| Week Ahead in Mkts: New highs possible |
| MACRO TECHNICALS |
| Devangshu Datta / New Delhi July 2, 2007 |
| The intermediate projection would suggest a move till 4400 points on the Nifty is possible. |
| The market surged in the post-settlement session driven by a combo of positive monsoon projections, sops to the sugar industry and speculative activity in bank stocks. |
| The Nifty closed at 4318.3 points for a week-on-week gain of 1.56 per cent. The Defty was up 1,46 per cent as the rupee lost a little ground versus the dollar. The Sensex underperformed the Nifty somewhat, rising 1.26 per cent to close at 14,650 points. |
| Breadth was excellent with advances outnumbering declines. The Nifty Junior rose 3.2 per cent while the BSE 500 was up 1.82 per cent. |
| The Bank Nifty also rose by 3.03 per cent while the CNX IT registered a positive but marginal move of 0.53 per cent. Volumes were good, although they are always high in a settlement week. |
| Surprisingly, in what seems to be a key week, the mutual funds and FIIs were not uniformly bullish. The FIIs were net sellers through the first four sessions while domestic funds were net buyers. |
| Outlook: The market appears on the cusp of a bullish breakout. A saucer pattern has almost been completed with the accompaniment of high volume on the breakout. |
| The intermediate projection would suggest a move till 4400 points on the Nifty is possible. The short-term projection suggests intra-day levels of 4365 will be reached next week. |
| Rationale: High volumes and good breadth on a rising price line are a classic bullish combination. |
| The saucer formation is also a reliable pattern that usually achieves its targets. The last two weeks have seen a narrow trading range, a pattern that has been clearly broken. The last month has seen a correction followed by a recovery. |
| Counter-view: The breakout is not absolutely confirmed yet |
