The market has been carrying a fairly large outstanding position at around Rs 1,200 crore for several weeks now and in spite of this the rally has failed to materialise. Without doubt, those who are holding positions for a long time are obviously worried. High carry over charges coupled with limited movement in speculative individual stocks is a cause for worry for holders of large positions.

The political situation is not at all fluid and is replete with uncertainties. Under the circumstances bulls who had taken a dip no-holds barred are finding the going tough.

The railway minister presented the railway budget for the year. The budget presented was almost predictable. An across theboard hike in freight rates was as predictable as sunrise. The passengers travelling by first class will have to pay more. This was also expected.

The policy followed by all the railway minister is that if you can pay more there is no harm in charging you more. Railways operate under monopoly. If it was a listed company the price of this stock would have been under par. If one takes a close look at its financial performance it will be seen that this outfit is in a mess. No private company would survive as it has to pay more than 90 per cent of its earnings to run its day to day expenses. The railway minister needs to take a hard look at what is to be done to the huge workforce employed with the railways.

Last week we expected that the market should remain more or less listless during the week. It was also mentioned that in case the index breaks below 3,266 points it could go still lower. It was also mentioned that if a rally has to take place the index has to show a break out from the level of 3,305points.

During the week the index was not able to confidently surge past the level of 3,305 points. In fact the week's high was at 3,311 points just marginally above our marked resistance level of 3,305 points. The movements of the week were again very restricted. The index began on a bearish note on Monday as a long black candle appeared. This was followed by three days of sideways price action wherein the index formed a long black candle.

What followed on the last trading day of the week was again a long black candle. On the weekly charts the index has formed a long black candle, which is again a bearish sign. Under the circumstances such a configuration would have resulted in a very bearish attitude towards the market.

But let us take a close look at the preceding price action before we arrive at a conclusion. On the week ended January 15, 1999, the index formed a bearish `Dark Cloud Cover'. Since the appearance of this pattern the market went into a range of 3,400 points to 3,197 points.Theoretically, appearance of a bearish candlestick pattern does not really mean that the market will decline. It means that the prior up trend has changed.

The market could change the trend from up to sideways following the appearance of a bearish pattern. This is what has happened. The index has gone into a range following the appearance of the bearish pattern. Now notice in the chart that at current levels the market is just above its rising trendline. In fact, Friday's price action has marginally closed below it. But the penetration is minor and we cannot say that the trendline is indeed broken.

Also the lower end of the horizontal price channel is at 3,197 points. It is at this point that the index could reverse. If the selling becomes worse it is likely that the index may break below the level of 3,197 points temporarily, and decline to a low of 3,157 points and then reverse to rally above 3,197 points. The key levels are 3,197 and 3,157 points. In the event that 3,157 is indeed broken and the marketdoes not rally then we take the stand that the market is set to decline. It is at the level of 3,197 points that we have to be on a look out for reversal signs. The confirmation that the market is in a rally will be received when we see a breakout beyond 3,305 points.

It is indeed an irony of fate that the market is not showing clear cut signs at the time of the budget. If this is the wish of the market we will submit to it. This week we shall again avoid commenting on the supporting indicators simply because the indicators are not displaying any signs which can aid our analysis process. In the final analysis, traders may have to watch out for the market movement at 3,197 points. If this level survives we should see a rally.

Century Textiles

: The price of this stock is moving between Rs 55 to Rs 28 for a long time now after the sell-off in January the price of this stock has gone in to a range of Rs 34 to Rs 28.5 since last four weeks or so. The stock has attracted large amount of volumes inlast couple of weeks.

The down side risk in this stock is low. And on the up side the price has the strength to rally to Rs 45. One may buy this stock at current levels with a stop loss below Rs 28.

Bombay Dyeing: It is with a reason that volumes in a price chart pick up. The chart of this stock shows a heavy pick up in volumes in this stock. During the week the price declined after touching the resistance level of Rs 63. The strategy that one may adopt in this stock is that one may buy at current levels and then buy additional quantity once the price breaks above Rs 63.

Bharat Petroleum: The price of this stock temporarily broke below the support level of Rs 202 and then managed to rally above it. On monthly charts one sees appearance of a bullish action termed as the spring action. The price can rally to a high of around Rs 260 in the medium term. One may buy this stock at current levels for a targeted price of Rs 260. Keep a stop loss below Rs 200.

Trader's Choice:

ZeeTelefilms: The price has shown a break out of its symmetrical triangle. Traders may await breakout beyond Rs 469 for a target price of Rs 725. Keep a stop loss below Rs 460.

Reliance Industries: This stock could be one of the top gainers in the post budget session. One may buy this stock on breakout beyond Rs 142. Keep a stop loss below Rs 138.5.