The spurt in the values of most stocks can be contributed to the fact that several stocks were shifted to no-delivery period. This was due to a basket of stocks being shifted to the demat segment. The market has been attracting very high rates of badla in recent times and when several of key index-based stocks were shifted into no-delivery period.

On the first day of the week, most of the stocks opened with a huge gap. But this gap was not related to heavy buying pressure. It was a result of the procedure of mathematics that resulted in the huge price gap.

This week, the government announced a new Exim policy. Under the policy, there has been an addition of 894 items to theOpen General Licence category. The lists of items under restricted list are pruned. The policy has, in general, evoked favourable response from the business community. It reiterates the government's commitment to reforms and is sure to send a good signal to the foreign investors.

The policy also signifies the government's commitment to the list of regulations of the WTO (World Trade Organisation). The Indian industry will have to gear up to face the challenge of cheaper imports. The market has not responded favourably to this bullish development. Whenever the market does not show a rally on bullish news, it is to be closely watched.

The week saw only three trading days, a very short time to do full justice to the market action. Last week, we expected the market to decline, but the anticipated decline did not take place. May be it is slightly delayed. The rally lacked conviction. On the first trading day of the week, the market opened with a gap of 85 points over the close of the previous week. But therally failed to carry on as the index showed a steady decline when a small sell-off occurred.

The gap that took place on Tuesday does not carry much significance. The index is in a range for around three weeks now and the gap that occurs in this situation is classified as a 'common gap' and it does not have much significance. The last trading day of the week was a long black candle. The index is still above its support of 3,650 points. For a decline to continue, the index should break below the support of 3,650. Once the index does break below this support level, we can expect a decline. On break below 3,650, the index can further decline to around 3,560 points and below this, to around 3525 points. On the upper side, if the index breaks above the level of 3823 points, we expect the rally to continue.

The indicators are also showing a bit of bearishness. The MACD (Moving Averages Convergence Divergence) has given a sell signal. The 14-day RSI (Relative Strength Index) has shown a decline from itsoverbought zone and the decline is in a series of lower tops and bottoms. Also, notice in the chart, how the two moving averages, one short-term and other a long-term are converging on each other. The shorter average is just on the verge of going below the longer average. In the final analysis, the index is likely to show a decline. One may await a break below 3651 points before considering selling short.

DCW: wait for the break

This stock has shown a bit of rally in the past three weeks. The volumes have also picked up a bit. The best possible point to buy will be when the stock shows a break above Rs 13. On a break above this level, the price can rally to around Rs 23. One may wait for the stock to break above Rs 13 before buying. Keep a stop loss below Rs 10.95, if one has bought on break above Rs 13.

Tata Vashisti: Something is cooking

What is most appealing about this stock is the low risk reward rate. The price is currently just above its high of just several years. A break abovethe highs of last several years signifies that something is cooking in this stock. The breakout has been with a significant increase in volumes. At current levels, one may buy the stock for a reasonable increase in price. Keep a stop loss below Rs 60.

Goodricke : Buy selectively

This is one of those stocks that have shown a beautiful breakout above its major resistance level. This stock has broken out of the important resistance level of Rs 122. The breakout has been with a heavy increase in volumes. The price does have the potential to rally above Rs 300 in a relatively short time. One may buy with a stop loss below Rs 122.

Traders Choice

Hero Honda: Sell short

Notice in the charts that the rally in the price of the stock is not supported by an increase in volumes. Also, notice the increase in volumes when the price declined on Thursday's trading. The price of the stock is just above the support of Rs 855. Traders may wait for a break below the level of Rs 855 before sellingshort. One may sell short. Keep a stop loss above Rs 855.

Hind Lever:Sell short

The price of this stock is registering higher tops but the volumes are shrinking. This is the first sign that the price is susceptible to decline. The price of the stock could decline to around Rs 2100 once it breaks below Rs 2200. Traders may sell short on break below Rs 2200. Keep a stop loss above Rs 2220.