Suddenly, it dawned on the market participants that the BJP government could survive. Prices started to go through the roof. In a matter of minutes, the index shot up by more than 200 points. There was a virtual U-turn in the market sentiments as the index rallied from the depths of despair to heights of over-optimism.

At the time of writing this article, it seems likely that the BJP will scrape through this time. Jayaliltha, the mainprotagonist of the plot, has been unsuccessful in her endeavour. Political uncertainty has been the chief culprit in inhibiting the country's progress. Last week, we expected the index to find support at the level of around 3375 points. Against this, the index made a low of 3345 points and reversed direction. But the move on the upside was fast and many traders would have been caught unawares by the speed of the move.

On the daily charts, we notice that the index has formed a down-sloping wedge as it can be seen from the trendlines drawn. This is a continuation pattern and as the breakout has been on the upside, the index could stage a further rally. On Friday, the index showed a classic breakout from the wedge and hence it is expected that the up-move should continue in future. The daily charts show that the index has formed a long candlestick. This is the 'belt- hold' line. The size of the candle is very significant. This line denotes bullishness. On the weekly charts, the index has again formed a longcandle. This is also a bullish pattern. Thus we expect that the market over a long period should gather strength over a longish period. What is exciting is the size of the candle that has formed. It is not without any reason that one sees candles of this size. The long term potential of the market is very exciting.

Over a short period, we expect that the market will not rally immediately, but it could be range bound for some time. On the upper side, the index faces resistance at around 3,650 points and above this, the index could rally to around 3684 points. There could be selling at these levels. Traders may keep a close watch at these levels. By selling, we mean that there could be some correction in the rally. In a very fast market, the index could just break through the levels without having any respect for the levels.

The MACD (Moving Averages Convergence Divergence) indicator has spiked but it has not given a buy signal. The 14- day RSI (Relative Strength Index) has also not given any buy signal.These indicators are trend-following indicators and they give a buy signal well after the trend has changed. But the price action of the week denotes bullishness and that is what matters.

The index can go in a bit of a sideways range for sometime, a likely market action following the appearance of the long candle. It is only a matter of time before the index picks up pace again.

Indal What is most attractive in the case of Indal is the risk reward ratio that this stock offers. The price does show a potential to rally to around Rs 90 and on the lower side, the risk is limited to just below Rs 48. The volumes in this stock are picking up for some time. And the price is just above the support of Rs 48. One may consider buying this stock at around Rs 48 for a targeted price of Rs 90. Keep a stop loss below Rs 40.

Hindalco

The price of this stock does appear to be set for a rally. The volumes have been picking up since last couple of weeks. The price faces resistance at around Rs 487. One may awaitbreak above this level before buying. The price can rally to around Rs 600 over the medium term. One may buy on breakout with a stop loss below Rs 470.

Reliance

When every thing was rallying, this one was in a correction mode. It now appears that the stock could see a major rally. The price of this stock faces major resistance at around Rs 134. Once above this, the price can rally to around Rs 155. One may buy with a stop loss below Rs 117.

Bhel

The price of this stock shows a small reversal signal. One may consider buying for a target of Rs 200. Keep a stop loss below Rs 185.

Raymond

Appearance of a long white candle justs above the support level of Rs 65. The price could rally to around Rs 75 in the short term. Keep a stop loss below Rs 65.