Buy and Sell for Free! Tuesday, March 7, 2000
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Recovery seems to be weak, keep booking profits 

K Seshadri  
MARCH 6: The Sensex posted a gain of 143 points to close at 5521. It opened at 5662, making a handsome jump over the previous close of 5378. But the day's high was just 31 points higher at 5693. Intra-day, it came down to 5460, which was still a good gain over Friday's low of 5363. Incidentally, the market was all blue on Friday. The daily stochastic indicator is still in negative territory. The index has a good support at 5385 points. The weekend at NSE could exert pressure on the markets. But even in such a case, 5385, I believe would provide a good bouncing point. Right now, technically, it is difficult to say that you should go long even as a long-term investor. The market would need some more time to settle down. For short-term traders, the index could face resistance at 5800. Even the BSE-100 does not look very bullish as of today. It has a support at 3238. The BSE 200 suggests that the market can take to a sideways movement.

It could hover between 700 and 750 points. On the BSE-500 you have a stochastic signal to go long. But I wonder if this will strengthen. The Monday morning thrust is absent in most of the broad indices. All that has happened is that they have caught up with Friday's storm, but have ended the day weak. I would, therefore, tend to think that you need to adopt a rather cautious approach. Surely, with the price levels in several pivotal counters having gone down steeply over the last week, there is money to be made. But clearly, this is a short-term opportunity. It should be handled that way. Buying really cheap is fine. But if you go long on the belief that the bull momentum would build up, the risk lies there. It could build up or it may not. The technicals right now say that there is a weak recovery. So, if you must extract your rupee, be quick to book your profit repeatedly. Building up volumes in the hope that the market would take off, is a difficult strategy to recommend just now.

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