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B. Krishnakumar

Nifty (2031.2)

Preferred View: The market sentiment turned distinctly bearish in the last couple of trading sessions. The Nifty failed to close past the key reversal bar recorded last week. The failure of the Nifty to move past the 2077 mark, which is the 50 per cent retracement of the previous decline from 2183.45 to 1971.15, was another sign of weakness.

As a result, the Nifty plummeted to lower levels in the last two trading days of the week. The recent drop does not, however, negate the positive view expressed last week. As observed, the positive view would be in force as long as the Nifty holds above 1990.

The immediate support for the index is placed at the 2010-2012 range. A close below this range would be first sign of weakness and a close below 1985 would almost negate the short-term positive outlook. Holders of long position in the Nifty may place the stop-loss at 2009 for a portion of the holding and at 1985 for the balance.

Comments: The upward spike in oil prices acted as a negative trigger last week. The Nifty was confined to a narrow trading zone during the early part of the week and registered a sharp drop on Thursday and Friday.

As observed last week, the outlook for the Nifty is bullish and a move to the 2100-2105 range appears likely. A close above 2105 would help the index move to the 2140-2145 range. The positive view would be under threat if the index drops below 1990 and a close below 1985 would be a cause of concern. This would effectively negate the positive outlook and would push the index down to the 1895-1900 range.

Sensex (6479.54)

Preferred view: Contrary to expectations, the index failed to make any headway on the upside. The weak trend in ONGC and Reliance played a key role in pulling down the index. This, however, has not altered the positive outlook expressed last week. The view of a rally to the 6770-6790 range would be valid as long as the index holds above 6320.

Comments: Along with the weakness in old-economy stocks, the drop in share price of technology heavyweights also played a part in affecting market sentiment. Software major Infosys is scheduled to come up with its earnings card in the week ahead. Market perception of the performance and the earnings guidance issued by the company would be a guiding force of the market sentiment next week.

CNX IT (2856.7)

Though the index moved close to the target zone of the 2988-3000 range, the uptrend failed to sustain. The index dropped below the stop-loss level of 2880, which is a cause for concern. The immediate target on the downside is at the 2730-2750 range. Long positions may be avoided; holders of short positions may have a stop-loss at 2900.

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