Technical Analyst, Deepak Mohoni :

The market rallied on Monday, with the sensex up 123.83 points (0.74%) at 16,860.90, the Nifty 30.05 points (0.60%) at 5,012.65, and the CNX Midcap down 44.80 points (0.66%) at 6,737.65. The biggest positive contributions to the sensex came from Reliance (28.4 points), ITC (21.1), HDFC (18.9), Infosys (15.6), Satyam Computers (15.0), Reliance Comm (11.5), Ranbaxy Labs (9.4), HDFC Bank (8.1), ICICI Bank (7.0), Reliance Energy (6.0) and BHEL (5.9). The largest negative contributions to the sensex came from Grasim (8.5 points), Hind Unilever (5.2), State Bank (5.1) and Jaiprakash Assoc (5.0).

The market's breadth was poor, with declines outnumbering advances 2.10 times on the BSE, and 2.56 times on the NSE. The volume in advancing issues was 64.5% (10.2%) on the BSE, and 57.2% (10.0%) on the NSE, while that in declining ones was 34.8% (86.6%) on the BSE, and 42.0% (89.5%) on the NSE.

The number of heavily traded stocks at 200-day highs went up from 0 to 1, while the number at 200-day lows rose from 4 to 5. The number at 5-day highs went up from 7 to 12, while the number of at 5-day lows dropped from 172 to 125. The 240 stocks averaged a loss of 0.21%.

The nifty opened lower and swung both ways till it reached its low at 1215, after which it rallied steadily to close at the day’s high. The CNX Midcap followed a similar course, but hit its low just after the open.

The sensex breached its intermediate downtrend trigger of 16,589 briefly yesterday. The CNX Midcap index and the Nifty had done so a day earlier. However, all the indices rallied later in the session to above the downtrend trigger levels, and an intermediate downtrend has not really been established.

Global markets have also started to rally after coming very close to entering intermediate downtrends, and the global uptrend may have survived.

The Dow had risen to its highest level for the year during the uptrend, and there is a possibility that a global bull market is on. The next intermediate downtrend should settle the issue of whether a bull market is developing here as well as globally. A short and small decline would suggest that this is so.

For the moment though, most global markets are still in major (long-term) downtrends, which means that a global bull market has yet to be confirmed.

All our indices are also in major downtrends, though the sensex, nifty and CNX Midcap had also closed just above their 200-day moving averages before falling.

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

The FIIs sold USD 91.8 million of stocks on Friday, and the MFs dumped USD 82.6 million. The FIIs are averaging daily sales of USD 73.5 million over the last five sessions, and the MFs are selling at a rate of USD 16.1 million.

Most global indices are still in intermediate uptrends, and the new rally has reduced the threat of a downtrend developing now. Most major trends are still down.

The Dow rose 130.43 points (1.02%) to 12,876.31, and the NASDAQ composite went up 42.97 points (1.76%) to 2,488.49.

Infosys was up 1.56% at USD 43.58, Satyam Computers rose 1.54% to USD 26.42, Wipro gained 1.39% at USD 13.17, Tata Motors gained 0.69% at USD 16.07, ICICI Bank fell 0.61% to USD 42.22, HDFC Bank rose 0.79% to USD 107.71, Dr Reddy's Labs lost 1.77% at USD 14.98, MTNL fell 0.20% to USD 4.99, Patni went up 0.70% to USD 12.90, Rediff.com lost 1.03% at USD 8.63 and Satyam Infoway went up 2.71% to USD 4.93.