All these were very badly battered by the market some time ago, and now they are back with a vengeance. Other stocks like Larsen & Toubro, Tisco, Telco were a few among other major gainers. On the other hand, stocks in the pharmaceutical sector and the software sector were not among major gainers. This time around, it has been the case of laggards scoring over the glamour boys.

The news of an end to the Kargil sector put the market on adrenalin. The pressure on the Pakistani government was a welcome step. Yet, there was no cessation of Pakistani activity. In fact, the media reports suggest that fighting on the border hasintensified. Clearly, the US pressure has fallen on deaf ears, and the Pakistani army has not done much to end the conflict.

Last week, we were of the opinion that if the index breaks above 4200 points, the index could rally to around 4322 points, and in case there is a break below 4087 points, the index can decline. The index rallied past the level of 4200 points and went beyond our targeted level of 4322 points. The market opened with a gap on the up side and continued to rally further.

Usually the gap is regarded as a sign of strength. But in this case, as the prior trend of the index is range-bound this gap may be classified as a common gap. Though the market has shown a rally of around 175-odd points, all the candles in during the trading week have been extremely small candles. The index has shown a tendency to hover in a range of around 4305 to 4375 points in the last four trading.

This cannot be regarded as a sign of strength. The market has also been very selective in deciding what goes up andwhat goes down. This means that if the improper choice of stocks is made, one would not have made any profit worth the name. One, the weekly index shows a white candle. This is a sign of strength not seen on the daily charts. Now notice in the charts what is happening. Remember, last time we had drawn two rising converging trendlines and said that they appear to be a 'rising wedge'.

Now the current week's trading has resulted in the market hovering around the upper rising line (line 1). Also we know that the market has a very strong support at around 4285 points. Thus we have a case where if the index breaks below the support of 4285 points, the index can decline to around 4183 points and if the index breaks above the level of 4385 points, the index can rally to around 4600-odd levels.

The indicators are all showing weak divergence. The current rally has hardly shown a rally above the equilibrium level. One notices a series of negative divergences on the momentum indicators. Both the 12-day ROC (Rate of achange) and the 14-day RSI (Relative Strength Index) has started showing a series of negative divergences. But none of the indicators have given a sell-signal. The MACD (Moving Averages Convergence Divergence) shows divergence but has not yet given a sell signal.

Traders may adopt the level of 4285 as a stop loss point. In case the index breaks below this level, one may choose to consider booking profits in some stocks.

Spic

The price seems to be in midway of an intermediate up trend. The price of the stock can rally to around Rs 40. One may consider buying this stock at current levels for a relative quick move to around 40. Keep a stop loss below the level of Rs 30.

Supreme Industries

The price of the stock shows a break out from a symmetrical triangle. One may consider buying this stock to take quick advantage of a move to around Rs 245 in a matter of weeks. One may buy this stock at current levels. Keep a stop loss below Rs 181.

Philips India

The price of the stock hasbroken above the resistance level of Rs 160 and it can rally to around Rs 175. Once the price of the stock breaks above the resistance level of Rs 175 it can rally to around Rs 200. One may buy the stock at current levels. Keep a stop loss below Rs 150.

State Bank of India: Buy long

The price of the stock has closed above the resistance of Rs 267. Traders may buy the stock at current levels. Keep a stop loss below Rs 165. The target price for the stock is around Rs 185.

Digital Equipments: Sell short

The price of the stock has broken below the support of Rs 428. One may sell short the stock at current levels. Keep a stop loss above Rs 432.