| Breadth signals remained poor with declines outnumbering declines. There were losses across every major market index "� the Junior was down 0.4 per cent while the Midcaps were down 1.65 per cent and the BSE500 was down 1.48 per cent. Volumes remained poor as indeed they have since late January. Foreign institutional investors (FIIs) remained net sellers and Indian funds were also sellers. |
| Outlook: The market is liable to stay stuck inside the trading zone of 4,600-5,000 this week with intra-day volatility of up to 200 points and alternate swings in opposite directions. If it closes below 4,600, there is a possible downside till the 4,200 level. |
| Rationale: The indices bounced from good support at about Nifty 4,575-4,600 and hit resistance at 4,875. The pattern of range-trading is likely to continue because the support at 4,600 looks solid. There's strong resistance above 4,900. The exponential 200 day moving average (DMA) is now at about 5,075 and that's likely to prove an insurmountable secondary resistance. |
| Counter-view: Although the entire market looks oversold, there have been continuous bearish triggers based on fresh bad news. In such circumstances, a strong trend (this one has already pushed prices down by 27 per cent) can continue. |
| This was week eight of first downtrend in a new bear-market, counting from the all time high of January 10. The first wave in a new bear-market can last 8-12 weeks, so further net losses are more likely than net gains. |
| Bulls and Bears: It was a litany of woe for most sectors. Real estate was hit hardest with every listed stock taking a hammering "� Peninsula Land seems most promising in terms of making a quick recovery. PSU refiners also got hurt quite badly. |
| Most auto sector stocks, with the exception of Bajaj Auto, also saw disinvestment on shaky February sales numbers. There were massive sell-offs in Hindalco and Sail. The ADAG counters, RNRL, Reliance Capital and RComm generated high volumes but lower prices. REL may have bottomed however. |
| While most banks did badly, Axis and Corporation looked to be on the comeback trail. Several pharma stocks such as Nicholas, Ranbaxy, Sun Pharma and Sterling Biotech continued to show defensive strength along with FMCG major HUL. Apart from this, investment was scattered across specific counters such as ABB, Adlabs , Bombay Rayon, Chambal Fert, Educomp, NTPC and Titan. |
| MICRO TECHNICALS |
| ABB Current Price: Rs 1,134.1 Target Price: Rs 1,225 |
| The stock managed a pattern of higher bottoms on Monday and Thursday in contrast to most of the market. Volumes also improved. There is room for a climb till the Rs 1,225 level where there is another strong resistance. Keep a stop at Rs 1,110 and go long. |
| Bombay Rayon Current Price: Rs 249.3 Target Price: Rs 275 |
| The stock saw an interesting formation on Friday when the high-low range was much more than in the previous session, volumes improved sharply, futures climbed to a premium and the price rose. This engulfing pattern usually means a good short-term upmove. There's room for the scrip to climb back into the zone of Rs 260-280 with a probable target of about Rs 275. Keep a stop at Rs 240 and go long. |
| Educomp Current Price: Rs 3,625.6 Target Price: Rs 3,850 |
| The stock saw a positive engulfing pattern on Friday and it generated encouraging volumes through the week. It is likely to climb back to around Rs 3,850 and maybe higher, intra-day. Keep a stop at Rs 3,570 and go long. |
| Peninsula Land Current Price: Rs 88.85 Target Price: Rs 105 |
| Peninsula saw a sequence of higher bottoms this week when most real estate counters lost a lot of ground. However, it did not generate very strong volumes. There is some resistance at Rs 90. If Peninsula closes above Rs 90, the stock has a target projection of about Rs 105. Worth accumulating with a 10-session perspective and a stop at Rs 84. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
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