The indices broke out of the strong resistance zone as the Nifty closed past 4,750 and the Sensex past 16,000. The next target for the Sensex is at 17,215 and 5,100 for the Nifty. The indices were range bound for the past few months and these resistance levels proved to be quite strong. Now, with these indices past these resistance levels, higher levels could be expected as long as the Sensex stays above the support of 15,610 and the Nifty above 4,642.

In the last week majority of the indices ended higher as the Sensex gained 3.67% and the Nifty ended 3.19% higher. The CNX Mid Cap index registered a lower percentage gain of 1.84% and the BSE Small Cap index gained 1.57%. These indices have registered a lower percentage gain as mid-cap and small-cap stocks saw profit taking. This resulted in the market breadth remaining weak for three of the five trading sessions. Among the sectors, the BSE Metals index was the largest gainer ending 7.71% higher and was followed by the BSE Bankex which gained 6.78%. On the weaker side, the BSE FMCG index was the largest loser ending 2.98% lower and was followed by the BSE Realty sector which lost 1.18%.

The intermediate trend for the Sensex and the Nifty is up and as long as the indices stay above their respective triggers of 15,356 and 4,576.60. These levels are currently far away and a minor decline followed by a minor rise will raise these levels. The target for the CNX Mid Cap index to drop into a fresh intermediate downtrend is at 6,014.65.

The indices have been in a major uptrend since March 2009 and have been exhibiting ascending intermediate tops and bottoms. The earlier intermediate bottom for the Sensex is at 14,684 and for the Nifty it is at 4,353.45. As long as any intermediate correction by these indices ends above these levels, the major uptrend will resin intact. The equivalent level for the CNX Mid Cap index is at 5,634.40.

Select stocks have been trending and are in an intermediate uptrend. Traders and investors will have to be in these select stocks if gains have to be realised. Few sectors are trending and in the last week we saw the banking sector joining the party. Stocks in these sectors are expected to improve further as long as the current intermediate uptrend stays intact. The Bank Nifty is headed higher towards the next target of 8,520 and traders can plan to look for long positions. Mid-cap banks saw a rise with strong volumes and higher levels are expected. I will take a look at few stocks in this sector today.

Vijaya Bank saw a strong breakout after a span of three months. The stock was correcting in this period and had recently seen a sharp drop in volatility. A breakout happened on Friday with the stock closing past its target of 43.75 and is closer to the immediate resistance of 46.85. Once the stock closes past this resistance, higher levels towards the next target of 53.40 will be seen. The very large volumes on Friday suggest that the bulls have a strong hold on the stock and any pull back towards the support of 43.75 must be used by traders to pick up long positions.

UCO Bank saw a strong move on Friday and is closer to its intermediate uptrend target of 45.95. A close past this level will confirm an intermediate uptrend as the stock will move towards the next target of 47.40. The daily MACD indicator has exhibited a non-crossover suggesting higher levels in the coming week. Once these resistances are crossed, the stock could be heading towards the next target of 49.50 where position traders and investors can look for profits. The relative strength line for the stock was neutral as the stock was performing in line with the indices. Now, once the intermediate trend turns up, and a strong trading volume suggests higher level in the coming week.

Dena Bank was another bank which saw a strong rise in trading volume as the stock surged past its trigger of 54.65. The daily MACD indicator has exhibited a non-crossover which is a bullish sign and indicates higher levels in the current intermediate rise. Any pull back towards the support of 53 can be used by position traders to look for long positions. The weekly MACD is below its trigger line and suggest selling pressure at higher levels. The next resistance to the stock is at 63 where traders can look for profits in the long positions held.

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