I had referred to these clusters in an earlier write up in this column. The stochastic indicator on the daily chart has singalled a buy, given the recovery of 82 points. However the RSI, the indicator for a long-term approach to stock buying, will wait for some more confirmation before the signal turns green.

On the weekly chart both the stochastics as well as the RSI are still below their trigger lines.

Quite possibly the turn upwards could continue. A fair number of scrips have firmly turned bullish going by the technical indicators. These are ACC, Bajaj Auto, Arvind Mills, BSES, Colgate, Glaxo, ICICI, ITC and Telco. Of these ITC and Telco need little more confirmation.

Indian Hotels, IPCL and Mahindra & Mahindrahave given a signal for long-term investors. Many other scrips in the Sensex list have recovered and they have also turned positive in terms of the daily stochastics. This means that they are profitable for trading. This list includes MTNL, Bhel, Reliance and SBI amongst others.

Technical indicators look for certain statistical confirmation. This confirmation has come for the purpose of day-to-day trading opportunity via the Sensex indicator. Coming to individual scrips, the gains have been handsome and quick on several counters. So the investor has now to decide the kind of risk he is prepared to take. Risks can never be eliminated.

However, since the market is turning up after quite a dip, the rewards could be better than the risks. Look over your entry prices carefully.