BULLS SALUTE THE BUDGET, BEARS RUN FOR COVER - 05/03/2010.

MARKET SALUTES THE BUDGET.

SHORT TERM UPTREND.

TECHNICALLY SPEAKING.

INDEX LEVELS.

lAST WEEKS RECOMMENDATIONS.

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BULLS SALUTE THE BUDGET, BEARS RUN FOR COVER - 05/03/2010.

MARKET SALUTES THE BUDGET.

Call it an after effect of the booster doze given by the FM, the market simply went from strength to strength during the course of the week. The Budget was analyzed in depth over the last weekend and the market came to terms that this was a landmark Budget which had the strength to change the direction of the market movement. Market was particularly happy as the FM laid down the fiscal roadmap to rein in the fiscal deficit. The journey up was ably aided not only by fresh buying but also by strong short covering by the bears; not to mention renewed buying by the FIIs and the strong global markets.

SHORT TERM UPTREND.

Bulls made sure the market closed above the critical resistance levels for the week. The market managed a strong close not only above the 50dma but also above the 61.8% retracement of the current fall (Sensex – 16973 and Nifty- 5067). Bullish Inverted Head and Shoulders pattern accompanied by the bullish Three White Soldiers signaled a trend reversal from down to up. Thus the short as well as medium term trend has changed from down to up.

TECHNICALLY SPEAKING.

The Sensex opened the week at 16438, made a high of 17097, a low of 16438 and closed the week at 16994. The Sensex closed the week with strong gain of 565 points. Similarly Nifty opened the week at 4935, made a high of 5118, a low of 4935 and closed the week at 5088. The Nifty too closed with the week with a strong gain of 166 points.

Both the indices formed a big body Opening White Marubuzo on the weekly charts which is indicative of the strength shown by the Bulls during the course of the week. On the daily charts both Sensex and Nifty completed a Bullish Three White Soldiers by Wednesday which is a Bullish Reversal Candlestick pattern, thus signaling a short term uptrend.

The pull-back levels of the recent fall of the Sensex (17790-15651) and Nifty (5310-4675) were placed at 16468-16721-16973 for the Sensex and those for the Nifty were placed at 4918-4993-5067. This week both Sensex and Nifty managed a close above the 61.8% retracement and as a result the short term retracement or correction is over and once again the short to medium term uptrend resumes.

The short and medium term trend has turned up as the Sensex and Nifty managed a close above the critical 50dma and 100dma. Sensex (50dma – 16789 and 100dma – 16807) and Nifty (50dma – 5017 and 100dma – 5009) are almost coinciding and the market will find support in case of a fall around Sensex 16800 and Nifty 5000. The long term uptrend remains intact as the market remains above the 200dma (Sensex – 16008 and Nifty – 4772).

Last week both the indices formed a Bullish Reversal pattern known as Inverted Head & Shoulders pattern. As a result of this, the short and medium term trend has changed from down to up and the Sensex will now have a target of 17319 and Nifty 5189.

Nifty OI PCR is quite bullish at 1.44, which is indicative of the strong bullish mood that the market is in. Call writing is seen at 5100 and 5200, which supposedly should act as resistance going forward.

For the week ahead, Sensex will find Support at 16777-16577-16434 and will find Resistance at 17195-17493-17735.

For the week ahead, Nifty will find Support at 5016-4943-4889 and will find Resistance at 5148-5182-5238.

INDEX LEVELS: 

LAST WEEKS RECOMMENDATIONS:

We hit Bulls Eye as all the targets were achieved with ease. Our readers must have made tons of money in the week gone by. The star of the previous week was Sesa Goa which went up by an astonishing 15% !!! 

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