The Y2K problem is no longer a bug bear as far as the markets are concerned, though no one can say for sure what is likely to happen on January 1, 2000. If the money flowing in the market is any indication, then the market is likely to see a rally in the new millennium. The ball play in the cement sector is really hotting up due to the entry of Lafarge, one of the world's biggest players in cement. Lafarge is gobbling up a number of smaller size cement companies and this has created a scare among the other bigger players in the sector. The biggest coup in the market was the announcement was that the Tatas have chosen to offload their share of stake in ACC to Gujarat Ambuja at a price of around Rs 370. This news caused more than an unusual ripple in the stock price of ACC. The smaller companies in this sector are susceptible to takeover and some stocks in this sector are likely to see a big rally.

The market opened the week with a bang and continued to rally to higher levels. On the weekly charts, the index has formed a candle having long upper and lower shadows. This is a long-legged candle and it signifies that the market is a bit undecided where should it go. Though the trend remains up it is the short-term trend that is confusing. The market is moving in a rising channel suggesting that the rise since November is steady and not very fast. Till date, the sequence of higher highs and higher lows has remained intact. The pattern is that the market is rallying for a while at a fast clip and then it again shows a tendency to decline at an equally faster clip. This suggests that the market is very volatile and there may be a time before it shows a sustained rise. The indicators are in a buy mode. The MACD (Moving Averages Convergence Divergence) is in a buy mode. The RSI (Relative Strength Index) is also showing sign of strength. For the next week, the market is likely to face resistance at 4943points.

If the index makes a rally above this level, it could rally to higher levels. But in case there is a break below 4846 points, the index could see a decline to around 4750 points.

Larsen & Toubro
The price of this stock has registered a new high as it has broken above the resistance level of Rs 448. The breakout has been with a huge increase in volumes. The price of this stock should see a rally to around Rs 625 in the medium term. One may consider buying this stock at current levels for a target of Rs 625. Keep a stop loss below Rs 438.

Kakatiya Cement
The price of this stock is showing a smart rally with heavy pickup in volumes. The price of this stock could see a rally to around Rs 77 in the medium term. One may buy this stock at current levels. Keep a stop loss below Rs 47.

Tata Tea
The price of this stock has broken above the level of Rs 530. This is a strong support level. The price of this stock may see a rally to around Rs 650. In the medium term, one may buy with a stop below Rs 582.

Silverline: Sell short
The price of this stock has formed a bearish candlestick pattern. The price of this stock may see a decline to around Rs 721. One may sell short if the price opens higher on Monday with a stop above Rs 828.

Dr Reddy's Lab
The price of this stock has a strong support at Rs 1313. Traders may consider buying this stock around this level. For a quick up swing in the price. One may buy with a stp loss below Rs 1290.

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