The Telegraph
Since 1st March, 1999
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Last Week

I anticipated a continuation of the bounce but certainly not of this variety. Just 15 points after a huge global rally and a raft of excellent results from both old economy (Asian Paints, Housing Development Finance Corporation) and new economy (Mastek, Infosys Technologies)' That gets me thinking. These are usually advance signals. There are times when the market goes up in the face of bad news — it’s a clear sign of bullishness.

Then there are times when it fails to respond to even a bunch of good news. That is a bearish signal. Could it be that just when everybody is complacent that Ms Market is preparing to inflict another nasty blow'

This is a confusing period and for the first time in many months I don’t have a forecast. I have an equal number of positives as negatives to juggle with, though I will be firmly in the bearish camp if the sensex persistently closes below 2995 and ends in that territory on Friday.

The downward trigger for the nifty is 970. As you can see we are not too far from these levels.

Through the week the market really struggled to stay above these levels rising on hopes and getting slammed on the head by some persistent selling by the FIIs. What if the market stays above these levels'

Sensex will have to cross 3040 after which it should be a clear run to 3100. What will keep the market up' I usually try not to guess this. It is futile. Look at the moves many key stocks made in the last few weeks.

I could never have guessed that Infosys will run from 2900 to 3900 or Dr Reddy’s and Cipla will simply crack 13 per cent and more. Still, for whatever its worth, I feel the only triggers for the market currently are better results by ITC and Hindustan Lever Limited and Reliance (unlikely to create a run in the stock even then).

If these results are not good enough or if the market fails to respond to their performance, we see a sell off. I am neutral to either possibility, letting the market signal where we are headed. Technical analysts are talking of buy above 3040 and sell below 2930.

My range is 3040 and 2995. We are approaching a seasonally good year for stocks and it could well be that institutional investors think that corporate results were quite good after all and that the Indian market is “cheap”.

Movement of Indices

       Sensex       BSE 200       BSE 500       S&P CNX Nifty       S&P CNX 500

One year ago       2981.33       302.48       890.81       972.05       615.35

One month ago       3069.78       361.60       1080.55       983.60       706.75

One week ago       2995.77       362.10       1079.26       971.05       707.75

Oct 14       3003.39       361.60       1077.57       972.45       706.55

Oct 15       Closed       Closed       Closed       Closed       Closed

Oct 16       2994.99       360.26       1073.57       973.30       704.95

Oct 17       3006.14       360.85       1075.32       973.30       704.95

Oct 18       3009.76       362.43       1079.90       971.65       708.10

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