The Professional Ticker Reader TM

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Oct 11, 2003

Markets smash through hurdles. Sensex gains 216 points.

Bright outlook as markets anticipate bullish Diwali.

Weekly statistics

The BSE & NSE combined weekly value of  shares advancing was Rs. 25114 crores and the value of shares declining was Rs. 11631 crores. This indicates a broader buying bias. The BSE & NSE combined weekly total traded volume on the BSE was Rs. 11787 Crores. The total traded volume on the NSE  was Rs. 25620 Crores.

The week saw landmarks being achieved in terms of traded volumes, new highs being achieved and strength of the bullishness throughout the corrective phase - which was brief and half hearted. The results season having commenced, the market players showed enthusiam as the numbers were above expectations. The traded volumes on the NSE crossed Rs 25000 crs this week in the cash segment -  a new landmark. The market breadth remained positive and FII inflows were positive. The global markets displayed steadiness which helped limit the downsides when the correction set in. The Sensex  was boosted by Bajaj Auto, BHEL, BSES, Castrol, Cipla, Colgate, Dr. Reddy, Glaxo, Grasim, Gujarat Ambuja Cements, HCL Tech, HDFC, Hindalco, ICICI Bank, Infosys, ITC, L&T, MTNL, Ranbaxy, Reliance, Satyam Computers, SBI, Telco and Tisco. The Sensex  was dragged down by ACC, Hero Honda, Hind Lever, HPCL, Nestle and Zee Telefilms. The rupee ended the week at 45.38 ( + 00.01 )levels against the US $.

Note - ** = signifies lower levels as compared to the previous session.

The put call ratio is at 0.31 : 1.

Outstanding long positions ( Gross ) total Rs. 9,485 crs

The results will continue to play a major role in the week ahead. The results so far have been confidence inspiring and if advance indications are anything to go by, the corporate sector is likely to cheer sentiments on the whole. The years to trimming and cost rationalisation is now bearing fruits as the bottomlines are improving. FII inflows remain positive and outstanding long positions ( gross figures ) are an indicator of a very strong undercurrent. The boost in the markets will come from the energy, steel, auto, cements and software in that order. Our investors will recollect our " special outlook report " which has presented a case in point, showing sectoral projections of where the markets are headed. The traded volumes during the week also show an interesting picture - of the entire transacted quantum, 40 % of the trades were initiated on bearish breadth days and the remaining 60 % on uptick days. The negative breadth was due to the brief correction. The indices are now in a low resistance zone and are likely to continue their northwards movement.

The overseas markets are likely to gain upward momentum too as important landmark resistance levels have been surpassed. The feel-good-factor of the international markets is likely to have a trickle down effect on our markets too as the upmove gathers momentum. The overseas markets are analysed in greater detail in the "Flavours of the week." as well as on our website. Overall, we re-affirm our earlier view that the markets are headed for a bullish Diwali after 3 years.

The daily bar chart of the Nifty shows a conclusive breakout above a formidable resistance provided by the Feb ' 01 highs. With this breakout, the markets have entered a low resistance bullish zone, which will see a lot of hesitant bulls coming out of the sidelines and joining the bullish bandwagon. Our investors will recall that we had explicitly advocated that bulls are in for an excellent Diwali this year - a completely contrarian call as compared to the broader segment of the market experts who advocated a sharp correction downwards ( click here to view the previous weekly report ). We has also advised an upmove upto 1525 - 1530 last week, once the 1500 levels were overcome. This computation has come true as the Nifty has closed at the 1523 levels. The next level for the Nifty on the upsides is the 1565 levels. On the downsides, expect a good short term support at 1450 for this week, which should not be violated.

Our outlook on the Nifty is that of optimism as the undertone remains firm.

Have a profitable day.

 

Vijay Bhambwani

Ceo :- Bsplindia.com

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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