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B. Krishnakumar

NIFTY (1322.2)

Preferred view: The index ruled weak as anticipated and also broke the support level of 1330-1340 that was mentioned last week. Going by the recent price action, the downward correction does not appear complete as yet. The index is likely to move up and drop to lower levels thereafter.

After a move towards the 1350-1370 range in the near term, the index is likely to drop to the target zone of 1230-1250. Only a close above 1440 would indicate that the index is back into the bull orbit.

Though the Nifty is expected to rule weak in the near term, there is nothing to indicate a reversal of the recent uptrend. As mentioned in earlier weeks, the index appears on course to move towards the 1500 mark.

Comments: The market action last week was marked by a high degree of volatility. This is reflected by the fact that the index closed on a weak note on three days while it ruled firm in the remaining two days. 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 a 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 (4217.1)

Preferred view: In line with expectations, the index ruled weak. The recent price pattern suggests that the decline is not yet complete. After a short-term rally towards the 4330-4350 range, a drop to the 3940-3950 range appears likely. Only a close above the recent pivot high of 4474 would reinstate bullish trend.

Comments: The market was extremely volatile last week. After a recovery on Tuesday, the index ruled weak in the next two days. On Friday, the market remained extremely volatile, with the index dropping to a low of 4097.55 before closing at 4217.1. While the overall outlook continues to remain bullish, a drop below 3760 could pose a threat to the overall positive outlook.

S&P CNX 500 (1050.5)

Preferred View: Mirroring the overall bearish trend, this index too ruled weak. After a weak trend on Tuesday and Wednesday, the index staged a sharp recovery on Friday. As anticipated, the index dropped to the 1050-1070 range. Though the index could see some strength in the near term, a drop to the 980-990 range appears likely. Only a move above 1170 would re-establish the bullish trend.

Comments: Though the index is likely to drop to the 980-990 range, it does not negate the earlier view of a rally to the 1350-1400 range. Only a drop below 940 would negate the bullish outlook.

CNX IT Index (16145)

Preferred View: The movement in the index was in line with the overall market trend. Aided by the firm trend in Infosys, Wipro and Satyam, the index managed to recover from the day's low on Friday. Considering the positive outlook for quite a few IT stocks, the overall outlook for the index remains positive. The earlier 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.

NASDAQ COMPOSITE (1905.7)

The index managed to move past the target zone of 1850-1900 that has been projected in the earlier weeks. The overall outlook remains bullish. A move towards the 2090-2100 range appears to be on the cards. The index is currently moving within the boundaries of a well-defined upward sloping channel.

A violation of the lower boundary of this upward sloping channel would signal the dawn of a corrective phase. At the moment, a drop below 1860 would push the index into a trading zone while a drop below 1800 would blunt the possibility of a move to the 2090-2100 band.

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