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B. Krishnakumar

THE stock market trend was quite robust at American bourses. The Dow Jones Industrial Average closed above the psychological 10000 point mark while the Nasdaq Composite Index settled past the 2000 mark.

The upward revision of chip prices fuelled optimism towards the technology sector. Microsoft managed to win a round in the anti-trust case which sparked a rally in the company's share price. The general optimism that the economy and the corporate sector is on a recovery path also infused positive sentiment.

For the week, the Nasdaq gained 3.6 per cent while the S&P 500 edged up one per cent and the Dow rose 1.2 per cent. All three benchmarks are at their highest levels since August.

Technically, there is still some upside for the Nasdaq Composite Index. The conservative target for the index is at 2100-2150 while the ideal target is at the 2300-2350 range. The near-term uptrend would be in force as long as the index stays above the 1930 level.

In the bigger picture, the earlier view for the Nasdaq Composite Index stays valid. In Elliott Wave terminology, the index appears to be in the final leg of an expanded flat correction. The implication is that, the index is likely to resume its downtrend and edge below the September 21 low of 1387 once the ongoing upmove terminates.

(Note : The analysis and opinion expressed in this column is based on the technical analysis of the past price behaviour. Analysis and price targets are based on Elliott Wave and Point & Figure techniques. There is a risk of loss in trading)

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