The Sensex opened at the 3,106, and moved between a high of 3,169 and low of 3,037 before closing at 3,167 - a gain of 52 points.
The combined weekly advance-decline ratio was 5,908:3,531. While the value of advancing shares was Rs 11,260 crore, declining shares totalled Rs 5,340 crore.
This indicates a clear buying trend. Only 16 per cent of the weekly volumes were transacted on down-tick days, which makes for a firm trading pattern.
The week that was
The markets opened on a weak note as the war news was taken pessimistically by the players. As the international opinion veered around to involuntary acceptance of a prolonged war, the sentiment improved.
Falling crude prices and weak bullion and bond prices also played a part in aiding sentiment. As the news of allied advances towards Baghdad trickled in, the mood changed substantially on the back of the rising US markets.
Oversold counters saw a corrective rally on short-covering, and the trend was prominent in technology stocks.
Likely triggers
The major short-term trigger for the markets continue to be the geo-political situation in the Gulf. The markets will continue to be news-driven.
Should the war end within the next fortnight, the markets may see a cheering upward movement in the absolute short term.
The earnings season, which is just around the corner, will add to speculative activity on select counters.
The markets are running on sentiment and news. Pin-pointing directions, therefore, with mathematical accuracy will be difficult.
In short, should the news on the Iraq front be steady and devoid of any negatives, expect the markets to be firm. Don't expect a runway rally due to the rising tensions on the Indo-Pak border.
Derivatives check
The derivatives segment saw action on select counters as the pullback rally unfolded after Tuesday. Technology stocks saw saturation as buying frenzy saw counters hitting over 60 per cent of the entire permissible limits.
The stocks and their limits reached were as follows - Digital ( 92 per cent), Mastek (88 per cent), NIIT (76 per cent), Satyam (77 per cent), SCI (63 per cent) and Tisco (63 per cent).
Similarly, open interest declined on may counters like BHEL, BSES, Digital, Infosys, ITC, M&M, Mastek, NIIT, Satyam, Shipping Corp, Tata Tea and Tisco.
The overall outstanding in the futures segment stood at Rs 1,312 crore.
Technicals
The daily bar chart of the Nifty shows an upward momentum on the price graph, and short-term oscillators will support the rally in one-two sessions.
However, the overhead resistance by the 200 & 30 day SMAs will be a formidable hurdle. It may also be noted that the low made on Tuesday ( April 01, 2003) is lower than the previous low of 982 made in March 2003.
Therefore, it would be logical to assume that the previous top of 1,040 be surpassed before a trend reversal can be confirmed. If the index is unable to surpass the 1,040-level, expect a bigger fall in the index.
We advocate short-term bullishness on the Nifty up to the 1,025-level. Thereafter, it should be wait-and-watch till the 1,040- level is surpassed.
Your call of action
The markets may rally further if positive developments emanate from the Gulf war. Any aggressive bullish approach should be avoided till the markets don't signal a conclusive upward movement.
Trade on thin volumes with strict stop-losses. The technology sector will be particularly volatile and should be traded with absolute caution till their Q4 results are announced.
Have a profitable week.
Vijay Bhambwani, CEO of Bsplindia.com, is a Mumbai-based investment consultant. Sebi Disclosure: The author has no positions in the stocks mentioned above.
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