The market has been attracting a lot of buying from the foreign funds and alot of money is being pumped into the market. In spite of this, the markethas not shown a genuine rally.

During the week, we heard very significant statements from the Financeminister. The minister is optimistic that the economy would grow by 6.5 percent in 1999-2000. He is also of the opinion that though the fiscalsituation in the country is difficult, there is nothing that isextraordinary. These are indeed very significant statements and there is noreason that the market should not be elated about this.

But still there were no positive reactions from the market. The only optionis to wait and watch when will the market reacts to this news.

Last week, we were of the opinion that the market should reach 4750 pointsonce the level of 4600 points is surpassed. But this did not happen and assuch the market showed a decline. The net loss in the index values was notsignificant. But it was a very slow and steady decline.

On the weekly charts, it is seen clearly that the market has formed twosmall-bodied candles. This is after the long white candle that was formedafter the market showed a superb rally from the low of 4209 points. Nownotice in the daily charts that the market, since last eight sessions or sois moving in within two down sloping trendlines. Also notice that duringthis period, the volumes have shrunk significantly. This is a copybook flagpattern.

On Friday there was a break above the flag pattern but the breakout did notsustain. If the market has to rally the index should sustain above the flagpattern. The crucial break point is at 4635 points. The market shouldsustain above this level if the rally has to continue. The supportingindicators are in a buy mode.

The MACD (Moving Averages Convergence Divergence) is in a buy mode. The14-day RSI (Relative Strength Index) is just around its equilibrium level.The indicators are showing signs of strength. For the forthcoming week, theindex should gather strength if shows a sustained breakout above the levelof 4635 points and there is a heavy increase in volumes. On the lower side,if the index breaks below the level of 4511 points there could be a declineto around 4470 points.

BPCL
On the daily charts, one notice appearance of an inverse head and shoulderpattern. The volumes have also shown a good increase. The crucial break outpoint in this chart is at Rs 320. The targeted price of this stock is at Rs395. One may consider buying this stock on breakout with a stop loss belowRs 305.

Madras Refineries
The price of this stock has seen a major breakout from its fallingtrendline. The price is just below the resistance level of Rs 52.90. Theprice may see a rally to around Rs 78.80 in the medium term once there is abreak above the level of Rs 52.90.One may consider buying this stock onbreak above Rs 52.90 and keep a stop loss below Rs 43.

Alfa Laval
The price of this stock has seen a major breakout above the level of Rs 247.The price does show a potential to rally to around Rs 295 in the shorterterm and in the medium term there may be a rally to around Rs 325. One maybuy this stock at current levels with a stop loss below Rs 222.

State Bank: Buy long
The price of this stock could see a major breakout once it shows a breakabove Rs 237. The price may see a rally to around Rs 250 once it registers abreakout above Rs 237. One may buy on break out. Keep a stop loss below Rs229.

Wockhardt: Buy long
The price is moving in a very narrow band of Rs 630 to Rs 694. One may buyon breakout once the price moves above Rs 634 for a target of Rs 690. Keep astop loss below Rs 618.

(The writer's e-mail address is shahmani1@yahoo.com)