Last week, it was mentioned that the index should stay above the level of 3870 points before a signal for reversal is confirmed. On the eve of the budget the index failed to sustain above this level and the subsequent market action suggested that the downtrend in the index gathered momentum. In Wednesday's article market behaviour post budget was presented. Therein it was mentioned that the index could reach a levelof 3400 points. The behaviour of the market in the following three trading sessions confirmed this view. We know from Wednesday's analysis that the entire downtrend from 4322 points can be contained in a down sloping channel. Now, the Friday's trading session has closed exactly on the lower channel line. Though, there is a small chance that the index may stage a small correction from this point, but before any decision may be taken it is necessary to take into cognisance the surrounding price action. The Friday's trading session was a long black candle. This is a bearish sign. Also slightly below the level of 3400 points the index has a small support level at the level of 3380 points and another one slightly lower at the level of 3300 points. These points are marked on the chart. What we expect that at the above mentioned levels the index may stage a bit of recovery. The recovery could be in a form of either sideways movement or it could be a rather quick up move. The up move could probably stop at the upperchannel line, after which a fresh decline could take place. The indicators are in the oversold zone. The 14-day RSI (Relative Strength Index) is deep into over sold zone. The 12 ROC (Rate of Change) is also in oversold zone. The MACD (Moving Averages Convergence Divergence) indicator is also in the over sold zone and it is still in the sell mode. We are merely suggesting that there may be a short term correction in the downtrend. And once again if the market does rally, it is still not the time to expect the market to stage a long term up trend.

Pentafour Software: Book profits

Appearance of a bearish evening star in this stock suggests that the stock could stage a decline. The current week's trading formed a big black candle. This pattern is as bearish as it can get. The 14- week RSI is in the overbought zone and it is showing negative divergence. The stock could decline to below Rs 700 levels and is therefore advisable that the investors may book profits.

GIC Housing: Worth buying

Thecurrent budget has presented a package of goodies for housing finance companies. This stock has been responding, albeit slowly to the changed environment. The stock has been rising on increased volumes. The weekly MACD is in a buy mode. The stock faces resistance at Rs 31 and once this level is surpassed the stock could rise to higher levels. Investors may consider buying this stock at current levels for a short term target of Rs 31. Once this level is surpassed investors may consider adding position. One may consider buying. Keep a stop loss level below Rs 20.

Hero Honda: May decline

This stock is plotted on a semi-log scale. Notice in the chart that the stock has penetrated below its one and half year old rising trendline. This suggests that the stock is poised for a decline. The weekly MACD is in a sell mode. There is a distinct possibility that the stock may decline to around Rs 750. One may consider booking profits.

Telco: May fall

This stock broke below its previous low of Rs 217.The stock could decline to around Rs 180. One may sell short at current levels. Keep a stop loss above Rs 217.

Thermax: Play safe

In last two trading sessions of the week the stock formed a 'inverted hammer' followed by a star. These patterns suggest that the selling pressure may be diminishing. Traders' may consider buying at current levels. The stock may rise to around Rs 200. Keep stop loss below Rs 164.