October 6: The performance of the market on Monday should bring back quite some cheer to the marketmen. The much feared bear hammering has not happened on Monday.

Last Friday stock prices nose-dived during the closing hours. For traders had to compulsorily square off their positions, in the absence of the facility to transfer positions in excess of what is allowed to individual brokers on scrip wise as well as total trade at the BSE.

Those trapped at the NSE had much to worry about, as the bears could have continued their operation. That would have been quite easy as there was no possibility of intra-day arbitrage. But that did not take place.

Many scrips were able to post small gains on Monday. And losses in others were limited. One could see signs of values stabilising. This sends an important signal.

The signal is that it is dangerous to press sales down further, for values could revert before the close of the week. Sure, one does not know at the moment when trading at NSE would resume.

May be Wednesday, may be not. But one cannot rule out the possibility of trading beginning before Friday. If the scrips were oversold, they would bounce back double fast, especially when NSE starts operation.

However, no one knows how would NSE sort out the outstanding positions. For with depreciated values short sellers stand to gain, if they are allowed to continue the session. Possibly, all trades of the last week could also be nullified, considering the inequity between bulls and bears.

The sensex opened on Monday at 3850.35 which was higher than the previous close of 3847.73. The day's high at 3862.17 was 29 points above the previous high. However, the low at 3829.05 was 4 points lower than the previous low of 3833.92. It is the closing which sends positive signs.

The market closed with the sensex at 3857.34, a clear 10 points higher than the previous close. Several scrips like ICICI, Indian Hotels, IPCL, Larsen & Toubro, Mahindra & Mahindra and Tata Power are showing bullish signs.

Reliance and SBI are weak but not eroding much. The support at the support lines shown in the graph is at 3782. The 10-day exponential moving average is at 3884.86.

Right for the moment the market is looking up and it should be profitable for traders to go long at prices corresponding to the sensex level 3822-3829 level.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.