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K Seshadri
MUMBAI, December 7: The Sensex made a leap to 2922 gaining 72 points. The market has the potential to move up further. The market opened modestly with a gain of just 2 points over the previous close, at 2852. There were gains in almost all the Sensex scrips, except Tata Power.
All technical indicators in the daily chart of Sensex have signalled a buy. Importantly, the long term buy signal too has come on. And this signal has come on when stock prices on important pivotals like MTNL, Larsen & Toubro and many others are still attractive. Even SBI, Reliance Industries and Hindalco fall in the same category. The refinery stocks have been lukewarm for some time. But this is slowly changing with HPCL and Bharat Petroleum reflecting this change in mood.
An all important development has now taken place in the weekly chart. The Sensex has broken upwards of the downslope resistance line. This is the line formed by the peak of 4218 and later 3259 on the downwards travel. The RSI indicator too has crossed over itstrigger line some time back. It continues to be positive. The index has now overcome the resistance of the slope. This has very important implication. The downside fear to the market should now be taken as technically over. Therefore the stage is set for an upward rally of the market.
It is best at this point of time not to worry about the downside risk. Surely no one will dispute that risks are always there in the market. But right now, the market momentum and sentiment appears good. And therefore it is time to be picking up your best choices and investing in them.
Conservatives can still log into Reliance, SBI, Mahindra & Mahindra and Larsen & Toubro. Keep your time span a little longer to get the right focus.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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