stocks are overall bullish though it's tough to pick specific winners. Apart from these, HPCL and BPCL are both recovering from a hammering. ACC, HDFC and NTPC also look good. |
| On the other hand, auto shares are clearly down. Bajaj, Hero Honda and Maruti seem to be taking the brunt of it. |
| FMCG majors are also being hammered "� Dabur, ITC and Hindustan Lever were among the stocks that lost ground. Dr Reddy's and Bharat Forge were two other stocks that saw selling. |
| MICRO TECHNICALS |
| ACC Current Price: 1097 Target Price: 1150 |
| The scrip has jumped sharply in the past two sessions, rising from 1020 levels on high volumes. The likely minimum target is 1150. This breakout looks important even on a weekly chart and the move could actually extend a lot further. Keep a stop at 1080 and go long. |
| Dabur Current Price: 139.75 Target Price: 130 |
| The stock has plunged from 155 levels in the last four sessions. It has a likely target of 130, where there is strong support. Keep a stop at 145 and go short. It's likely to make a sharp recovery from 130 till around 145 so, it could be profitable to double-plus) - cover the short and take a fresh long position. |
| Hero Honda Current Price: 694.9 Target Price: 675 |
| The stock broke an important support when it dropped below 700. There was also a sharp volume expansion. The downside target would be about 675. There is support at 670, which is likely to hold. Keep a stop at 702 and go short. Cover below 680. |
| NTPC Current Price: 139.05 Target Price: 150 |
| The stock is on the verge of a breakout and it has developed a very promising volume expansion. If it closes above 140, it will touch 150 and may move further. Keep a stop at 135 and go long. It's possible to project a long-term target of 165 but that is unlikely to be achieved inside the calendar year. |
| UTI Bank Current Price: 485 Target Price: NA |
| The stock continues to display a strong uptrend across all timeframes. It is in another phase of good volume expansion. It's impossible to set reliable targets with this sort of pattern. But you can set a sliding stop-loss at 475 and go long. Move the stop up 5 points for every 10 point advance in the stock. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
Top Section
Explore Business Standard