March 28th, 2008 
krishna The market made some large swings in both directions last week, but the Sensex finished just 1.35% or 215 points lower. The Nifty closed a modest 0.54% down, and the CNX Midcap lost 1.65%.
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New entrant Jaiprakash Associates was the biggest winner among the Sensex stocks with a 14.2% gain. It was followed by ACC, Ranbaxy Laboratories, NTPC and ONGC, with gains between 5% and 9%.
Wipro was the biggest loser among the Sensex stocks with an 11 % fall. Other casualties were Sat yam Computer Services, Maruti Suzuki, Tata Steel, Hindalco, Bharat Heavy Electricals (BHEL) and State Bank of India (SBI), with losses between 6 % and 11 %.
The newly listed GSS America Infotech was the biggest winner among the more heavily traded non -Sensex stocks with a 24.5% gain. Shree Renuka Sugars, Chambal Fertilisers and Chemicals, Bajaj Holdings, Tata Communications, Cairn India and Punj Lloyd followed, with gains between 8 % and 21 %.
GTC Industries was the biggest loser among the more heavily traded non -Sensex stocks with a 17% loss. Other losers were Financial Technologies, Videocon Industries, Steel Authority of India (SAIL), Hindustan Construction and IVRCL Infrastructure and Projects, with losses between 9 % and 15 %.
The intermediate downtrend that began on February 4, when the Sensex topped out at 18895, is still on. The Sensex will have to cross 16683 to start a new intermediate uptrend. The corresponding level for the Nifty stands at 5019, and that of the CNX Midcap index is 7019.
Global markets had started falling again by the time this article was written (on Friday evening), and this may put pressure on the Indian market early next week.
The Sensex has reversed upwards thrice on approaching 15000 since January 22, and a fall below that level can imply a more persistent intermediate downtrend.
The main indices are in major (long-term) downtrends with falling tops and bottoms, and the CNX Midcap can also be taken to be in one, as it closed at a six-month low. A major downtrend means a bear market, and all the better-known global indices are also in one at this time, with many falling to their lowest levels in a year or more during this decline.
The Sensex has to close above its last intermediate top of 18895 to be back in a bull market. The corresponding level for the Nifty is 5545, and for the CNX Midcap index it’s 7814.
Volatility was unusually high last week, with the Sensex’s intra -day ranges averaging more than 550 points. Such spells are often followed by choppy phases – in other words, two-way swings without much of a trend. In fact, last week already saw the indices swinging both ways without really getting anywhere.
Such conditions make the overnight risk on swing trades considerably higher than normal. Even day traders may find it better to use tighter trailing stops, as the market may be prone to changing direction abruptly.
The US Federal Reserve’s $200-billion package provided some relief to the global decline – with the Dow Jones recording its largest percentage gain in five years on Wednesday. European markets also rallied, but Asian markets – including ours still crashed a day later.
Meanwhile, the Dow Jones remains in an intermediate downtrend despite Wednesday’s rally. It will have to climb back above 12850 to get into an intermediate uptrend, while a fall below 11690 will take it below the point from which it rallied after the Fed’s move.
The long-term (major) trends of all the important global indices are down. The Dow Jones will have to be back above 14000 for its major trend to turn up again to enter another bull market. Most global indices ended their bull markets last October, while Tokyo’s Nikkei topped out even earlier in July.
The Sensex’s gain for the 12 months that ended on Thursday stands at 22.6%, making it the sixth-best performer among 40 well known global indices considered for the study. Egypt heads the list with a 53.5 % gain. Brazil, Indonesia, Shanghai and Karachi follow with gains between 33.6% and 43.9%. (These rankings do not take exchange rate effects into consideration). The Dow Jones Industrial Average has gained 0.1 % during the same interval while the NASDAQ Composite has lost 4.6%. Global commodity markets have also been unusually wild, with gold hitting $1,000 for the first time ever. Even sugar futures gained 33% in the first two months of this year. Currency markets are also in the fray, with the US dollar poised to drop below 100 yen.
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