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B. Krishnakumar

AFTER a few weeks of subdued trend, the sentiment at the American market turned positive during the just-concluded week. Earlier in the week, the positive comments from General Electric and Texas Instrument uplifted market sentiment.

Further, reports that the factory production rose at a rate that was the fastest in almost two years also played a role in imparting positive momentum at American stock market. However, the market turned a bit weak towards the end of the week after SBC Communication and Honeywell said profits would miss expectations.

The overall strength in the market helped the benchmark indices to log weekly gains. The broad-based S&P 500 went up by 1.3 per cent for the week while the Nasdaq Composite Index registered a gain of 2.3 per cent.

Last week's uptrend in the Nasdaq Composite Index has strengthened hopes of further recovery in the short term. A move past 1835 in the next couple of days would enhance the possibility of a further uptrend.

As mentioned in earlier weeks, the view of a near-term rally of about 200-300 points would stand negated only if the index declines below the 1695 level.

A move past 1875 would be a pointer towards further upside potential. As of now, short-term strength is the preferred view for the Nasdaq Composite Index. Only a drop below 1695 would warrant a change of this view.

(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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