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B. Krishnakumar

NIFTY (1372.1)

Preferred view: The much-awaited technical correction took place last week. Though the overall outlook for the market is still bullish, the downward correction that begun on Tuesday is not complete as yet.

The Nifty is likely to seek lower levels in the coming week. A drop to the 1330-1340 range appears likely while a close below 1330 could lead to a much more prolonged corrective phase.

The recent uptrend is likely to re-establish itself after the completion of the ongoing correction. As mentioned last week, the index appears on course to move towards the 1500 mark within the next few weeks.

Comments: Except for the firm trend on Monday, the overall trend remained subdued in the remaining days of the week. The index formed a crucial pivot high at 1430.7 on Tuesday. A close above this level would be critical for the resumption of the upward trend. On the downside, a break below 1240 would result in a slide to the 1160-1170 range.

Alternate View: As observed in earlier weeks, the recent uptrend has not negated the possibility of a drop to low of 849. A close below 1160 would lend credence to this view. Only a close above 1550 would almost negate this possibility and would be a strong indicator that the market is in a new bull orbit.

SENSEX (4305.9)

Preferred view: The index turned weak and the sentiment was particularly bearish on Friday. The downward correction from the Tuesday's high of 4474 does not appear complete as yet. Only a close above this high would negate the short-term bearish outlook. A drop to the 4200-4220 range appears likely. A break below this level could result in a drop to the 4150-4170 band.

Comments: After a series of negative divergence between the indicators and the Sensex , the much-awaited correction took shape last week. While the overall outlook continues to remain bullish, a drop below 4150 would blunt the bullish outlook. A drop below 3760 could pose a threat to the overall bullishness.

S&P CNX 500 (1118.3)

Preferred View: The movement in this index was in line with other major indices. But for a strong trend on Monday, this index, too, ruled weak on the other days of the just concluded week. The near-term trend has turned weak and a drop to the 1050-1070 range appears likely. Only a move above 1170 would re-establish the bullish trend.

Comments: The index managed to move past the target zone of 1140-1150 that was mentioned last week. The recent weakness has not negated the long-term target of the 1350-1400 range. Only a drop below 940 would negate the bullish outlook.

CNX IT Index (16264.6)

Preferred View: After a firm trend in the first two days, a bearish trend prevailed in the remaining three days of the week. Helped by the strong trend in Infosys, the index touched a high of 17617 on Tuesday.

While quite a few technology stocks have turned weak in the past couple of days, the overall outlook continues to remain positive.

Last week's view of a rally to the 19000 mark continues to remain valid. Only a drop below 14000 would negate the positive outlook for the index. Though the possibility of a short-term decline in the technology sector stocks is not ruled out, the near-term outlook for stocks such as iGate, Polaris, i-flex and NIIT remains positive.

Nasdaq Composite (1855): As anticipated in earlier weeks, the index has managed to move towards the projected target zone of 1850-1900. After touching a high of 1888.65 on Monday, the trend turned weak. The overall outlook continues to remain positive.

The Nasdaq Composite Index is likely to move towards the immediate resistance zone of 2090-2100. Only a drop below 1800 would blunt the positive outlook and could push the index into a narrow trading range.

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