The Professional Ticker Reader TM

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March 27, 2004

Markets arrest the free fall. Sensex gains 85 points.

Lower volumes, negative breadth remain concerns.

Weekly statistics

Indices	Open	High	Low	Close	Change
BSE - 30	5446	5552	5324	5528	85.50
BSE - 200	714	722	689	720	06.86
NSE - 50	1726	1755	1669	1747	22.40
Dow Jones	10213  26	Nasdaq	1960  20	FTSE	4358  59
Advances	6129	Declines	6946	Put / Call trades - 60607 : 126398
FII Investments	Rs  3400 Crs Mar 1 - 25		Domestic Funds	Rs  271 Crs  1 - 25

The BSE & NSE combined value of shares advancing was Rs. 18770 crores and the equivalent value of shares declining was Rs.11015 crores. This indicates a marginal selling bias. The total weekly traded volume on the BSE was Rs. 9821 Crores ( previous week Rs 11805 crores ). The total weekly traded volume on the NSE was Rs. 20016 Crores ( previous week Rs. 24221 crores ).

The markets saw a nervous sentiment pervade the trading fraternity in the first half of the week and a revival of moods in the last two days. The revival was so sharp that the gains made in these two days pulled the markets into positive territory on a week-on-week basis. The market breadth remained negative, albeit marginally so - thanks to the bullishness of Thursday & Friday. The traded volumes remained lower than the previous week as the retail interest was lacking. Technology stocks staged a smart recovery even as the Rupee made one of the largest gains in recent memory in a week. The Sensex was boosted by ACC, Bajaj Auto, Bharati Tele, BSES, Cipla, Grasim, Guj Amb Cem, HDFC Bank, HDFC, Hero Honda, Hind Lever, HPCL, ICICI Bank, Infosys, ITC, L&T, Reliance, Satyam Comp, SBI, Telco, Tata Power, Wipro and Zee Telefilms. The Sensex was dragged down by BHEL, Dr Reddy, Hindalco, MTNL, ONGC, Ranbaxy and Tisco. The rupee ended the week at 44.47 levels ( 00.69 ) 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 are likely to see a short term bullishness as the sentiments have improved after the expiry of the March derivatives contracts. The F&O signals point to a short covering at the 1680 levels and a lack of aggressive short selling pressure. The end of the year is likely to see the bulls return to the markets as advance tax, IPO's, book balancing and other factors would no longer exist. The year end will see mutual funds supporting the markets to boost their NAV's by buying index frontline counters. The rise in the Rupee will be a negative for exporting units and positive for the import bill. Results and elections will be the main triggers in the coming days. FII inflows have continued to pour in and the support has seen a damage control to the sentiments. The turmoil in the Taiwan markets is likely to benefit India as a favoured destination for FII investments. Of the entire traded quantum, 44 % of the volumes were on positive market breadth days ( Thursday & Friday ).

The overseas markets have also seen a minor rally as the sentiments in the US markets have improved over improved consumer spending data and subsiding terrorist fears. The coming week will see upward consolidation in the market sentiments.

Top I Derivatives guide I Likely triggers I Technicals I Reco's I

The weekly bar chart of the Nifty shows a bounceback from the 30 week moving average after violating the 13 week SMA. That makes the possibility of the onset of a long term bear market pretty remote. As we have been advocating, the long term trend will become bearish only if the Sensex closes sustainably below the 4800 - 5000 levels. Our investors will recall that we had categorically predicted a support on the Nifty at the 1670 and resistance at the 1750 levels last week. These levels have been proved to be accurate and the markets have seen a corrective upmove. Click here to view the previous weeks editions. The outlook for the coming week is positive as the worst seems to be over for now. However, it does not necessarily imply that the best has started too. The Nifty is moving within a downward sloping channel and the lower trendline is co-inciding with the 30 week SMA. The support base is established there at the 1670 levels. The upsides will see resistance at the 1775 and then at the 1820 levels. The outlook will be conclusively bullish only above the 1865 levels - that too if the index stays above this level sustainably with higher volumes. Then a flag formation will be confirmed. Till then, the trading range provided by the downward sloping channel remains valid.

Our outlook on the Nifty is that of a rally in the coming week. Small purchases maybe attempted by savvy traders.

Top I Derivatives guide I Likely triggers I Technicals I Reco's I

Have a profitable day.

 

Vijay L 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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