The week past and expected
On Weekly basis the market is still in to rising top and rising bottom formation, which is a sign of bullish continuation. If we
look at the chart closely then we can clearly observe that the Index is forming a rising parallel channel and that may lift the
market up to 5360/5390 (17900/18000) in the near term. Broader pattern is still corrective in nature as the market is far
behind the level of 6300/21200 and has lapsed the period of 10 months. However, due to survival of the market above
4500/15330 level it has negated the possibility of bigger correction in the near term and may remain in to gradual rising
mode.
As the current run up was "over retraced" we may expect correction in the market and that may come on the back of
Bank Rate rise from the RBI. As per technicals it will be an opportunity to buy on dips with an upside target of minimum
5370/17900 in the near term. First important support for the market exists in the range 5150/5140 and in case the market
widens the corrective move, then the level 5060/5040 may act as a next best support for the market. We would advice
investing aggressively around 5060/5040 levels with a medium term view in mind.
For the day, we will watch the level 5200/17380 as a trend survivor level for the market and any likely close below the
same may extend the current weakness to the levels 5150/5140 in the near term. On the higher side 5240/17500 may act
as a major hurdle and a close above the same may strengthen the grip of bulls. For the day trade the strategy should be
to trade with levels.
In the last week, interest sensitive items have under performed the market as if they were aware of the move. Realty,
Auto, Banks and to some extent Capital Goods underperformed to the move of the Sensex. The Metal, Oil and Gas and
IT sectors have played the major role to lift the market. During the week, on declines traders and investors may look for
following stocks as they may recover quickly from lower levels. Reliance, BEL, Rel Infra, Century Text, PNB, Siemens, Apollo-
Tyres and Private Banks.
