Uptrend To Continue
The indices ended last week with minor gains but managed to
close near the highest point above the psychological levels of
17000/5000. The level of 17100 repeatedly provided resistance
and triggered a quick 500-point decline that was healthy for the
uptrend. The technical set-up continues to be strong hinting at
a move above 17100/5074 early this week. Once confirmed the
markets would not take much time to test the Oct 09 highs and
even move closer to the next major resistance area of 18000-
18300/5270-5300. The trading base remains in the form of
16600/4900 and any decline close to the same should be used
as a buying opportunity. The technical oscillators are yet to see
any divergence on the short-term charts, which only means
that the positive momentum is intact and should lead to a
“higher high” on the price action. Given the strong uptrend, the
moving averages would continue to play a crucial role going
forward by providing support during any and every correction.
We maintain our long-term target of 7000/23000 that should be
tested in the second half of next year. The Banking, Oil&Gas,
Capital Goods and Mid-cap sectors are likely to outperform.
The DOW (DJIA) looks on course for 11K in the near term.

Patterns – The Completion of “V”

The minor “Double Top” bearish pattern that had developed on
the hourly chart in the middle of last week saw its target of
4930 being achieved last Friday. The set-up is much cleaner
and stronger now as the indices resume their “V” shaped
reversal process that should lead to 17500/5170 this week. A
new bullish “Engulfing” pattern can also be spotted that would
restrict downside in the near term.

Neyveli Lignite – Star Performer

The stock has confirmed a major medium-term breakout in the
last couple of weeks that should lead to super normal returns
over the next couple of months. A move beyond 200 can be
expected with downside capped to the 135-140 zone.

ITC – Selling In Injurious To Financial Health

The stock is likely to begin the next big phase of its mediumterm
uptrend that should lead to a move towards 300 in the next 4-6 weeks with stopover around the 277 mark.