Ashwani Gujral,Technical Analyst

The market broke out of the 4250-4300 range on the Nifty. This week if the Nifty can maintain 4300, it could rise to 4500. Support will continue to come in at 4250-4260. Stop loss for medium term positions remains at 4100

Banking, capital goods, infrastructure and cement will continue to lead the market. Midcaps are likely to outperform the large caps. Reliance industries is moving in a narrow range of 1680-1720 and decisive direction will emerge as soon as we see a breakout from this range.



Anil Manghnani,Modern Shares & Stock Brokers

The markets have closed quite strongly on Friday and thus the expectations are that the Sensex would make a new life high this week. However, the charts are showing a lot of negative divergences on the longer term frame suggesting that the market may not have a significant rally past its previous highs.

The Indices are once again approaching the crucial resistance range of 14500 to 14800 (Sensex) and 4275 to 4390 (Nifty). Thus one should use these ranges to book profits with a view to buy again on declines.

On the upside the targets for the Sensex are placed at 14764-14832-15100. For the Nifty these targets are at 4333-4352-4390-4482.

On the down side the supports for the Sensex are placed at 14389-14220-13985-13779. For the Nifty these targets are at 4233-4190-4078-4055.

The trading strategy in the short term would be to book profits at higher levels and buy the falls at the support levels strictly with a trading perspective.



Markets may see two-way moves - Deepak Mohoni

European markets were up on Friday, while the US indices slipped marginally. Asian markets are mixed this morning, and little changed. There is no clear global short-term trend right now, and the moves are also quite small. We could see two-way moves today with an upward bias.

The market rallied on Friday, with the Sensex up 145.94 points (1.01%) at 14,650.51, the Nifty 36.30 points (0.85%) at 4,318.30, and the CNX Midcap 88.80 points (1.51%) at 5,975.65. The market's breadth was healthy, with advances outnumbering declines 1.36 times on the BSE, and 1.56 times on the NSE.
The volume in advancing issues was 73.4% (56.2%) on the BSE, and 79.5% (75.2%) on the NSE, while that in declining ones was 24.7% (26.3%) on the BSE, and 17.1% (23.6%) on the NSE.

The biggest positive contributions to the Sensex came from HDFC (25.5 points), HDFC Bank (20.7), State Bank (20.3), ICICI Bank (17.4), Larsen & Toubro (16.8), BHEL (13.2), Reliance (8.7), Reliance Energy (8.4), Reliance Comm (7.6) and ACC (6.1). The largest negative contributions to the Sensex came from Hindalco (11.9 points) and Bharti Airtel (6.8).

There was no change in the major trend of any of the Hotline stocks.

The number of Hotline stocks at 200-day highs went up from 20 to 31, while the number at 200-day lows dropped from one to zero. The number at 5-day highs went up from 68 to 105, while the number of at 5-day lows dropped from 76 to 31. The 240 stocks averaged a gain of 1.23%.

The main indices opened higher, improved further, and then were largely directionless till 1500. A small rally in the last 30 minutes saw them close around their highs. The CNX Midcap followed a similar course, but was stronger.

The indices had breached their intermediate downtrend triggers in mid-May, but there was no ensuing decline, and a rally started off instead.

The intermediate uptrend that had started in early May is therefore being treated as still on. The levels below which it would end have moved up to 14,407 for the Sensex, 4,236 for the Nifty, and 5,809 for CNX Midcap.

The CNX Midcap and the Nifty have made fresh all-time highs during this intermediate uptrend, while the Sensex has come very close to doing so.

With two of the three main indices having hit all-time highs recently, it can be assumed that a bull market is in existence. Doubts had arisen in March, when the indices made lower intermediate bottoms.

The bull market would end if the Sensex were to close below its last intermediate bottom of 13,550. The equivalent triggers are 3,980 for the Nifty and 4,655 for the CNX Midcap.

There was no change in the major trend of any of the Hotline stocks on Friday.
Almost all global markets are still in intermediate uptrends, despite some of the recent sell-offs.

