Nifty target at 3625

MACRO TECHNICALS

Large volumes a must for break above 3450-3475 range.

The market continued to climb without managing a decisive breakout. The Nifty closed up by 1.05 per cent at a value of 3471.25 points. The Sensex was ahead week-on-week by 1.19 per cent at 11918.65 points.

The Defty gained a disproportionate 1.74 per cent. Breadth signals were good without being excellent.

Volumes saw a little expansion and advances outnumbered declines. The BSE 500 rose 2 per cent indicating that midcaps were outperforming smallcaps

Outlook: The market continues to show an upward bias and may testresistance in the zone of Nifty 3450-3500. If it can push past this resistance with a volume expansion, there will be a target in the Nifty 3625 zone.

Sentiment strengthened towards the weekend so, this could happen but the signals are mixed.

Rationale: The resistance at 3450-3475 has proved to be very stubborn. It will not break except with a large volume expansion. If it does break, the price formation would have a clear target of 3625 or more.

The price formation is positive but momentum indicators such as the RoC and the RSI are not. The intermediate price trend must be close to maturity with 11 weeks of net gains.

The negative divergence in momentum indicators could mean that the market will finally slip from these levels. The downside would be till 3325.

Counter-view: Volumes improved and sentiment strengthened towards the weekend. This could presage a decisive breakout early next week. The market would only be capable of this if there is a strong improvement in volumes.

Bulls & bears: Investment was scattered across specific stocks without obvious many sector biases.

The list of stocks, which outperformed included Bharti Airtel, Bhel, Grasim, Hero Honda, Hindalco, Maruti, NDTV, Oriental Bank, Patni Computers, Polaris Software, Reliance Energy and Sterlite.

Aviation stocks saw a sharp climb followed by disinvestment at higher levels on Friday. Infosys saw a sell off.

MICRO TECHNICALS

Bharti Airtel
Current Price: 430
Target Price: 445

---

The stock has apparently completed a breakout though there is a danger signal in that volumes have not expanded.

The short-term target would be around 445 "� the stock could move further but its unlikely to without a volume expansion. Keep a stop at 423.

Bhel
Current Price: 2324
Target Price: 2380

---

The stock has started moving up on a volume expansion. It has a likely target of 2380. Keep a stop at 2300 and go long. Book profits above 2370. Re-enter if it closes above 2385 since it will then have a target of 2425-plus.

Hero Honda
Current Price: 735
Target Price: 760, 800 (long-term)

---

The stock started generating high volumes about 10 sessions ago. The price is finally moving up. It has a likely short-term target of 760 and it could reach a long-term target of 800 if it overcomes strong resistance between 765-800. Keep a stop at 725 and go long.

Polaris Software
Current Price: 121
Target Price: 130

---

The stock appears on the verge of completing a long-term bullish formation. It has a short-term target of 130 and a possible long-term target of 160-plus. There is good support at 116. Keep a stop at 115 and go long.

Suzlon Energy
Current Price: 1204.75
Target Price: 1260

---

The stock is developing improved volumes and it appears to have found reliable support at 1190. It has the potential to climb to the 1260 levels. Keep a stop at 1190 and go long. Book partial profits above 1240. There could be a fair amount of intra-day volatility.

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