Technical Analyst, Deepak Mohoni : European markets declined on Thursday, while the US indices made a strong move. All European and American stock and commodity markets were closed on Friday. Most Asian markets are up this morning. Hong Kong is closed, and the Nikkei has a moderate gain. We could expect some gains today as a result.

The main indices rallied on Wednesday, with the Sensex up 161.37 points (1.09%) at 14,994.83 and the Nifty 40.95 points (0.90%) at 4,573.95. However, the CNX Midcap fell 13.60 points (0.23%) to 5,847.70. The biggest positive contributions to the Sensex came from Larsen & Toubro (28.8 points), Infosys (20.4), Bharti Airtel (19.1), Satyam Computers (18.0), ITC (16.0), HDFC Bank (15.9), Reliance (14.5), Tata Motors (10.6), Reliance Comm (9.5), Wipro (7.1), Mahindra (6.4) and BHEL (6.1). The largest negative contributions to the Sensex came from Hind Unilever (9.1 points), Hindalco (8.3) and Reliance Energy (5.1).

The market's breadth was poor, with declines outnumbering advances 2.67 times on the BSE, and 2.27 times on the NSE. The volume in advancing issues was 26.6% (32.3%) on the BSE, and 35.1% (41.6%) on the NSE, while that in declining ones was 72.6% (66.1%) on the BSE, and 63.2% (58.1%) on the NSE.

The number of heavily traded stocks at 200-day highs remained zero, while the number at 200-day lows dropped from 37 to 34. The number at 5-day highs went up from 4 to 13, while the number of at 5-day lows dropped from 141 to 118. The 240 stocks averaged a loss of 0.97%.

The Nifty opened more than 150 points higher, but hit its session high immediately and declined steadily till its session low at 1515 and closed marginally above that level. The CNX Midcap followed a similar course, but ended the day in the red.

The intermediate downtrend that began on Feb 4 with the Sensex at 18,895 has still to end. The Sensex will have to cross 16,683 to begin a new intermediate uptrend. The corresponding level for the Nifty is 5,019, and that for the CNX Midcap Index stands at 7,019.

All the important global indices are also in intermediate downtrends. The Fed’s 0.75% rate cut has helped the US market more than the others so far. However, it is still too early to say whether an intermediate uptrend could develop now either in the US or elsewhere.

All our indices are in major (long-term) downtrends, with falling intermediate tops and bottoms.

A major downtrend is in effect a bear market, and all the better known global indices are also in one at this time, with many falling to their lowest levels in a year or more during the present decline. The Sensex has to close above its last intermediate top of 18,895 to be start a new bull market. The corresponding level for  the Nifty is 5,545, and 7,814 for the CNX Midcap index.

The major trends of Hind Construction, Godrej Industries and Karuturi Network have turned down.

The FIIs sold USD 170.5 million of stocks on Tuesday, while the MFs acquired USD 16.1 million. The FIIs are averaging daily sales of USD 73.3 million over the last five sessions, and the MFs are selling at a rate of USD 61.1 million.

All the main global markets are still in intermediate downtrends. Their major trends are also down.

The Dow shot up 261.66 points (2.16%) to 12,361.32, and NASDAQ composite 48.15 points (2.18%) to 2,258.11.

Infosys was up 1.50% at USD 33.88, Satyam Computers 1.66% at USD 22.00 and Wipro 4.00% at USD 10.66. Tata Motors slipped 0.38% to USD 15.85, ICICI Bank went up 1.21% to USD 35.95, HDFC Bank rose 2.58% to USD 94.37, Dr Reddy's Labs lost 1.92% at USD 13.29, MTNL rose 0.41% to USD 4.90, Patni went up 3.75% to USD 11.35, Rediff.com gained 4.80% at USD 6.98 and Satyam Infoway was unchanged to USD 4.00.