The market capitalisation of Wipro exceeds that of Hindustan Lever and the market capitalisation of Zee Telefilms and Infosys is higher than Reliance Industries. The IT industry is likely to get a big push in the current budget. If the government is dead serious about developing this industry, then it is likely that this industry is given top priority in terms of infrastructure. If this industry is to prosper, the entire ancillary industries like cables, Telecom, e-commerce will have to prosper.

The sector is witnessing booming times and it is a little surprise that the market is giving them such a high discounting. These days, what one is looking for are growth stories and the performance of the companies is measured on the basis of quarter to quarter. The size of the assets is of little or no consequence, or for that matter, even the total profits earned are of no consequence. If one can select stocks and make a correct guess regarding the figures for the growth estimates, then one could hit the bulls-eye. The worst thing that one can do is to select stocks based on the size of the assets. This is the logic that is working in the market in the current circumstances.

Last week, we had expected the market to be in a range of 5348 to 5528 points. The index made a big break below the support level of 5348 points on Monday and continued a steady decline to lower levels. The market made a low for the week at 5127 points and it went on to rally to higher levels. The index turned weak on the first trading day of the week and it continued to slide to lower levels on heavy selling. The index found support at the level of 5127 points and it is from here that the market continued to rally.

On its way back up, the index also ran into some selling at the level of 5403 points. The index formed a 'doji' on Monday, as the open and close for the day was almost at equal level. This was followed by a white candlestick, suggesting that the market may have seen an intermediate bottom at around 5128 points. The index has also completed its Elliot wave flat pattern, signifying that the market is possibly seeing an end to the sideways movement since the beginning of January.

This means that the market should begin its uptrend sometime next week. The index should be seeing some major movement on the upside in the coming weeks. There may be a small decline to around 5221 points, before the index starts to rally to higher levels. In the event the index slips below the level of 5221 points, the market may test the recent level of 5128 points.

The indicators are not yet showing any major move on the upside, and it will be sometime before the lagging indicators show a buy signal. The 14-day RSI (Relative Strength Index) is at its equilibrium level and the MACD (Moving Averages Convergence Divergence) is above its equilibrium level. The index is likely to start its uptrend and the market is poised to start its pre-budget rally.

BPL Ltd
The price has seen a major breakout from an inverse head & shoulder pattern as seen on the daily charts. The breakout has been with a very good increase in volumes. The price may see a rally to around Rs 600 to Rs 636 in the medium term. One may buy the stock at current levels. Keep a stop loss below Rs 379.

Videocon International
The price has seen a major break out from its four-month consolidation phase. The price happens to be in a huge long term up trend. The price may see a rally to around Rs 155,in the medium term. One may buy the stock at current levels with a stop loss below Rs 78.

India Cements
The price has broken above its falling trendline. The breakout has been with a very good increase in volumes. The price may see rally to around Rs 125 in the medium term. One may buy the stock at current levels. Keep a stop loss below Rs 81.

NIIT -- Buy long
Once the price breaks above the level of Rs 2999, it could see a straight non-stop rally to around Rs 3400, as there is nothing to stop the rally in price. One may buy the stock at the level on break above Rs 2999 for a quick rally to around Rs 3400. Keep a stop loss below Rs 2870.

Infosys
The consolidation since last two weeks in this stock suggests that there is enough ammunition in the price to take it above Rs 8466. One may buy the stock at current levels. For a target of Rs 8500 in the short term. Keep a stop loss below Rs 7500.

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