• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

B. Krishnakumar

Nifty (2148.15)

Preferred view: The index managed to hold above the crucial negative trigger level of 2043 that was mentioned a couple of weeks ago. Though there was an intra-day breach of this level on a couple of days, the index managed to close above it. This was an early sign of strength and the subsequent close past the positive trigger level of 2086 was an early indicator of bullishness. This imparted strength and helped the index move to 2148.15 on Friday.

The near-term trend remains positive and a move to the 2185-2200 range appears likely. The index is likely to get into a short-term corrective phase subsequently. Holders of long positions may consider either tightening of stops or take partial profits once the index gets closer to the target zone. In the longer time frame, the view of a rally to target zone of 2250-2300 is still valid.

Comments: The presentation of the Union Budget provided the necessary impetus to the market to get into a trending mode. Along with the index stocks, quite a few stocks from the mid-cap sector attracted market activity. The companies from the tyre industry got a fillip in the form of a cut in the excise duty rates. This resulted in a sharp upmove in the share price of quite a few tyre companies including MRF, Apollo and Goodyear.

The rally in the price of ONGC and Reliance Industries played a crucial role in propping the index. A relatively modest rally was witnessed in other index stocks as well. As a result, the Nifty moved past quite a few resistance levels and also moved out of the earlier trading range. The upward move and a strong weekly close is an indicator of the underlying bullish sentiment.

The long-term positive has been confirmed by the Nifty's close above crucial resistance zone at the 2125-2130 range. The index is likely to move to the 2250-2300 range by the end of this month. The positive view would be in force as long as the index holds above 2130.

Sensex (6849.48)

The index dropped below the trigger price of 6450, resulting in a further decline to the next target zone at 6070. After hitting a low of 6069, the index staged a sharp recovery. In the process, the Sensex has moved past the crucial positive trigger level of 6730. This has resulted in a positive trend and the index could hit the 7000 mark before getting into a short-term corrective phase.

CNX IT Index (2942.55)

The index was confined within the range marked by the positive trigger of 2960 and negative trigger of 2830. The index faces resistance at the 3000-3020 range. Investors holding long positions may take partial profits on a move past 3000; a trailing stop may also be deployed in the event of a sustained rally. Stop-loss for long positions may be placed at 2870.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Tax savings — Higher returns, optimal portfolio

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line