Rajat K Bose
With positive international cues, Nifty may move towards higher target of 4325, communication stocks might do well today, weakness in IT & auto stocks may continue May 23: The Sensex and the Nifty have posted modest rise on final closing basis. The latter is posting fresh time all time highs. However, both have come close to their resistance zones. Profit taking led supply pressure may come in at current juncture unless the major index drivers—Reliance and its siblings along with Tata Steel—pull the market up further. Earlier, we have referred to 4287 – 4290 as the target levels for the Nifty. It has come very close to that. Today, with positive international cues it may actually be able to cross the resistance level and move towards its higher target of 4325. The range between 4325 and 4350 would be another resistance zone for the Nifty. However, facing resistance and taking time to move up does not mean that the market has turned decisively weak. For that first we need to see 4217 being breached on the downside with selling volume expanding. Decisive weakness for the short term would be confirmed if only the Nifty closes below 4160—that is a long way off as of now. Communication stocks might do well today continuing to be led by Reliance Communications. Weakness in IT and auto stocks may continue. Sugar stocks are likely to be impacted by adverse news at least initially. Some cement and capital goods stocks are also likely to do well today.

Anil Manghnani
f the Nifty can cross the life high of 4245, we can expect it to rally to 4265-4275-4387. For the Sensex, if it can cross the recent high of 14383, it can rally to 14514-14764As mentioned last week, the markets did retest the recent highs and thus the expectations would now be for the indices to cross the previous all time highs. If the Nifty can cross the life high of 4245, we can expect it to rally to 4265-4275-4387. For the Sensex, if it can cross the recent high of 14383, it can rally to 14514-14764. On the downside the supports for the Sensex are placed at 14047-13859-13593. For the Nifty these supports are at 4136-4118-4077-4047.

Hitendra Vasudeo
Our overall strategy to book profits at higher level continues with stock wise rotation in order to get into momentum based moves with a stop loss. Investors can hold on to long positions till Sensex level of 13500 is intact.Looking for a breakout; will it happen?By Hitendra VasudeoLast week, we had expected the struggle of the Sensex to continue. In an overall view, the struggle was not visible but definitely it could not make a new high and also it could not cross the recent high of 14383. The Sensex recovered and showed week-to-week gains but underperformed the overall market as stock specific moves were witnessed. The Sensex opened at 13954.41 last week maintained a low at 13885.46 and moved up to a weekly high at 14352.98 to finally close the week at 14303.41. It recorded a net gain of 506 points on a week-to-week basis. The trend, which had turned down for one week bounced back to turn the tables. The weekly trend has turned up and can turn down only on fall below 13500 or if the Friday weekly close is below 13985. Weekly support will be at 14180-14008-13796 and weekly resistance will be at 14475, 14725 and 14943. The Sensex has stiff resistance at 14400-14725. If the Sensex is able to give a breakout and close above 14725, then expect the rally to continue towards 15616 at least. Review of the Elliot Wave Count to get the broad market picture:- First Count: Wave 1- 2594 to 3758; Wave 2- 3758 to 2828; Wave 3-2828 to 12671; Internals of Wave 3 Wave i- 2904 to 3416 Wave ii- 3416 to 2904 Wave iii- 2904 to 6249 Wave iv- 6249 to 4227 Wave v- 4227 to 12671 Wave 4 Wave a -12671 to 8799 Wave b-8799 to 14723 Wave c-14723 to 12316 Wave 5- 12316 to 14384 (current move in progress) Internals of Wave 5 Wave 1- 12316 to 13386 Wave 2- 13386 to 12425 Wave 3- 12425 to 14384 Wave 4- 14384 to 13554 Wave 5- 13554 to 14352 (Current Move in progress) Alternatively, Wave 4 could still be in progress with the formation of an Expanding Triangle. If we get into an Expanding Triangle, then the following will be the internals of Wave 4: Wave a -12671 to 8799 Wave b-8799 to 14723 Wave c-14723 to 12316 Wave d- 12316 to 14383 (not yet complete, current move in progress) In an expanding triangle, each wave exceeds the previous move and retraces back the whole gain as well. In this case, if Wave d has begun then it could move to cross the top of 14724 and retrace back the whole rise back to 12300. Wave d, in that case, will cross 14724 and Wave e after the completion of Wave d will move down back lower towards 12300. Once ‘a-b-c-d-e’ formation gets complete, then expect the rally once again to make new highs for Wave 5. But this Wave 5 can be a failure also.After reviewing the wave count, the earlier argument of stiff resistance at higher level gains importance and for any further sustained rally the top of 14724 has to get crossed at the earliest. The market overall is in a trading orbit now and traders buying must book profit and churn to get into new momentum stocks. Strategy for the week Our overall strategy to book profits at higher level continues with stock wise rotation in order to get into momentum based moves with a stop loss. Investors can hold on to long positions and till Sensex 13500 is in tact. As a general thumb rule, keep 2 weeks low as stop loss for any long positions for the current up trended stocks. Violation of 2 weeks low of stock or indices could puncture the expected upmove. Before the breakout, market will test the top and keep reacting before finally crossing it.