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B. Krishnakumar

NIFTY (2383.45)

Preferred view: The market activity was devoid of any significant trend for the second week in succession.

Though the index managed to register a gain of about 22 points, the market action did not portray a positive picture.

The index reversed direction at the resistance zone at the 2430-2440 range mentioned last week.

After hitting a high of 2426.65, the index turned weak on Thursday. The near-term trend does not appear positive.

The failure to close above the resistance zone and the subsequent breach of the low formed on Thursday is a potential bearish set-up.

The index is likely to test the first support level at the 2330-2335 range.

A close below 2330 could push the index to the 2300-2305 band. A correction to this range remains the preferred view.

Comments: Though the index managed to move past the high of the "Doji" pattern referred to last week, the price movement during the week was not convincing enough to support a reversal of the short-term bearish trend.

After the "Doji" pattern in the earlier week, a "spinning top" pattern has been completed in Japanese candlestick charts last week.

This again is an indicator of indecision. The occurrence of such patterns after a prolonged uptrend is a pointer towards a topping pattern.

Signs of weariness have started emerging in the weekly charts as well.

A significant correction would dawn upon the market once these patterns get more pronounced in the weekly charts. Investors may continue to book profits on every rally, especially in index stocks.

As observed in earlier weeks, the long-term bullish view remains intact. The index appears to be on course to move to the target zone of the 2550-2600 range.

Investors may consider fresh exposures as and when fresh "buy" signals are triggered.

SENSEX (7780.76)

Preferred view: After the completion of a "Hanging Man" pattern in the weekly Japanese candlestick charts, another bearish pattern — "Gravestone Doji" — has been completed this week. Both are key reversal patterns and their occurrence in the weekly charts is even more significant.

The index could drop to the first support zone at the 7500-7550 range. Only a close above 7950 would reinstate stability.

CNX IT (3064.35)

Except for a sharp rally on Wednesday, the index remained subdued in the remaining days of the week.

The price movement has tended to congest at the crucial resistance zone at the 3100-3110 range.

The hesitancy to move past this zone confirms the earlier bearish view of a drop to the 2830-2840 range.

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