FEBRUARY 21: Widespread gains were made on the bourses on Monday, if one were to go buy the statistics. On the Bombay Stock Exchange, the number of advances short up from 978 to 1522, with the advance volume rising from Rs 1839 crore to a whopping Rs 4297 crore. The number of declines shrunk from 1159 to 790, with decline volumes going down from Rs 2546 crore to Rs 534 crore. At the NSE, the advances moved up from 469 to 510, with advance volume going up from Rs 3277 crore to Rs 4860 crore. The number of declines went up from 603 to 645, with the decline volume coming down from Rs 1845 crore to Rs 621 crore.On Monday, the Sensex gained 155 points on the back of strong recovery in HLL, Bajaj Auto, Bhel, Telco and Infosys. The combined effect of being the first day of the BSE trading week, coupled with favourable news from HLL, Bhel and the auto sector gave a push to the index. This appears to have triggered a pre-budget rally on a wider front. The wider market indices reflect this. The daily stochastic indicator is close to signalling a buy. But the closing of the NSE week could end up depressing prices on Tuesday and could abort the likely trigger.
The Indian market will be without a signal from Nasdaq for the next day. While the BSE-100, BSE-200 and BSE-500 have closed strong, the same cannot be said of the Sensex. It needs to cross the 5,943 resistance for the uptrend to continue. On Tuesday, it could take support at the 5784-mark and if that fails, at 5718.
These could also be intra-day lows. Again, as I browse through the scrips in the A group, signs of strength are nowhere to be seen. While the advance volume figure could have been due to a clutch of counters, the gains on the broader market could have been on negiligible volumes. In final summation, the Tuesday effect has the ability to pull down scrip prices further. It may be a good strategy to pick selectively at the lows of the day on Tuesday for any possible pay-off on Wednesday.
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