Nifty could go up to 4150 levels

MACRO TECHNICALS

There's no apparent reason why the bull run will not continue for a little longer.

The market consolidated after a breakout with four winning sessions followed by one loser. Although there were several large intra-day swings, the net changes were nominal.

The Nifty closed at 4090.05 points, up by 0.93 per cent., The Sensex was up by 0.89 per cent at 14183 points. The Defty was up 1.35 per cent. Breadth signals were fair.

The BSE 500 rose by 1.26 per cent. The Midcaps index finally beat its May 20006 highs. Volumes were good. Advances out numbered declines except in the last session of the week.

Outlook: The market has consolidated at new levels after a breakout past 4050 in early January. It should manage to achieve the closing values of 4150 fairly soon, perhaps next week itself. On the downside, there's support between 4025-4050.

Rationale: Next week is settlement and the high Nifty put-call ratios of the instant suggest that carryover will come in a strong market.

The chart patterns predict a rise till the 4150-plus levels at least. There's no apparent reason why the bull run will not continue for a little longer.

Counter-view: This market is extremely stock-specific at the moment due to the dissemination of Q3 results.

A disappointment from Satyam triggered the Friday sell-off. If another biggie or two under performs, there will be a market reversal at least in the short-term.

Bulls & bears: The mid caps outperformed the large caps - this is probably because institutional support wasn't very strong. The CNX IT underperformed due to the Satyam-inspired sell off and a harder rupee.

Some individual bank stocks did quite well though the Bank Nifty returned a lower number (0.44 per cent) than major indices.

Among specific stocks, Biocon, Bharti Airtel, CMC, Dabur, Grasim, Gujarat Ambuja, ICICI, Jet, L&T, MTNL, IVRCL, IDBI and IFCI all have bullish or potentially bullish price lines. On the flip side, there have been sell-offs in M&M, Ranbaxy and Satyam.

MICRO TECHNICALS

Biocon
Current Price: 420
Target Price: NA

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The stock has seen a huge jump on volume expansion. It's difficult to make a projection with this pattern but a target in the 440 range is certainly possible. Keep a stop at 410 and go long. Expect fairly high intra-day volatility.

Grasim
Current Price: 2891
Target Price: 2950

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The stock is displaying a stable bullish pattern after a breakout past the 2845 mark. However volumes have declined post-breakout so, that's not a great sign.

The price pattern can project to a target between 2950-3025. Stay conservative due to the low volumes and assume the lower end of that zone as a target. Keep a stop at 2870 and go long.

IVRCL
Current Price: 403
Target Price: 415, 445

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The stock is generating massive futures volumes although the spot is displaying a range trading pattern between 385-415. A breakout past 415 would set up a target in the range of 445-450.

On Friday, it was bullish in a fairly bearish market. Go long with a stop 395 and book partial profits above 410. If it closes above 415, increase the position with 410 as the stop.

L&T
Current Price: 1569
Target Price: 1630

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L&T completed a breakout at the 1505 level and it set up a target of 1630. A small reaction has since set in with support at 1555. Keep a stop at 1550 and go long.

Satyam
Current Price: 489
Target Price: 460

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A sell-off on disappointing results has pushed the stock down from 520 levels. The bearishness may not be over. There is a chance that the stock will continue to fall till it hits a support at about 455-460. Keep a stop at 495 and go short. Cover below 465.

(The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.)