All global markets continue to remain in major (long-term) uptrends.

The FIIs sold USD108.3 million of stocks on Thursday, while the MFs acquired USD20.1 million worth. The FIIs are currently averaging daily sales of USD31.2 million over the last five sessions, while the MFs are buying at an average rate of USD7.4 million.

European markets were up on Friday, while the US indices slipped marginally. Asian markets are mixed this morning, and little changed. There is no clear global short-term trend right now, and the moves are also quite small. We could see two-way moves today with an upward bias.

All the major global indices remained in intermediate uptrends despite the declines seen recently. All the major global indices’ major trends are still up.

The Dow fell 13.66 points (0.10%) to 13,408.62, and the NASDAQ composite went down 5.14 points (0.20%) to 2,603.23.




Pressure builds up!c - Hitendra Vasudeo

Over the last few weeks, the Sensex has been in the congestion zone of 14724-13554. A higher bottom at 13946 seems to have been formed and the congestion has narrowed down. The congestion zone now is 14725-13946.

For the past few weeks, we have been indicating that the market is developing a situation of a breakout or a crash. The movement has narrowed further and we may see the Sensex breaking out or breaking down on either side of the range of 14724-13946. A pressure cooker like situation has already built up before the burst.

The weekly trend has turned up after the weekly closing on 22/06/07 at 14467 and can turn down on fall below 13946 during the week or if the Friday weekly closing is below 14336.

Weekly resistance will be at 14666-14725-14740 while the weekly support will be at 14573-14484-14407. In case of a fall and close below 14400, expect a slide to 14227-13946.

In case of a breakout and close above 14740, expect the rise to get extended during the week towards 14996-15138 at least. To an outer extent, the Sensex can move towards 15875. Now, it all depends on how the Sensex is able to give a breakout and close above 14740.

If the support of 13946 gets violated without crossing the top, then we are getting into a longer retracement and corrective move. To start off, the first retracement would be the rise from 12316 to 14683. The retracement levels will be at 13780-13500-13220.

Strategy for the week

Buy large cap stocks when the Sensex gives a breakout and close above 14740 with the low of the week as stop loss or 13946, whichever is lower. If that happens, then expect a rise towards 15133-15365-15596 at least. Capitalise on this view, monitor the Sensex and trade in Nifty irrespective of futures based parameters that determine the prices in the futures market. What matters is the trend and the trend is likely to be the same with discounts and premiums, which can keep happening and keep changing. The underlying factor is the view on the market. Accordingly, traders can play the respective strategies. Bottom line is the range of 14725-13900. Bullish, if the Sensex moves above 14725 and bearish below 13900.

When the Sensex gives a breakout and close above 14740, buy strong stocks that can lead the rally and those which make new highs. Stocks that are within the 15% band of the 52-week high are the ones, which have good strength.




Bulls likely to extend their hold on sentiments-Vijay L Bhambwani

The markets continued to log gains as the index closed above the psychological barrier of 4300 on the Nifty spot. The traded volumes were marginally lower as the new derivatives settlement saw traders create positions afresh. The inside day formation advocated yesterday had the desired effect as was expected. Since such formations are followed by large moves, the upmove was logical after overseas cues were positive.

The market breadth was positive as the BSE and NSE combined figures were 2145 : 1535. The capitalisation of the breadth was also positive as the combined exchange figures were Rs 11900 crore : Rs 3148 crore. The F&O data for the expiry session saw a 20% decline in the net long positions.

The indices have closed near the intraday high of the session and surpassed the 4300 levels with a positive market breadth and above average volumes. Both are indicators of optimism and the closing is the highest ever as daily charts indicate. That shows a prevalence of the bulls over the bears and the outlook ahead being positive. The coming session is likely to witness intraday levels of 4349 on advances and 4293 on declines. Watch the 4293 level on Monday, should this level not be violated, the strength will gain momentum.

The outlook for the markets today is that of optimism as the bulls are likely to attempt to extend their hold on the sentiments and the keep the bears under check. Should the overseas cues be neutral / positive, the bullishness will gain further impetus