| The market displayed very encouraging behaviour this week. The Nifty gained 3.07 per cent to rise to 3274.35 points. The Sensex was up 2.99 per cent at 11192 and the Defty outperformed with 3.3 per cent as the rupee firmed up against the dollar after the Fed decided not to hike US rates. |
| Breadth signals were good. Advances outnumbered declines and there was a perceptible increase in volumes. The BSE 500 shot up by 4.29 per cent, while the BankNifty gained an amazing 6.32 per cent. |
| Outlook The Nifty has closed above a vital zone of resistance twice in succession and it now has a target of 3450 with a major resistance in the 3350 range before it achieves that target. |
| The intermediate trend has now been up for 8 weeks, which is also encouraging behaviour. Reactions will find support in the 3225-3250 range. |
| Rationale The Nifty had tested resistance between 3200-3250 several times earlier without breaking out. When it made the breakout last week, it happened on markedly-higher volumes. The erstwhile resistance should now act as support. |
| Momentum signals look reasonably bullish so, the price target should be reached. The long-term signals are also hopeful because the market indices have consistently found support at above the 200 DMA for several weeks. |
| Counter-view With respect to the bull market prior to May, volumes are still low. You don |
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