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B. Krishnakumar

Sensex (3180.75)

Preferred view: The break above 3100 has blunted the earlier bearish outlook. The near-term outlook for the index has now turned bullish. The downward sloping trend line connecting the earlier high of 3758 and 3417 is the final hurdle that the index has to cross to confirm the reversal of the recent bearish trend. A move above 3250 would be critical aspect to keep an eye on.

Comments: As anticipated, the break above the resistance zone at 3080-3100 pushed the Sensex to the next target zone of 3175-3200. After touching a high of 3200.48, the index closed slightly lower at 3180.75 on Friday. Interestingly, the index has also broken above the crucial 200-day moving average (DMA), which is currently perched at 3134. The Sensex has to stay above this line for the continuation of the recent bull run.

Alternate view: The break above 3100 has negated the earlier bearish view of a drop to the 2500-2600 range. This rally has not, however, completely negated the negative view. The price movement in the week ahead would be critical in determining the medium-term outlook (spanning two to three months). A drop below the 200 DMA (current value 3134) would imply the resumption of bearish trend.

NIFTY (1006.8)

Preferred view: The move past the positive trigger price of 995 now warrants a re-look at the earlier bearish outlook. The near-term outlook for the index has now turned positive with a move towards the 1025-1030 range being a distinct possibility. A move above the trend line connecting the earlier highs of 1206 and 1106 could be the final hurdle that needs to be crossed for establishing a meaningful uptrend.

Comments: The movement in the index was in line with last week's expectations. The move past 995 imparted bullishness, which helped Nifty to breach its 200 DMA of 1008 on Friday, before closing marginally lower. The positive outlook for the index would remain valid as long as the index manages to stay above 975.

Alternate View: While the move above 995 has blunted the bearish outlook, this view would not be entirely ruled out as long as the index trades below 1050. A drop below 975 would bring the earlier bearish view into play. The price movement in the next few weeks would be critical in determining the overall trend.

S&P CNX 500 (807.2)

Preferred View: The near-term outlook for the index is extremely positive. A move towards the 890-900 range appears to be on the cards. Though there could be instances of intermittent downward correction, the overall trend continues to remain bullish.

Comments: The overall outlook for the constituents of the index, Apollo Tyres, Orchid Chemicals, Aventis Pharma, BEML, Glaxo, ITC, TVS Motor and United Phosphorous in particular, appears positive.

Nasdaq (1595.91)

Preferred view: In line with expectations, the index ruled firm last week. The overall outlook for the index continues to remain bullish. Nasdaq Composite Index appears to be on its way towards the target zone of 1650-1700 as has been mentioned in earlier weeks.

Comments: As anticipated, the break above 1553 imparted bullishness in the Nasdaq Composite Index. After a sharp uptrend in Tuesday, the index managed to record nominal gains on the remaining three days of the week.

Alternate View: The bullish view would lose its validity if the index closes below 1510. Till such time, the possibility of a rally to 1650-1700 range would be the preferred view.

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