With such low interest in the market, it is very much unlikely that there are likely to be many players having huge positions in the market. The effect that a market condition can cause is boredom and frustration from small and regular losses. The price seems to be stuck at one point and does not seem to move. Small losses occur and this leads to premature withdrawal from one's position. Market condition, which has such small movement, is not conducive to good trading.

Kargil's effects have not dampened the market spirit. News that the Indian Army may not have to cross LoCo was heartening. Marketmen saw this as the first sign that the issue may be resolved. Whether this really happensremains to be seen.

The week witnessed some acute sideways movement. The index hovered in a range of around 4187 points to 4121 points. This narrow range has been going around for more than seven trading sessions. The market has not made much of a gain during this period. The opinion of the market is: Wait and watch. The conclusion that can be drawn is that the market is waiting for some development to happen and then decide on its course of action. Last week, we had mentioned that the market would have to break below the level of 4087 points if the decline has to continue.

The index did not break below the support level but went in to a long sideways movement. Due to the sideways nature, there cannot be much analysis of the market. The only thing that can be said is that the market has to break above move above or below certain levels before it can be said to be trending. Let us take a look at the current position of the index.

Notice how the index is poised at the rising trendline (the solid line). Infact, on Friday, the index touched this trendline before a small rally can take place. Now the trendline that we are talking about is a fairly steep line and if the market does violate it with some sideways movement, the violation has to be taken with a bit of a pinch of salt. Secondly, are we seeing a rising wedge formation. The way the index is moving, it does seem so. Notice in the charts that the movement in the index over a period of last two months or so can be contained within two converging trendlines (the dotted lines). If we are seeing a rising wedge, the market could be headed for trouble.

But the fundamental principle of price analysis says that there has to be some sort of confirmation in the price before a trend reversal can be seen. The conclusions that can be drawn are no different from those of last week: If the index shows a breakdown from the support of 4087 points, expect a decline. If the index shows a break on the upside from the level of 4200 points, expect a rally to around 4285 orto around 4322 points. The market is in a very crucial mode. And the developments that take place over next couple of weeks will have an important impact over the course of the market over next couple of months.

The indicators are not much of use under such circumstances. The MACD (Moving Averages Convergence Divergence) is in a sell mode. The 14-day RSI (Relative Strength Index) is also showing negative divergence. Much depends on the movement of the market in the course of next couple of weeks. One may adopt a wait and watch attitude.

Neuland Laboratories

The price of this stock is just below the resistance level of Rs 66.50. On break out from this level, the price can rally to around Rs 91 in the medium term. If the price breaks above the level of Rs 91, it can rally to higher levels. One may consider buying this stock once it breaks above the level of Rs 66.5. Keep a stop loss below the level of Rs 50.

Emco Transformers

The price of this stock can rally to around Rs 125, thereseems to be a lot of potential left in it. The price faces overhead resistance around Rs 100 and once the price clears this level, it can rally to higher levels. One may consider buying this stock at current levels. Keep a stop loss below Rs 75.

Rolta India

At current levels, the price of this stock offers a very attractive proposition. At current levels, it does seem to be a low-risk buy. The price of this stock has broken above its falling trendline and since last two weeks, the price of the stock is moving in a range of Rs 114 to Rs 128. The price of this stock can rally to higher levels. One may consider buying this stock with a stop loss below Rs 110.

Sterlite: Buy long

At current levels, Sterlite is a low risk buy. The price is currently above its previous top of Rs 237. The price can rally to higher levels. One may buy the stock at current levels. With a stop loss below Rs 237.

Tata Chemicals

The price of this stock can rally to around Rs 92 on break above RS 82.5. Onemay buy the stock on breakout. Keep a stop loss below Rs 77.