Inching up towards new highsThere were very nominal changes to index values in a settlement week where the Nifty swung between a high of 5,294 points and a low of 5,193 before finally settling at 5,282 for a small gain of 0.4 per cent. The Sensex was also up 0.4 per cent at 17,644 points. The Defty gained a more substantial 0.7 per cent due to the rupee strengthening against dollar.
Breadth was fair through the week with advances outnumbering declines. Volumes were on the low side for a settlement week. The BSE 500 was ahead by 0.3 per cent while the Midcaps gained 0.4 per cent and the Junior was up 0.8 per cent. FIIs were net buyers while the domestic institutions continued to be net sellers--- this has been the pattern through the entire March settlement
Outlook: The market is likely to touch a new 52-week high sometime next week, beating the 5,310 mark it registered in early January 2010. But momentum is weak and so are volume indicators. Unless there's a pickup in trading interest, prices beyond the 5,300 mark will not be sustainable. Most likely, prices will remain in the range of 5,200-5,300.
Rationale: The intermediate trend has now been up for around 7 weeks and it could stay up for several more weeks. If the pattern of higher highs is maintained, the 52-week high of 5,310 would be exceeded and that would confirm a strong long-term trend as well.
However, there are signs of weakness in the low volumes and low momentum indicators. Another technical signal of weakness is that the simple 200-Day Moving Average (DMA) is outperforming the exponential 200 DMA. A correction should find support at around 5,200. A possible reversal in the intermediate trend would be signalled by a fall below 5,193, setting up a pattern of lower lows.
Counter-view: Most likely, unless volumes climb, the market is likely to trade in the range of roughly 5,200-5,350 next week and end in the lower half of that zone. One underlying cause for a non-trending market is that the DII-FII attitudes have been consistently opposed. If institutional attitude is aligned, the market will move in the direction of net institutional positions. Until volumes do climb, we won't see a major breakout.
Bulls & Bears: The lack of a strong trend in the overall market has been reflected in sector movements. In many cases, one day of net sector gains has been followed by sell-offs in the next session. Banks were among the best performers last week with the BankNifty bouncing almost 2 per cent.
The IT Index underperformed, with only nominal gains. Smaller IT stocks did better than the larger ones but the rising rupee could put pressure on the whole sector. Pharma stocks registered steady gains with Ranbaxy, Cipla, Dr Reddys, Glenmark Piramal all finding backers.
Energy was in the limelight on Friday as were auto- and auto-ancillary scrips. Both sectors look poised to register potential gains on Monday as well. The trends in metals and real estate appear quite mixed. Engineering and construction also showed signs of selective investment.
MICRO TECHNICALS
BAJAJ AUTO
Current Price: Rs 1,977.9 0 Target Price: Rs 2,050
The stock has just made an upside breakout on expanding volumes. It has the potential to move till around the Rs 2,050 and it should reach Rs 2,020 in the short-term. Keep a stop at Rs 1965 and go long. Be prepared for excessive volatility.
GLENMARK PHARMA
Current Price: Rs 252.60 Target Price: Rs 265
The stock is picking up volumes along with a strong uptrend in price. It has the potential to rise till around Rs 280- Rs 285 but it will run into resistance at around Rs 265 so, that should be the initial target. Keep a stop at Rs 249 and go long. Book 75 per cent profits at Rs 265 and reset the stop to Rs 260.
ONGC
Current Price: Rs 1,079. 90 Target Price: Rs 1,120
The stock has started to move up on some volume expansion. It has the potential to test Rs 1,120 on an intra-day basis and it may move further, till around the Rs 1,140 mark. Keep a stop at Rs 1,065 and go long. Above Rs 1,115, book 50 per cent profit and reset the stop loss to Rs 1,105.
HIND UNILEVER
Current Price: Rs 238.50 Target Price: Rs 250
The stock has just started recovering from a period of sustained selling that pushed prices to a recent low of Rs 218. It has the potential to bounce till the Rs 250 level. Keep a stop at Rs 232 and go long. Book 50 per cent profits above Rs 245 and reset the stop loss to Rs 250.
ICICI BANK
Current Price: Rs 947.50 Target Price: Rs 920
The stock is range-trading through a zone of Rs 915-960 and it's more likely to head down in the next week. Keep a stop at Rs 955 and go short. Increase the position below Rs 940. Start booking profits at around Rs 920. Below Rs 920, consider reversing the position and going long.
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| Fund managers in buy mode | 29-MAR-10 | | In an otherwise quiet week for the markets, Smart Portfolios fund managers were busy building their portfolios ahead of the quarterly and full year earnings next month. |
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| Markets at a glance | 29-MAR-10 | | Despite RBI hiking interest rates during the week, the markets delivered the seventh week of gains in a row. |
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| Indian stimulus exit won't 'kill' rally | 29-MAR-10 | | India’s stocks will withstand the withdrawal of stimulus measures and extend last year’s rally, the biggest in 18 years, as domestic spending strengthens, said Prudential Financial Inc. |
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| Inching up towards new highs | 29-MAR-10 | | There were very nominal changes to index values in a settlement week where the Nifty swung between a high of 5,294 points and a low of 5,193 before finally settling at 5,282 for a small gain of 0.4 per cent. |
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| Analysts' corner | 29-MAR-10 | | Our global commodities team has increased its forecasts for 2010-12 annual contract settlements by 2-8 per cent. |
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| Trend reversal | 29-MAR-10 | | Contrary to popular belief of a 50 basis points hike in key rates during April 2010 monetary policy review, the RBI stepped in decisively in the interim. |
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| Aiming high | 29-MAR-10 | | Ahluwalia Contracts, a mid size construction company, is well placed to benefit from the planned investments in the infrastructure sector, especially in urban infrastructure. | |
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Top five pics | Mid-term pics
Analysts' picks: Oil India, BHEL, Tata Power, Shriram Transport Finance
Indraprastha Gas a good bet for long-term investors
29 Mar 2010, 0622 hrs IST, Ramkrishna Kashelkar
As the mature natural gas industry enters its next round of high-investment-high-growth phase, long-term investors can gain from betting on Indraprastha Gas.
Financial management: How a woman can plan her future
29 Mar 2010, 0615 hrs IST, Supriya Verma Mishra
To help women make the most of each penny, ET Intelligence Group explores some schemes/options that can help them plan their future well.
Blue Dart Express offers attractive investment opportunities
29 Mar 2010, 0606 hrs IST, Amriteshwar Mathur
Blue Dart Express enjoys a strong presence in courier & integrated express package distribution space and offers attractive investment opportunities.
Lupin: Future prospects are bright
29 Mar 2010, 0602 hrs IST, Kiran Kabtta Somvanshi
An all-round growth delivered by Lupin bodes well for its future prospects.
Pharma sector: There is room for value buying
29 Mar 2010, 0557 hrs IST, Kiran Kabtta Somvanshi
While valuations of the pharmaceutical sector appear to be strained, there is still room for value buying from small and large-cap universe.
BHEL a good bet for medium to long-term investors
29 Mar 2010, 0550 hrs IST, Ahish Agarwal
BHEL is currently trading at around 30 times its trailing 12-month earnings, which makes it an attractive option. Investors can consider exposure in the stock with a medium to long-term outlook.
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Trading strategies on 8 stocks that buzzed last weekWeekly Market WrapTechnical Picks – StocksSrc:Business-Standard, ET, HDFC Securities, Moneycontrol and DP blog and etc
