The most likely trend over the next five sessions is range-trading between 3550-3800. |
A high-volatility week saw the indices end almost unchanged after five swings that more or less cancelled out. |
The Sensex closed at 12884.99 points, down a very nominal 0.01 per cent. The Nifty closed at 3718 for a loss of 0.23 per cent. The Defty was off by 0.26 per cent. |
Breadth signals remained negative and the BSE 500 lost a significant 1.4 per cent indicating that smaller stocks underperformed the majors. Volumes remained good. The FIIs remained net sellers though they did a little buying towards the end of the week. The Indian mutual funds were also net sellers. |
Outlook: The market is very delicately poised. Expect net losses over the next couple of weeks. At the very least, the support at 3550 is likely to be tested again. The most likely trend over the next five sessions is range-trading between 3550-3800. |
Rationale: Technically, the Budget accentuated an intermediate downtrend that started on February 9. There is just a chance that the market bottomed at around the 3550 level. If not, that support will obviously be broken. |
On the upside, there's strong resistance between 3750-3800. It's not yet clear whether this is the initial move in a new long-term bear-market or a sharp, short correction. |
Counter-view: There is just a possibility that the correction is over. If the support at 3550 holds and the market manages to stay above its own 200 Day moving average (it's just above at the moment), we will have to conclude that this is indeed the case. |
Frankly further losses look likely. The market is down over 15 per cent from its all time highs. When corrections go beyond the 10 per cent mark, the market tends to lose around 30 per cent before recovering. |
Bulls & Bears: This is one of those market phases when it is extremely difficult to find stocks with a clear trend. |
I suspect that the market is still absorbing the deeper implications of the Budget and waiting for Q4 results, which will enable some data-mining. One blessing is that there are few stocks, which are obviously doing worse than the market at large. |
The few scrips which do have trends are more likely to move up than down. This short-list includes ABB, Hero Honda, IPCL, Tata Steel, Biocon, Nicholas, NTPC and UTI Bank. |
MICRO TECHNICALS |
ABB Current Price: 3518 Target Price: 3700 |
The stock has risen sharply off a base at 3250 level. It has decent support at about 3430. There's some resistance at 3565 and a likely target of 3700. |
Keep a stop at 3450 and go long. Book partial profits at 3565 and buy more if the stock closes above 3700. |
Biocon Current Price: 447 Target Price: 455 |
The stock has bounced back from lows of 402 in early March. It is running into resistance above 450. A close above 458 would lead to a target of over 500. |
There's a fair degree of volatility and the daily range could be anywhere between 438-460. Try and buy below 440 and sell above 455 on a daily basis. Go long only if Biocon closes above 458. |
Hero Honda Current Price: 691.4 Target Price: 700, 715 |
The stock is testing the upper end of a trading range which has a resistance at around 700. Any close above 700 will create a target of 715 and perhaps 735. Keep a stop at 685 and go long. Book partial profits at 700. |
NTPC Current Price: 140 Target Price: 160 (long-term) |
The stock is developing a decent pattern, testing resistance at between 140-145. |
It will take a while to break through but it has a target of 160 which should be achievable in about four-six weeks. Keep a stop at 135 and accumulate a delivery position. |
UTI Bank Current Price: 456 Target Price: 470, 500 |
The stock is forming a nice base after bottoming out in the 415-420 region. |
There's resistance at about 470 and a three-week target of about 500 and volumes are building up in a fashion that makes on optimistic. Keep a stop at 449 and go long. Partially cover above 470. |
(The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |