Nifty - Short-term target 4000

MACRO TECHNICALS

There is huge resistance above 4000. If it breaks that, a rise till 4075 is likely.

One big session on Friday the 13th rescued the market. The session was driven by Infosys' excellent results and guidance "� ironically this occurred on the same day that a case was filed against NRNM for "disrespecting" the national anthem.

The results led to a burst of bullish activity in tech stocks and that in turn, caused a pickup across other sectors. The Nifty closed at 3917.35 points, up 4.4 per cent while the Sensex was up 4.1 per cent as the CNXIT jumped 5.2 per cent.

The rupee strengthened to an eight-year high driving the Defty up 5.2 per cent. Breadth was eventually good "� advances outnumbered declines. The BSE500 was up 4.49 per cent. The BankNifty started a recovery, rising 4.5 per cent after taking a hammering on the rate hike a fortnight ago.

Outlook: The market seems to be poised for further gains "� Friday's session broke through a key resistance on higher volumes. There's a likely short-term target of 4000, where the Nifty will run into major resistance again. If it breaks that, a rise till 4075 is likely.

Rationale: The market was in a phase of range-trading through most of March and early April. The rise on Friday re-established a pattern of rising peaks and troughs. It also established a chart pattern of an upside breakout on higher volumes. But there's huge resistance above 4000.

Counter-view: The last 5-6 weeks have featured an unusual pattern of indeterminate trading punctuated by single sessions of massive volatility. This makes it very difficult to project future trends. It is results season and this unpredictability could continue since the market mood may be influenced by a single bellwether.

Bulls & Bears: The IT sector and banks did well this week. Both are battling macro-factors in the related variable of strong rupee and rising rates and reversal could occur if Infy's results are the exception rather than the rule. Infy itself is not definitively bullish. In the tech sector, I-Flex, Polaris, Satyam and TCS seem the best bets- Wipro jumped but its run into strong resistance.

There could be a firming up in two-wheeler stocks, which appeared to have bottomed after heavy selling "� Bajaj, Hero Honda and TVS all seem more likely to rise than fall from current levels.

Power equipment suppliers such as ABB, Siemens and Suzlon are doing well. Among banks Bank of India and Syndicate seem the best bets. Sail, Biocon, Cummins and Wockhardt also saw committed investments.

MICRO TECHNICALS

BAJAJ AUTO
Current Price: 2434
Target Price: 2525

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The stock bottomed around 2250 and has since firmed up. It could run up until the 2525 level before it runs into stiff resistance. Keep a stop at 2405 and go long. Book partial profits above 2490.

BIOCON
Current Price: 512.8
Target Price: 545

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The stock is very close to a strong breakout and it has been generating higher volumes along with the rising price trend. It has a target of 545 and it could move much further if this leads to a long-term uptrend. Keep a stop at 502 and go long.

CUMMINS INDIA
Current Price: 290.1
Target Price: 305

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A big session on high volumes makes this look quite promising. It has a target of 305 (near its all time high) and, if it closes above that, there will be a long-term target of about 350. Keep a stop at 284 and go long.

SUZLON ENERGY
Current Price: 1103.35
Target Price: 1185

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The stock has climbed above resistance at 1090 on strong volume action. It now has a target of about 1185. Keep a stop at 1090 and go long. Book partial profits at 1140

TCS
Current Price: 1262
Target Price: 1305

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The stock has firmed up in anticipation of good results. It is likely to rise until the 1305 level where it will run into tough resistance. If it closes above 1310, it could move until the 1420 mark. Keep a stop at 1245 and go long. Be prepared for high intra-day volatility. Book partial profits at above 1300.

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