Expect some gains today: Mohoni

Technical Analyst, Deepak Mohoni:

European markets were mixed and little changed last night, while the US indices rallied. Asian markets are quite strong this morning, and the global short-term trend has turned up. We can accordingly expect some gains today.

The market declined on Thursday, with the index down 110.97 points (1.21%) at 9,090.88, the nifty 23.00 points (0.82%) at 2,780.05, and the CNX Midcap 11.75 points (0.36%) at 3,268.15. The largest negative contributions to the index were from Reliance Industries (22.7 points), HDFC (17.8), Infosys (15.6) and Larsen & Toubro (12.3). The biggest positive contribution was 3.9 points from Grasim.

The market's breadth was negative, with 1.60 times as many declines as advances on the BSE, and 1.95 times on the NSE. The volume in advancing issues was 34.5% (53.1%) on the BSE, and 32.3% (52.3%) on the NSE, while that in declining ones was 65.3% (46.5%) on the BSE, and 66.1% (46.6%) on the NSE.

The number of most heavily traded 240 stocks at 200-day highs fell from 2 to 1, while 200-day lows rose from 17 to 21. 20-day highs were unchanged at 8, while 20-day lows rose from 40 to 50. 5-day highs fell from 34 to 30, while 5-day lows rose from 81 to 104. The 240 Hotline stocks averaged a loss of 0.45%.

The nifty opened slightly higher, and hit the session high in the first few minutes. It then declined steadily till the low at 1340, before recovering to close some distance above its worst. The CNX Midcap followed a similar course.

The sensitive index and the nifty had both crossed their intermediate uptrend triggers last Friday by a short distance, before reversing downwards again. The CNX Midcap index did not signal an uptrend at all, and global markets are in mixed intermediate trends. The downtrend here is therefore assumed to be still continuing. An uptrend will now be regarded as on if the index crosses 9,438. The equivalent trigger for the nifty is 2,881, and that for the CNX midcap index 3,386.

The global intermediate trend is undefined, with a few indices entering intermediate uptrends before declining. The Dow will enter an intermediate uptrend if it crosses 8,500.

The last 2-3 intermediate tops for many markets (including ours) are roughly around the same levels. A closing above these tops would therefore be a better signal for a bull market than a crossing of the last intermediate top. The Dow would be in a bull market by stabilising above 10,000.

We would be in one if the sensitive index closes above 10,945, the nifty 3,241, and Midcap 3,978. There was no change in the major trend of any of the Hotline stocks yesterday.

The FIIs sold USD 6.0 million of stocks on Wednesday, and are averaging daily purchases of USD 3.0 million over the last five sessions. The MFs bought USD 11.0 million worth, and are averaging purchases of USD 22.7 million.

A few of the global indices had started intermediate uptrends, while the rest have started climbing back towards their trigger levels. All major trends are down.

The Dow rose 106.41 points (1.34%) to 8,063.07, and the NASDAQ composite went up 31.19 points (2.06%) to 1,546.24

Infosys fell 1.03% to USD 26.80, Satyam lost 5.73% at USD 1.81, Wipro was unchanged at USD 6.81, Tata Motors rose 2.83% to USD 4.00, ICICI Bank gained 0.99% at USD 16.35, HDFC Bank went up 2.79% to USD 59.03, Dr. Reddy rose 2.77% to USD 9.27, MTNL went down 1.39% to USD 2.83, Tata Comm gained 1.81% at USD 17.43, Patni went up 0.71% to USD 5.68, Rediff fell 0.53% to USD 1.89, and Satyam Infoway lost 5.73% at USD 1.81.