The market seems to be responding favourably to good news. The possibility of India signing the CTBT has had a bullish impact on the market. The resumption of talks between the Indian prime minister Atal Behari Vajpayee and his Pakistani counterpart Nawaz Sharif also had a bullish impact on the market.

If India and Pakistan can hammer out their differences, it would indeed be the most fortunate thing that could happen to both the countries in decades.

On the economic front, Sebi plans to give additional sops to the FIIs by enhancing the forward cover from 15 per cent to 50 per cent. Foreign broker dealers may also be permitted to operate directly on the stock markets. The moves are largely aimed at attracting foreign capital. Furthermore, the finance minister has virtually agreed on introducing buy-back of shares. It seems that buyback will finallysee the light of the day in the foreseeable future.

We have been anticipating the index moving towards the level of 3,350 points for some time now. The action of the market suggests that the index is not too far from its projected level. The week began on a hesitant note in the first two trading sessions. The index formed a `doji' which set the trend into motion. The market rallied with a bullish fervour in the following sessions. The weekly charts show that the week's trading has formed a long white candle. This is a bullish sign.

Coming back to the daily charts, Friday's trading has resulted in the appearance of a `spinning top'. This is a sign of the market pausing for a breather before resuming its future course. We expect that the market will probably be lacklustre or could decline to around 3,180 points in the initial phase of the next week before ultimately reaching its targeted level of 3,350 points.

The indicators are marginally below their overbought levels and they do not show any signs ofreversal in the trend. The 14-day RSI (relative strength index) is below its overbought level. The MACD (Moving Averages Convergence Divergence) is in a buy mode. The overall market seems to be a healthy state and the index does seems to have a bit of steam left. Traders may choose to be on the long side of the market.

Ipca Labs: Buy at current levels

This stock has been moving in a fairly large band of Rs 100-200 since a long time. During the week the stock has formed a very strong candlestick line which is a very bullish sign. The price also showed a breakout from its resistance level of Rs 160. In the medium term, the stock could show an increase to around the level of Rs 200. One may consider buying this stock at current levels. Keep a stop loss level below Rs 150.

Indian Hotels: Medium-term buy

The hotel industry as a whole seems to be in for better times if the stock prices of this sector are any indication. The year 1999 could very well belong to the hotel industry. In this casethe stock price has broken above the level of Rs 360. The MACD has given a very good buy signal. The stock could rise to around Rs 460 in the medium term. One may buy keep a stop loss level below Rs 360.

Mastek: Good potential

During the week the stock price has broken above its falling trendline giving a buy signal. The volumes have shown a sharp increase. The stock does show a potential to rise to around Rs 350. Keep a stop loss below Rs 345.

Traders Choice:

Larsen & Toubro: Await breakout

Traders may wait for the price to breakout beyond Rs 195 before buying into the stock. The stock could rise to around Rs 210. Keep a stop loss below Rs 189.

Reliance: Buy long

This stock could rise to around Rs 133 in the short term. Traders may buy long. Keep a stop loss below the level of Rs 123.