THE stock indices finished practically unchanged for a second successive week, with the Sensex ending 0.33% or 64.63 points lower, and the Nifty 0.30% down. The CNX Midcap Index gained 0.36%.
Hero Honda was the biggest winner among index stocks with a 10.1% gain. The other index stocks to rise included Jaiprakash Associates, ITC, Larsen & Toubro and Bharti Airtel with gains between 4.9% and 2.8%.
Infosys was the biggest loser among index stocks with a 7.4% loss. The other index stocks to fall included DLF, Jindal Steel & Power, Wipro and Reliance Communications with losses falling between 5.6% and 1.8%.
DCB was the biggest winner among the more heavily traded nonindex stocks with an 18.9% gain. The other non-index stocks to go up included Everonn Education, Arvind, Bhushan Steel, Indiabulls Real Estate, Delta Corp, UCO Bank and Jubilant FoodWorks with gains between 13.1% and 4.2%.
Kwality Dairy India was the biggest loser among the more heavily traded non-index stocks with an 18.2% loss. The other nonindex stocks to go down included Acropetal Technologies, Fineotex Chemical, Gravita India, ARSS Infrastructure Projects, Atlanta, Unitech and United Spirits with losses falling between 11.6% and 4.3%.
INTERMEDIATE TREND:
The market?s intermediate trend is still up, despite the few recent declines. The levels below which a downtrend would be signalled are best taken as 19,100 for the Sensex, 5,725 for the Nifty, and 8,175 for the CNX Midcap. (Figures are rounded down to the nearest 25). The uptrend started with the Sensex?s March 21 bottom of 17,792. Quite a few global markets are now in intermediate downtrends, though the Dow is still not in one.
LONG-TERM TREND:
Our market?s long-term (major) trend is up, which means that a bull market is on. It started from February 11 when the Sensex bottomed out at 17,296. Several bull market signals have been triggered. The Sensex, Nifty and the CNX Midcap Index are above their last intermediate tops. The Sensex and the Nifty are above their 200-day moving averages.
The same is being seen in an increasingly large number of stocks, with around 40% of the more heavily traded stocks above their longer-term average. About 30% of the more heavily traded stocks are above their last intermediate tops.
TRADING & INVESTING STRATEGIES:
Existing portfolios should be held on to as we are in a bull market now. Even the more volatile stocks are somewhat safer, as the bull market has reduced the downside risk. Further investments should now be made after an intermediate downtrend is triggered and runs for a week or more.
GLOBAL PERSPECTIVE:
Over half of the global markets are now in intermediate downtrends. The Dow will fall into a downtrend should it decline and remain below 12,140.
Most global markets are also in bull phases. Japan and Brazil are among the very few important markets that are in bear phases. The Dow would go into a major downtrend if it were to breach 11,500.
The Sensex has gained 11.7% in the twelve months that ended on Wednesday, up five positions to the 12th place among 35 well-known global indices considered for the study. Sri Lanka continues to head the list with a 91.5% gain. Argentina, Indonesia, South Korea and Chile follow. The Dow Jones Industrial Average has gained 10.2% and the NASDAQ Composite has gained 9.7% over the same period. (These rankings do not take exchange rate effects into consideration).
(The author is an independent technical analyst)