When they started to sell there was no cushion to support the prices because every one was already on the long side of the market. No one really had resources to further add to their already heavy long positions. When the domestic institutions joined the bandwagon the result was utter chaos. This week, the Brazilian crisis acted as a catalyst for the fall in global markets. The markets in US and UK are enjoying a major bull run and the news of Brazil's currencydevaluation acted as a dampner to the rising markets.

The crisis in Brazil may not have a significant impact on the Indian markets and the way the Indian market has reacted to it, it seems to be an over-reaction. Quite probably, the markets should look up in the coming week. Last week, we had anticipated that the market is likely to rise to around the level of 3,525 points, a level where it could see some correction. The more prominent level of reversal was at 3,590 points. But it was the level of 3,515 points which proved to be the major point of reversal. Still, this level was marginally lower then our targeted level of 3,525 points.

The week saw very volatile conditions. In fact, for short-term trading it is not desirable that the market remains very volatile. It is another thing when the market moves in one direction, either up or down in a consistent manner, and when the market oscillates violently up and down in a matter of hours. A single direction is far more desirable than a two-way movement. Itis easier to make profits in a market condition that has one direction as long as we are able to identify the direction of the market correctly.

During the week the market opened with a huge gap on the upside. The week's opening was at 3,305 points, almost 100 points higher than the close. After a very strong open the market collapsed on Monday itself. Monday's trading formed the `bearish counter attack' line, a very bearish pattern. The market continued its decline in the following days. On the last trading day of the week the index closed below the support level of 3,270 points. The fact that such a crucial level has been broken suggests a bit of panic in the market.

The market is now above the support level of 3,185 points. The market is expected to stabilise at this level. This level is a 50 per cent retracement of the up move from 2,850 points to the recent high of 3,515 points. If the index still moves below the level of 3,185 points the market could decline to around 3,070 points. It is at thelevel of 3185 points we shall look out for reversal signs. It is now expected that the market will hover in a range for next couple of weeks. On the upside the index could find resistance at around 3,525 points and on the lower side it could find support at around 3,185 points. The movement of the index will be restricted within this level for next couple of weeks. The market may remain very volatile in the next few weeks. The indicators have started to decline from their lofty perch.

The MACD (moving averages convergence divergence) is marginally above its trigger line but it has not yet given a sell. The 14-day RSI (relative strength index) has come down from its overbought level. Indicators do not show any major sign of strength. Traders are advised to adopt a cautious approach to trading.

CMC: Good potential

The price of this stock has broken out above the resistance level of Rs 299. The breakout has been with a heavy increase in volumes. In the medium term the price does show a potential torise to around Rs 450. One may buy the stock at currently available price. Though the stock is attracting ceiling limits almost daily it may be possible to buy the stock whenever it is available. One may buy. Keep a stop loss below Rs 299.

Fujitsu ICIM: Buy at current levels

This stock has just broken out of its all-time high of Rs 134. Once the price shows a breakout from its all-time high it means that the price may rise to higher levels. On breakout the price may rise to around Rs 200 in the medium term. One may buy the stock at current levels. Keep a stop loss below Rs 115.

SBI: Good buy at current price

The price of this stock should breakout from its resistance level of Rs 167. The breakout occurred last week itself. During the week the price of the stock is just above the level of breakout. A very safe point at which one can buy. In the medium term the price of the stock can rise to around Rs 220. One may buy the stock at current level. Keep a stop loss below Rs 150.

BHEL: Golong

The price of this stock is just above the support level of Rs 257. One may buy the stock at current price. Keep stop loss below Rs 252.

Telco: Sell short

The appearance of a bearish `dark cloud cover' suggests that the price has run its course. One may sell short at current levels. Keep a stop loss above Rs 223.