Expect further gains today: Mohoni

Technical Analyst, Deepak Mohoni:

European markets were mixed last night, while the US indices resumed their rally. Asian markets are doing well this morning, and the global short-term trend remains up. We can expect further gains today, as a result.

The market rallied on Tuesday, with the sensex up 254.16 points (1.84%) at 14,104.20, the Nifty 80.60 points (1.94%) at 4,240.10, and the CNX Midcap 104.40 points (2.02%) at 5,277.50. The biggest positive contributions to the sensex came from ITC (41.4 points), ICICI Bank (27.9), BHEL (22.8), Reliance Comm (22.7), Larsen & Toubro (22.5), HDFC (21.3), State Bank (21.0), Tata Steel (19.3), Reliance Energy (13.1), Infosys (12.2), Wipro (9.4), Cipla (8.3), TCS (7.5), Hind Unilever (7.3), HDFC Bank (7.2), ONGC (7.0), NTPC (6.4), Hindalco (5.9) and Mahindra (5.1). The largest negative contributions to the sensex came from Bharti Airtel (19.1 points), Maruti Suzuki (12.7) and Jaiprakash Assoc (7.3).

The market's breadth was healthy, with advances outnumbering declines 2.54 times on the BSE, and 2.68 times on the NSE. The volume in advancing issues was 79.8% (53.0%) on the BSE, and 85.7% (52.7%) on the NSE, while that in declining ones was 12.5% (45.4%) on the BSE, and 13.7% (46.5%) on the NSE.

The number of most heavily traded 240 stocks at 200-day highs went up from 1 to 3, while the number at 200-day lows dropped from 6 to 0. The number at 5-day highs went up from 99 to 158, while the number of at 5-day lows dropped from 29 to 13. The 240 stocks averaged a gain of 2.23%.

The nifty opened higher and made its session low almost immediately. It then swung inside a range, and closed around its best. The CNX Midcap followed a similar course with its high at 1240, but closed below its best.

The sensex and the nifty crossed their intermediate uptrend trigger levels of 14,066 and 4,216 respectively yesterday, while the CNX Midcap closed in on its trigger of 5,406.

The sensex’s July 16 low of 12,514 becomes an intermediate bottom. The preceding intermediate downtrend will be taken to have started from May 5.

Several global indices are also in intermediate uptrends now, and it would be safe to assume that a global intermediate uptrend is under way.

The US indices, most European ones and the Hang Seng are in uptrends now.

The Hang Seng and the Nikkei are among a minority of indices which did go below their previous intermediate bottoms, and there is therefore no indication yet that the global long-term downtrend could change.

Our market too is in a major (long-term) downtrend as it has falling intermediate tops and bottoms.

The sensex will need to close above its last intermediate top of 17,736 to enter a major uptrend (bull market). The levels for the nifty and CNX Midcap are 5,300 and 7,192.

There was no change in the major trend of any of the Hotline stocks yesterday.

The FIIs sold USD 27.7 million of stocks on Monday, and the MFs dumped USD 49.7 million. The FIIs are averaging daily purchases of USD 6.1 million over the last five sessions, while the MFs are selling at a rate of USD 22.8 million.

Quite a few global markets are now in intermediate uptrends, and a global uptrend seems to be on. Most remain in major (long-term) downtrends.

The Dow rose 135.16 points (1.18%) to 11,602.50, and NASDAQ composite 24.43 points (1.07%) to 2,303.96. Infosys was up 4.70% at USD 39.24, Satyam 5.22% at USD 21.98 and Wipro 5.53% at USD 11.06. Tata Motors gained 4.58% at USD 10.51, ICICI Bank went up 13.12% to USD 33.89, HDFC Bank rose 9.82% to USD 85.97, Dr Reddy's Labs gained 1.05% at USD 15.34, MTNL rose 4.00% to USD 4.68, Patni went up 3.44% to USD 11.42, Rediff.com gained 1.62% at USD 6.27 and Satyam Infoway went up 2.13% to USD 3.36.