Bulls have upper hand, but don't count your chickens yet

Special to Firstpost

S&P CNX Nifty (5,633.95): The Nifty index was stuck in a relatively narrow trading range during the just concluded trading week. A directional move can happen once the index moves above 5,750 or falls below 5,490.

While it is positive to note that bearish forces could not assert themselves, the bulls cannot rejoice until the index moves past the bull market trigger level of 5,750.

The technical picture of index heavyweights such as Infosys Technologies, State Bank of India and Reliance Industries indicates that the bullish camp seems to have the upper hand.

A breakout past 5,750 would be a strong sign that the recent uptrend is gaining momentum and the index could then target the major resistance at 5,890. It would be safer to wait for the breakout to happen before committing fresh funds.

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BSE Sensex (18,722.30): The Sensex’s price action was range-bound during the week that went by. The price action in the following weeks would provide a pointer towards the next major directional move.

A breakout above 19,200 or a fall below 18,320 would set the tone for the next significant movement. As observed in earlier weeks, small- and mid-cap sector stocks have been attracting buying interest; it therefore makes sense to hunt for opportunities in this space.

Gujarat State Petronet (Rs 107.75): After completing a bullish double-bottom pattern, the stock on Friday registered a breakout above the resistance at Rs 106. Any minor downward correction would be a buying opportunity with a stop-loss at Rs 92.

Those contemplating long positions may take profits at Rs 122. A breakout past Rs 122 could trigger a rally to the major resistance at Rs 129.

Yes Bank (Rs 329.10): The stock has been in an uptrend since the 9 February low of Rs 233.55. The price pattern in the past few days suggests that the stock is poised to see a sharp upward move.

Long positions may be considered with a stop-loss at Rs 300, for a target of Rs 360. Investors willing to play the waiting game may get exit opportunities at Rs 380.

(The views and recommendations featured in this column are based on a technical analysis of historical price action. There is a risk of loss in trading. The author may have positions and interest in the instruments featured in the column.)