The market came to terms with the prevailing uncertainties in the Kargil sector. The stocks in the limelight were again the stocks in the commodity sectors, mainly in the cement and power sectors. Other favourites that gained during the week were the stocks in the refinery sector. On the other hand, the stocks in the software and the pharmaceutical sectors were on the receiving end as most of them either declined or remained flat.

Kargil, which took out the stuff from the market was relegated to posterity. The market shrugged off the nervousness noted in the last week and began on a positive note. Also, the news that the government of both the countries were agreeing to some sort of understanding also boosted the market sentiments. Trading volumes remained dull and itwould be fair to say that the current rally was not supported by a corresponding increase in volumes.

It is this lack of volumes supporting the rally which makes the rally a suspect. But the market has not yet shown any sign of reversal. Till the time the market is in a rallying mode and in the absence of any reversal patterns, we have to assume that rally will continue.

Last week, we mentioned that anything was possible after the market had seen a huge decline. Once the index went through the resistance level of 3888 points, there was little to stop the market. The week began on a very bullish note. The index opened with a huge gap on the upside and continued to rally further up.

The best part of the move on Monday was over in first ten minutes of the day's of trading. But it was still a very bullish pattern. Friday's trading resulted in a star and this was followed by a long white candle. This pattern was the bullish 'morning star'. The index does show a rally, but the rally is far from convincing.After Monday's rally, there was not a single day when the index closed near to its high.

In fact, all the three days were small-bodied candles. What we need is a long-bodied candle, where the day's close is near to its high. Such a type of candle denotes strength and does offer a further scope for appreciation. But appearance of a series of small-bodied candles does not show much of strength in the market.

The index now faces resistance around the level of 4087 points and above this, the index could rally to around the recent high of 4197 points. If the index makes a new high, it can further rally to around 4322 points. The index is very delicately poised. The level of around 4130 has been a very strong resistance level historically. It remains to be seen whether this level again acts as the spoilsport to the huge rally we have seen since last December. We could possibly be seeing the last stages of the rally and one should be really be careful in selecting long term buys.

The supporting indicators arein a sell mode. The daily MACD (Moving Averages Convergence Divergence) is in a sell mode as the MACD line is below its trigger. The 14-day RSI (Relative Strength Index) has shown a series of negative divergences. But it is yet to give a sell signal. The indicators are showing some signs of weakness, but the decisive sell signal is missing. Long-term investors are cautioned to remain on the long side of the market.

Zee Telefilms: Book Profits

On the daily charts, one sees appearance of a head and shoulders top. On the weekly charts, one sees appearance of a bearish 'engulfing pattern'. This is a very bearish pattern. The price of the stock could decline to around Rs 1000. Holders of the stock may consider booking profits at current levels.

Satyam Computers

The price of this stock has broken below the support level of Rs 1,350 points. Ths is a very crucial support level. The price can decline to around Rs 992 as there is no real support that can hold up the price. Holders of this stockcan consider booking profits or exiting from this stock at current levels. One may consider getting out from the stock at any rally that comes along the way.

Bombay Dyeing

This weeks' trading saw some terrific trading in this stock. There was a huge spurt in trading volumes and the price also saw a superb rally. The price can see a spurt to around Rs 63 and once price surpasses the level of Rs 63, it can rally to around Rs 72. One may buy this stock at current levels. Keep a stop loss below Rs 42.

Digital Equipments: Sell short

The price of the stock can see a decline once it breaks out below the support level of Rs 437. Traders may sell short the stock on break below the support level of 437. Keep a stop loss above Rs 448.

Grasim: Buy long

The price of this stock can rally to around Rs 197 once it shows a break above Rs 190. Above Rs 176, the price of the stock can rally to around Rs 228. One may buy the stock at current levels. Keep a stop loss below Rs 176.