Mkts may gain further tdy, mirroring global cues

Technical Analyst, Deepak Mohoni :

The market rallied on Wednesday, with the Sensex up 838.08 points (5.94%) at 14,942.28, the Nifty 236.70 points (5.58%) at 4,476.80, and the CNX Midcap 322.65 points (6.11%) at 5,600.15. The biggest positive contributions to the Sensex came from ICICI Bank (125.7 points), Reliance (118.8), HDFC (83.2), Larsen & Toubro (75.3), State Bank (61.3), Reliance Comm (60.6), BHEL (43.9), HDFC Bank (43.9), Bharti Airtel (36.4), Tata Steel (32.1), Reliance Energy (21.3), ONGC (17.9), Infosys (17.7), DLF (15.6), Jaiprakash Assoc (13.8), NTPC (9.5), Satyam Computers (8.8), Tata Motors (8.7), TCS (8.7), ITC (7.0), Grasim (6.8), Hindalco (5.9) and Wipro (5.6). The largest negative contribution was 3.9 points from Cipla.

The market's breadth was healthy, with advances outnumbering declines 5.95 times on the BSE, and 11.08 times on the NSE. The volume in advancing issues was 94.7% (79.8%) on the BSE, and 97.3% (85.7%) on the NSE, while that in declining ones was 5.2% (12.5%) on the BSE, and 2.6% (13.7%) on the NSE.

The number of most heavily traded 240 stocks at 200-day highs fell from 3 to 2, while the number at 200-day lows remained zero. The number at 5-day highs went up from 158 to 210, while the number of at 5-day lows dropped from 13 to 5. The 240 stocks averaged a gain of 6.05%.

The Nifty opened almost 150 points higher, then declined a little to reach its session low at 1040. It then rallied steadily, reaching its high at 1500 and closing just under its best. The CNX Midcap followed a similar course.

The CNX Midcap crossed its intermediate trigger of 5,406 yesterday to join the Sensex and the Nifty in intermediate uptrends. The Sensex’s July 16 low of 12,514 becomes an intermediate bottom. This is also the level to be breached for an intermediate downtrend signal, as the present rally started from there.

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 96.8 million of stocks on Tuesday, while the MFs acquired USD 92.2 million. The FIIs are averaging daily purchases of USD 20.4 million over the last five sessions, and the MFs are buying at a rate of USD 1.0 million.

Most 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 29.88 points (0.26%) to 11,632.38, and the NASDAQ composite 21.92 points (0.95%) to 2,325.88.

Infosys was up 1.99% at USD 40.02, Satyam rose 0.50% to USD 22.09, Wipro gained 2.80% at USD 11.37, Tata Motors gained 2.28% at USD 10.75, ICICI Bank went up 8.65% to USD 36.82, HDFC Bank rose 6.99% to USD 91.98, Dr Reddy's Labs lost 0.07% at USD 15.33, MTNL rose 2.14% to USD 4.78, Patni fell 1.58% to USD 11.24, Rediff gained 8.13% at USD 6.78 and Satyam Infoway rose 2.98% to USD 3.46.