What is most appealing about these stocks to many investors is that the prices of these stocks are showing a good ability to bounce back all that they have lost. And the bounce-back is quick. Thus, when one is losing money, there is always that sort of a comfort feeling that the prices are going to bounce back to higher levels whenever there has been a significant loss in the value of the stock.

For example, Zee TV had lost almost 25 per cent of its value in from its high of Rs 1312, but the price of this stock has again rallied in a mater of two weeks. This is the comfort level of this stock. Tradershave that confidence in the stock that there will be an exit available in future and one does not mind to hold the stock for a long time. Compare this with what is happening in some cyclical stocks.

Due to the slackness in this sector, once the price loses a particular percentage of value, it just takes too long for the price to come back to its original value. The market is now getting ready for the budget. The expectations are just simple, but far-fetched. No body wants new taxes. If the budget contains any proposals that the market considers, then there is going to be a lot of selling. Also if the goodies given out to the software sector are not seen as enough, then also there could be a severe selling pressure.

Last week, we were of the opinion that the market will see a sideways movement in the range of 5668 to 5184 points. The market very well held in that range. The index showed a tendency to move in a range and the high and low for the week were 5665 and 5330 points. On the weekly charts, theindex has formed a black candle and as the high of the week and that of the previous week were nearly the same. This gives rise to a bearish pattern known as the 'tweezers top'. There were two back-to-back long black candles and thus, we also have a pattern known as 'two black crows'.

The bearish patterns do not mean that the market will reverse direction; It may, but most likely, the market will remain sideways for some more time. The index is moving in a very wide range and it is likely that the range of the market is also very wide. The only way one can deal with the situation is by buying into the market at higher levels and then selling at lower levels. Traders should also adopt a hit-and-run attitude.

It is far more comfortable to take smaller profits rather than wait for the market to show a rally for three or more consecutive days. This is because the market is likely to quickly reverse directions once it reaches some resistance or support levels. In other words, in the current scenario, there isan equal balance of supply and demand. This is what is making the market move in a sideways range.

The 14-day RSI (Relative Strength Index) is just below its overbought level and the MACD (Moving Averages Convergence Divergence) has reversed to sell mode. The market is most likely to move sideways for some time and traders should be careful for some time as the volatility is likely to remain high.

Pentafour Software
The price of the stock has formed a long candle during the week, suggesting a continuation of the up trend. The price may see a rally to around Rs 1750 in the medium one may buy the stock at current levels for a rapid rally to Rs 1750. Put a stop loss below Rs 1237.

Zee Telefilms
The price of this stock has shown a major reversal in trend once it moved above the crucial resistance level of Rs 1099. The price of the stock may rally to around Rs 1300 in the medium term. The price may see a rally to around Rs 1500 in the medium-term. One may buy the stock at current levels.Keep a stop loss below Rs 1099.

Silverline
The price of this stock may see a rally to around Rs 1200 in the medium term as the current week's trading resulted in a long white candle. This is a bullish pattern and the price may see a quick a rally. One may buy the stock at current levels. Keep a stop loss below Rs 707.

Digital Equipments: Buy long
The price is moving in a range of Rs 1575 to Rs 1503 since a last couple of days. The price may see a quick rally to around Rs 1675, in the forthcoming week. Traders may buy the stock at current levels and keep a stop loss 1495.

Bajaj Auto: Sell short
The price of the stock is likely to show a decline to Rs 349 in the short term. Traders may sell short on break below Rs 396. Keep a stop loss above Rs 411.

(The author can be contacted at shahmani1@yahoo.com)