Column

Sensex (15138.4): The price action during the week was marked by the continuation of the corrective phase and there are no signs of completion of this trend, yet. The index recovered ground right at the support zone of 14800-14900 mentioned last week. The index could test the crucial bearish trigger level of 14500.

A close below this level could lead to a prolonged corrective phase. The Sensex has to close above 15815 for the resumption of the uptrend and the index could then move to 16300-16400. Though there are no signs of completion of the short-term corrective phase, there are no indications of the reversal of the long-term uptrend either. Such a signal would be triggered if the index closes below 14500.

Nifty (4401.55): A bearish trend prevailed as was anticipated in the previous week. The price action during the week was marked by a high degree of volatility. The price movement during the week is indicative of sustained bearishness from a short-term perspective. The index faces stiff resistance at 4550-4560. As observed last week, the index has to close past 4625 before any sustained uptrend can take shape. Investors need to remain cautious and may use any price uptrend to reduce exposures.

CNX Bank Index (6850.6): The index was confined to a narrow trading range during the week. This has not, however, negated the short-term bearish view featured last week. The index is on course to test the major support level at 6440-6460. This view would be validated on a close below 6600.

The immediate resistance is at 6900-6920; the trend would turn positive on a close above 7145. Based on the recent price pattern, a test of the support at 6440-6460 is the favoured view.

Key pivotals:
Larsen & Toubro (Rs 2,520): The stock is in a corrective phase to the earlier rally. This corrective phase does not appear complete as yet. A drop to Rs 2,300-2,330 appears likely. This view would be valid as long as the immediate resistance zone at Rs 2,700-2,725 range is not breached. Investors may use price rally to reduce exposures.

A close below Rs 2,300 would push the stock into a deeper corrective phase. Long-term investors may have a stop loss of Rs 2,290 on a weekly closing basis.

BHEL (Rs 1,723): The price movement was in line with expectations and a bearish trend prevailed during the week. The stock moved closer to the support zone of Rs 1,550-1,575 mentioned last week. The short-term outlook remains bearish and the stock could test the crucial support range mentioned above.

Remain invested with a stop loss at Rs 1,650 and pare exposures on rally. Only a close above Rs 1,850 would reinstate bullishness.

ACC (Rs 1,004): The stock moved to the resistance zone of Rs 1,060-1,080 and turned weak subsequently. The inability to move past the bullish trigger level of Rs 1,100 is indicative of underlying weakness. The trend would remain bearish as long as the stock trades below Rs 1,100. As long as this level is not breached, there would be a possibility of a drop to Rs 900-910 range.

Stock of the week:
IFCI (Rs 60.7): The stock is in a major uptrend and has been among the top performers over the past few months. The recent price action indicates that there is upside potential from prevailing levels. There is a possibility of the stock moving to the immediate target ofRs 72-75. This view would be valid as long as the support at Rs 52 is not breached. Long positions may be considered at prevailing levels, as well as on weakness, with a stop loss at Rs 52.

(Note: The analysis and views expressed in this column are based on the technical analysis of historical share price action. There is a risk of loss in trading. Views and targets are arrived at by using the Elliott Wave Theory and Point & Figure technique. The author does not have investment exposure in the stocks discussed above

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