The markets opened with the BSE 30 sensex at 2909 levels, saw a high of 2968 levels and low of 2904 levels, before closing at 2966 levels, thereby gaining 43 points. The advance decline ratio was at 4399 : 3558. The value of shares advancing was Rs. 6037 crores and the value of shares declining was Rs. 4708 crores. This indicates a buying bias. The total traded volume on the BSE was Rs. 3149 Crores. The total traded volume on the NSE was Rs. 7648 Crores. The week that was :- The week saw a net gain on the indices even as the trading was restricted due to a holiday. The poor traded volumes continued to be a cause for concern as the retail participation was missing. The market was positive in numerical and capitalisation terms, which imbibes confidence. The last day of the week saw technology stocks getting a boost as the bears covered shorts and value buying also emerged. The Sensex was boosted by ACC, Bajaj Auto, BHEL, BSES, Colgate, Glaxo, Grasim, Gujarat Ambuja Cements, HDFC, Hero Honda, Hind Lever, HPCL, Hindalco, ITC Ltd, L&T, Ranbaxy, Reliance Inds, SBI, Tisco and Zee Telefilms. The Sensex was dragged down by Castrol, Cipla, Dr. Reddy's, HCL Tech, ICICI Bank, Nestle and Satyam Computers. The rupee ended the day at 47.33 levels against the US $. Likely triggers :- The results season having ended, the main triggers are the overseas markets and monsoons in the coming weeks ahead. The FII investments remain positive and the GDP forecast for the Indian economy is on track, which makes the outlook stable. The put call ratio tells us that the overtly bearish outlook has reversed as the ratio now stands at 0.5 : 1. The overall outstanding contracts however have reduced considerably which is a sign of concern. The poor traded volumes also signal a lack of secular retail buying. The upmove therefore is a corrective rally - at this point in time. Traders need to watch the crude oil prices and the overseas markets for clear directional indicators for the domestic markets. Technicals :- Please stay online to enable loading of graphics from our servers. The weekly bar chart of the Nifty shows a pullback from the 920 levels which is the origination of the recent rally commencing in Nov 2002. Since the 920 support has not been violated, the level should be taken as an immediate support level. The resistance on the upside is likely to come at the 960 levels which is the trendline which was a previous support and upon violation, has become a resistance. The markets will need to convincingly close above this resistance with heavy volumes and a highly positive breadth to be able to make higher tops. The oscillators are still in a downward mode and will need a confirmatory rally to signal reversal. Since the faster momentum oscillators ( Stochastics & William's % R ) are in the near oversold levels, which indicates the possibility of an upmove.
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The author is a Mumbai based investment consultant and invites feedback at Vijay@BSPLindia.com and (022) 23438482 / 23400345. SEBI disclosure :- The author has no positions in the stocks mentioned above.
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