The market participants again received a shot in the arm as the US Senate gave authority to President Clinton to decide on the sanctions. The popular opinion is that the severity of the sanctions is likely to be further diluted. This should be a welcome news to the foreign investors.

The finance minister has granted further sops to the highly favoured infotech stocks. Not surprisingly the stocks from this sector were among the major gainers during the week. The sops given to this sector are welcome but it is unlikely that only concessions on the domestic front can make this industry competitive internationally. What the industry needs is proper infrastructure which is altogether missing. The government isstill lingering over its internet policy and nothing has come out about the role of private operators in this area. Internet is a huge untapped area and if this is developed properly then the entire sector will receive a big boost.

Last week we had mentioned that the index is likely to show a correction at the level of around 3470 points. On Monday, the index made a high of 3461 points before a small correction took place. Monday's trading was a long black candle and it formed a pattern called the `Bearish Engulfing' pattern.

But after the appearance of this pattern the index found a brief support at the level of 3310 points before it moved up. The last trading day of the week was a `star'. This is not a bearish pattern as such but it denotes indecision and may turn out to be bearish. The breakout seen last week from the falling trendline is still intact. Technically, it was a very insignificant week as there were no major signals to be seen.

The indicators are not showing much of an improvement overthe levels of the previous week. The 14-day RSI (Relative strength Index) is just below its overbought zone. The 12-day RoC (Rate of Change) has shown a small negative divergence. It is expected that the market may stage a small decline in the falling week. This decline that will take place will probably be the last before the a bull market begins. Long term investors may consider buying selected stocks.

Parke Davis: Worth buying

The price of this stock temporarily broke below its rising trendline only to rise above it. This means that the up trendline has remained intact and has provided support to the falling price. The stock has broken out of its trading range and it could well be in the initial stages of a bull trend. The weekly RSI has started to move up from its oversold levels. One may consider buying this stock at current levels for a decent appreciation in price. Keep a stop loss below the level of Rs 200.

Vysya Bank: On the rise

The price of this stock made two valiant attemptsto breakout beyond the level of Rs 175 in May and June. Both the attempts were failures. During the week the stock price has closed well above the resistance level of Rs 175 signaling a breakout. One may consider buying this stock at current levels for a targeted level of around Rs 225. Keep a stop loss below Rs 172.

Ucal Fuel: Await breakout

Since June 1997 this stock is moving in a range. This consolidation phase is in the form of a symmetrical triangle. This is a reversal pattern and signals reversal of trend. The stock faces resistance at Rs 73. One may wait for the stock price to move beyond this level before buying. The stock faces resistance at around Rs 85 and once this level is surpassed it could rise to around Rs 100. One may buy on breakout. Keep a stop loss below Rs 65.

BHEL: Buy long

The stock has shown a breakout beyond the level of Rs 360, a minor resistance level. One may buy long at current levels. Keep a stop loss below the level of Rs 360.

ITC: Sellshort

Appearance of a bearish `dark cloud' cover in this stock suggests a temporary decline. One may sell short at current levels. Keep a stop loss above the level of Rs 713.