Another sector that seems to be gaining strength is the banking sector. Thestocks in this sector have been gathering a lot of strength and one sees alot of accumulation in several stocks at lower levels. Last week, we werebullish on the market. It was mentioned that once the index moves above thelevel of 4635, there could be a rally. The market did rally once the indexmoved above the level of 4635 points. The market has seen some sidewaysmovement between 4699 points to 4770 points. On Friday, the index did seesome selling at this level. On the weekly charts, one sees the index havingits resistance barrier at the level of around 4715 points and the support isat the level of 4560 points. The market has been in a range of 4715 to 4560points. This is the series of three small bodied candles following the longwhite hammer formed on the week ended November 7, 1999. This series of smallcandles suggest continuation of the prior up trend And this is one of thereasons why we are bullish on the market.

On the daily charts, one very important development took place. The indexregistered a higher bottom and a higher top. Thus, the decline from the highof 5150 points is possibly reversed. Secondly, Notice in the chart how theindex volumes have registered a minor increase as compared to the volumes inthe previous days when the index was making the 'flag' pattern. Thissatisfies another main condition regarding breakouts, that the volumesshould register an increase on the upside breakouts. Now on Friday, Theindex has just dipped marginally below the support of 4715 points. It is amarginal dip below the level of 4715 points. But we cannot ignore it. Forthe forthcoming week, if the index breaks below the level of 4715 pointsthere could be a decline to around 4635 points or still below the level of4511 points. But if the index manages to hold above the level of 4715points, then we expect a rally to around 4850 points.

The supporting indicators are in a buy mode. The MACD (Moving AveragesConvergence Divergence) is in a buy mode as the trigger line is well abovethe MACD line. The 14-day RSI (Relative Strength Index) is just above theequilibrium level. Finally, much depends on how the index behaves on Monday.If the support of 4715 holds, then we expect a rally. Of the index breaksbelow 4715 points the market may show a small decline to around 4511points.

Hindalco
One notices the appearance of an inverse head and shoulder pattern in theprice series. This pattern is more clearly seen on the daily charts. Theprice of this stock may rally to higher levels once it registers a breakoutabove the level of Rs 860. Now on Friday, the price just closed above thelevel of Rs 860. One may consider buying this stock if break above the levelof 860 holds. The price may rally to around Rs 950 and on break above Rs 860there may be a rally to higher levels. One may buy with a stop below Rs 840.

Essel Packaging
The price of this stock has seen a big breakout above the level of Rs 573.The price of the stock has a great potential to rally past the level of Rs745 in the medium term. One may consider buying this stock at current levelsfor a substantial increase in price. Keep a stop loss below Rs 573.

Godrej Soaps
The price of the stock has just managed to wriggle out of the level of Rs51.75 a strong resistance level. The price of the stock does show apotential to rally to around Rs 80 in the medium term. One may buy the stockat current levels. Keep a stop below Rs 51.75.

Bank of Baroda
The price has just broken above the resistance level of Rs 71. The price mayrally to around Rs 78 in the short term. One may buy with a stop loss belowRs 67.5.

NIIT
Last week saw the price of the stock making a 'flag' pattern. At currentlevels the price of the stock is just above the rising trendline. The priceof the stock may rally if it rallies above Rs 2414 points. One may buy onbreak above Rs 2414 points. Keep a stop loss below Rs 2380.

(The author can be contacted at shahmani1@yahoo.com)