The passage of the insurance bill received a serious setback as the left parties stalled the proceedings. The Congress, which has no visible arguments against the bill, sought more time to discuss and deliberate on the bill. It appears that at least for the time being the bill may not see the light of the day. An unwarranted delay in implementing key legislatures is severely restricting the overall development process. The bombing of Iraq by US was headline-grabbing news during the week. The US attack has notreceived much favour from the international community. The situation now is much different than what it was in 1992 when the US had solid backing from its allies. This time round, only the UK is its main supporter. One seriously hopes that a peaceful end to the armed conflict is found quickly.

Last week, we expected the market to show a small decline if the index failed to move above the resistance level of 3,027 points. The index failed to rise above this level convincingly on Monday and as time elapsed it became certain that the market was becoming vulnerable to selling at this level. On the whole, the index just did not have the strength to rise to higher levels.

The appearance of a black candle on Monday suggested that the market was getting weaker. The `doji' that was formed last Friday did after all show its negative effect. The current week's trading highlighted the fact that the market can react adversely to unforeseen events. Thursday's trading was a fine example. On Thursday, (following a strongup session on Wednesday), the market opened with a gap on the downside and the recovery in the intra-day session was shortlived as the market collapsed in last hour of the day's trading.

Traders are of the notion that a strong close is usually followed by a strong or higher opening on the following day. The tendency is to buy on a strong close and liquidate on the following day's opening prices. But this time this strategy would have not worked. Friday's trading session was again a `doji'. This was contained within the prior session's black candle, thus forming the bullish `harami cross' pattern. As the lows of both the days were nearly similar the pattern was also a `tweezers bottom'. The appearance of this pattern was near the level of 2,850 points. This point in the index is almost equal to the .618 per cent retractment level of the upward move from the low of 2,740 points to the recent high of 3,029 points. The appearance of a bullish pattern at such a crucial point suggests that the market may stage arally in the forthcoming week. Before acting on the bullish view it is better that one waits for a strong open on Monday or for the index to show a higher close. Indicators are showing conflicting signs.

The MACD (moving averages convergence divergence) is marginally below its trigger line but still above its equilibrium level. The 14-day RSI (relative strength index) is also below its equilibrium level. Under the circumstances, indicators are not reliable forecasting tools. It is expected that once the index manages to move above the level of 2,944 points it will again try to test the level of 3,027 points. Traders may choose to be on the long side of the market. In the event the index breaks below the level of 2,850 points, caution on long positions may be exercised.

Cadbury: Buy at current levels

This stock showed a breakout beyond its declining trendline. The breakout has been with a very good increase in volumes. During the week the stock touched its all-time high before declining a bit. Atcurrent levels the stock becomes a very good buy. This is because if the stock does manage to rise beyond its all-time high the move upwards could be extremely fast and violent. One may consider buying the stock at current levels. Keep a stop loss below Rs 400.

ITW Signode: Medium-term buy

This stock has failed on several occasions in the past to rise above the level of Rs 84. One can expect a fairly strong move if the price manages to stay above this level for some time. In fact, in the previous week the stock price again failed to sustain itself above the level of Rs 84 as it quickly moved down after touching a high of Rs 97. At current levels the stock does seem to offer a rise to around Rs 120 in the medium term. One may consider buying this stock once it rises above Rs 84. Keep a stop loss below Rs 73.

Satyam Computers: Good buy

During the week the stock price managed to shoot past the recent high of Rs 613 and it is in a new price zone. The stock does show a potential to rise toaround Rs 750 in the medium term. One may buy. Keep a stop loss below Rs 613.

Glaxo: Go long

The stock is around its support level of Rs 595. One may buy long for a targeted price of Rs 630. Keep a stop loss below the level of Rs 590.

State Bank: Go long

This stock has formed a bullish `harami cross' pattern near its support level of Rs 150. One may buy with a stop loss below Rs 145.