Weekly market view
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Feb 29, 2004 |
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The BSE & NSE combined value of shares advancing was Rs. 18,049 crores and the equivalent value of shares declining was Rs. 21,921 crores. This indicates a broader selling bias. The total weekly traded volume on the BSE was Rs. 12,844 Crores ( previous week Rs 13,864 crores ). The total weekly traded volume on the NSE was Rs. 27,626 Crores ( previous week Rs. 29318 crores ).
The markets saw a weak undertone pervade the trading pattern as bulls preferred to unload at higher levels. Had the markets not rallied on the last day of the week, the weekly figures would have looked like that of a bear market !!! The traded volumes were lower and the market breadth was negative both in numerical and capitalisation terms. The number of put / call trades shown in the table above indicate a higher number of shorts as compared to the previous week, whereas the calls remain constant. Software and select index heavy-weights played spoilsports and dragged the indices lower. The Sensex was boosted by BSES, Dr Reddy, Gujarat Ambuja Cements, HDFC Bank, ITC and L&T. The Sensex was dragged down by ACC, Bajaj Auto, Bharati Tele, BHEL, Cipla, Grasim, HDFC, Hero Honda, Hind Lever, HPCL, Hindalco, ICICI Bank, Infosys, ONGC, Ranbaxy, Reliance, Satyam Comp, SBI, Telco, Tata Power, Tisco, Wipro and Zee Telefilms. The rupee ended the week at 45.24 levels ( + 00.01 ) against the US $. Overall, the week was in line with our expectations. Click here to view the previous weeks editions. Top I Derivatives guide I Likely triggers I Technicals I Reco's I The markets still nervous as the retail segment prefers to abstain from participating in the secondary markets. Since the ongoing public issues are likely to see a flight of capital to the primary markets and the last installment of the advance tax payments is just around the corner, we do not expect any significant buying from retail buyers. The month ahead is also the end of the financial year and we may see buying by the mutual funds to prop up NAV's for their equity linked schemes. Qualitatively speaking, the week has been a negative one as all trading sessions have shown negative market breadth and the volumes have been lower. The FII's have sold shares this week and that will be a cause for nervousness in the short term. The domestic mutual funds have been relentless sellers and continue with this trend. The F&O segment shows a continued fall in outstanding long positions and a fall in the implied volatility across the board. That shows the markets are settling at lower levels. Our investors will recollect that we had advocated last week that the bears will hammer the markets on all advances. Click here to view the previous weeks editions The overseas markets have been under slight pressure and are unlikely to provide any significant triggers in the near term. Overall, we expect the selling pressure to continue at higher levels. Exercise caution at higher levels. Top I Derivatives guide I Likely triggers I Technicals I Reco's I The weekly bar chart of the Nifty shows a falling tops and bottoms formation as the index has tested the 1760 support yet again. This is the fourth time the 1750 - 1760 levels have proved to be a support since the last 9 weeks and therefore assumes significance as a crucial short term trend determinator. If the Nifty breaks the 1750 support on a closing basis with higher volumes, the index will see a sharper fall in the short term. As we had advocated last week, the index has seen an intra-week low of 1760 whereas the predicted possible high of 1930 has not even been reached. Click here to view the previous weeks editions That makes the outlook for the Nifty nervous in the short term. The momentum oscillators are showing a downtrend and indicate that the bulls are likely to utilise all upsides to exit long positions. The upsides will see resistance at the 1830 and then at 1860 levels. Should the Nifty stay above the 1865 levels, the short term trend will turn positive. For the medium / intermediate trend to become positive again, we need to see levels of 1940 to be cleared with high volumes and positive market breadth. The open long positions need to be watched as well for signs of the bulls making a comeback.
Our outlook on the Nifty is that of abundant caution as the bulls are yet to regain their initiative. Avoid fresh long positions. Top I Derivatives guide I Likely triggers I Technicals I Reco's I
For stock specific recommendations, please refer to our special edition, "Flavours of the week". Click here to view the previous editions of the same. Top I Derivatives guide I Likely triggers I Technicals I Reco's I Your feedback is important ! Please click here to let us know your views. Click here to inform a friend about this page on our website.
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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183.21
2833 Crs Feb 1 - 26
Your feedback is important ! Please click here to let us know your views. Click here to inform a friend about this page on our website.