We could be in for further gains today

Technical Analyst, Deepak Mohoni :

The market rallied on Thursday, with the Sensex up 536.05 points (4.26%) at 13,111.85, the Nifty 130.50 points (3.42%) at 3,947.20, and the CNX Midcap 94.95 points (1.92%) at 5,046.05. The biggest positive contributions to the Sensex came from Reliance (74.8 points), Larsen & Toubro (65.5), HDFC (59.5), ICICI Bank (51.5), State Bank (37.0), Infosys (25.1), ONGC (23.5), HDFC Bank (22.7), ITC (19.9), Reliance Comm (19.7), TCS (18.6), Satyam Computers (18.3), Bharti Airtel (18.0), BHEL (17.9), Jaiprakash Assoc (12.9), DLF (12.5), Maruti Suzuki (11.0), Reliance Energy (9.2), Hind Unilever (7.0), Mahindra (5.9) and Tata Motors (5.5). The largest negative contributions to the Sensex came from Tata Steel (13.7 points) and Ranbaxy Labs (7.1).

The market's breadth was healthy, with advances outnumbering declines 1.47 times on the BSE, and 1.97 times on the NSE. The volume in advancing issues was 70.0% (19.7%) on the BSE, and 78.9% (20.0%) on the NSE, while that in declining ones was 29.0% (79.2%) on the BSE, and 20.7% (79.9%) on the NSE.

The number of most heavily traded 240 stocks at 200-day highs went up from zero to one, while the number at 200-day lows dropped from 40 to 10. The number at 5-day highs went up from 2 to 34, while the number of at 5-day lows dropped from 174 to 39. The 240 stocks averaged a gain of 2.51%.

The Nifty opened around a hundred points higher, but hit its session high right away. It then declined to reach the session low by 1055, before climbing back to close a little under its best. The CNX Midcap followed a similar course.

The Sensex breached 13,050 on Tuesday to trigger off an intermediate downtrend. The Nifty and the CNX Midcap followed suit by going below 3,896 and 5,072, respectively. This means that the Sensex’s July 11 intra-day high of 14,066 has been established as an intermediate top.

The July 11 highs are also the levels to be crossed for the market to get back into an intermediate uptrend. The corresponding levels for the Nifty and the CNX Midcap are 4,216 and 5,406 respectively.

Those levels will also be the levels for a bull market to be signalled, provided that the downtrend that has just been signalled runs a normal course and does not bottom out far too soon.

The NASDAQ composite is in an intermediate uptrend now, while other global indices are in downtrends. The Dow is also close to starting an uptrend.

The Dow, Shanghai, and the European indices have made lower intermediate bottoms during the current downtrends. The NASDAQ, Hong Kong and Tokyo have managed to hold out until now.

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

The FIIs sold USD 52.2 million of stocks on Wednesday, and the MFs dumped USD 7.8 million. The FIIs are averaging daily sales of USD 87.2 million over the last five sessions, and the MFs are selling at a rate of USD 10.0 million.

Most global indices are still in intermediate downtrends despite the intermittent rallies. They remain in major (long-term) downtrends.

The Dow rose 207.38 points (1.85%) to 11,446.66, and NASDAQ composite 27.45 points (1.20%) to 2,312.30.

Infosys was up 1.48% at USD 39.74, Satyam 3.58% at USD 23.46 and Wipro 1.18% at USD 11.11. Tata Motors gained 3.48% at USD 10.11, ICICI Bank went up 9.47% to USD 29.02, HDFC Bank rose 6.95% to USD 75.55, Dr Reddy's Labs gained 4.53% at USD 15.70, MTNL fell 1.07% to USD 4.62, Patni went up 4.08% to USD 11.58, Rediff.com gained 0.68% at USD 5.89 and Satyam Infoway went up 1.53% to USD 3.31.

The Hang Seng rose 511.22 points (2.41%) to 21,734.72, and the Nikkei went up 127.15 points (1.00%) to 12,887.95.