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B. Krishnakumar

Nifty (2076.4)

Preferred view: Contrary to expectations, the market sentiment turned distinctly bullish during the week gone by. The break above the resistance level of 2040 was the first sign of strength. The close above the resistance level imparted buoyancy and the index managed to move to the next trigger level of 2090.

After an intra-day breach of this level, the index closed at 2076.4 on Friday. The break above the crucial resistance levels has reinstated a bullish trend. The index appears to be headed towards the next target zone at the 2185-2190 range. A sharp reversal may be expected if the index reaches this target zone in the June 10-12 time window.

Though the trend has turned bullish, the Nifty may get into a short-term corrective phase. The immediate support is at the 2060-2064 range; a break below this range could push the index to the 2030-2040 range. The long-term uptrend towards 2185-2190 would resume on the completion of this correction. The positive view would be negated if the index closes below 2005.

Sensex (6707.72)

Preferred view: The index convincingly broke above the resistance level of the 6550-6570 range. The threat of a potential "head and shoulder" pattern has diminished with the index closing above the resistance level at 6700. A drop below 6300 would, however, bring this pattern into play. The possibility of a break of the 6300-mark appears relatively remote. The index appears to be headed towards the 6900-6950 range. This view would be valid as long as the index holds above the bearish trigger level at 6300.

Comments: The recovery in the software sector stocks played a key role in bolstering the index. Owing to the relatively weak trend, old-economy heavyweights such as Reliance, Tata Steel and Sail did not play a role in the market recovery process. The bullish outlook for quite a few software stocks supports the positive outlook for index.

CNX IT (2896.55)

The index ruled firm and managed to move to the target zone of 2775-2800 that was mentioned last week. The index is likely to resume the uptrend on the completion of a short-term correction. After a drop to the 2800-2825 range, the index could stage a recovery process to higher levels of 3050-3100.

CNX Mid Cap 200 (2992.1)

The index went into the anticipated corrective mode last week. After a drop to the 2920-2930 range, the index is likely to resume the long-term uptrend. As observed last week, the index is likely to resume the rally to the 3150-3200 range on the completion of the expected correction.

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