The Professional Ticker Reader

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June 28, 2003

Markets consolidate further. Sensex gains 84 points.
Higher volumes, positive breadth as rally continues.: Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	3500	3589	3438	3583	+ 83.56
BSE - 200	442	449	434	449	+ 07.26
NSE - 50	1100	1126	1076	1125.55	+ 25.30
Dow Jones	8989 (-) 212	Nasdaq	1625 (-) 19	FTSE	4068 (-) 92
Advances	7080	Declines	5615	Put / Call ratio - 5849 : 20939
FII Investments	Rs + 2207 Crs Jun 2 - 26		Domestic Funds	Rs (-) 197 Crs Jun 2 - 26

The value of shares advancing was Rs. 15305 crores and the value of shares declining was Rs. 6701 crores. This indicates a broader buying bias. The total traded volume on the BSE was Rs. 6338 Crores. The total traded volume on the NSE was Rs. 15813 Crores.

The week that was

The week began trading on a firm note and ended with the benchmark indices gaining about 2.5 % in value terms. The indices are now trading at 15 month highs and almost all the major index heavy-weight component stocks have participated in the bullish movement. The traded volumes have increased on a week-on-week basis and that is a sign of strength. The Sensex was boosted by ACC, Bajaj Auto, Dr Reddy, Grasim, Gujarat Ambuja Cements, HCL Tech, Hero Honda, Hind Lever, HPCL, ICICI Bank, Infosys, ITC Ltd, L&T, MTNL, Nestle, Ranbaxy, Reliance Inds, Satyam Computers, SBI, Telco, Tisco and Zee Telefilms. The Sensex was dragged down by BHEL, BSES, Castrol, Cipla, Colgate, Glaxo and Hindalco. The rupee ended the day at 46.39 levels against the US $.

Likely triggers

The markets are riding the FII investment wave and follow-up buying support by local operators is adding to the upward momentum. The overseas markets have fallen this week, contrary to the domestic scenario, which shows that our markets are moving out of sync with the overseas markets. The put call ratio is now poised at 0.27:1, which is a highly overbought condition. Extreme caution needs to be exercised in markets like these. The PSU disinvestment factor is likely to keep the downside limited in the immediate future. The end of June marks the end of first quarterly NAV computation for institutional players, we expect the markets to consolidate / correct at present levels thereafter. The week ahead should be that of caution.

Technicals

The weekly bar chart of the Nifty shows a level of closing higher than the previous top. This is a sign of strength, which needs a confirmatory move. The short term momentum oscillators are in the overbought zone and that is a sign of concern. The oscillators are poised at Jan 2003 levels, from where the markets had melted. We feel that that this frenzied buying period should see a correction which will be healthy for the markets. So far the corrections have been short and terminated abruptly. Watch the 1080 - 1085 levels very carefully for the markets have good support at these levels. On the upside, expect resistance at the 1150 - 1155 levels.

Our outlook for the Nifty in the coming week is that of caution. Aggressive fresh buying should be avoided for now.

Your call of action

Traders and investors alike should exercise caution at these levels, hold present long positions and refrain from aggressive fresh longs.

For stock specific recommendations, please refer to our special edition - Flavours of the week.

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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