Marginally Up

THE stock market finished marginally higher after a week of increasingly large intra-day swings. The Sensitive Index finished 1.03% or 173.02 points higher, and the Nifty ended 1.07% up. The CNX Midcap Index gained 0.91%. Tata Steel was the biggest winner among index stocks with a 5.8% gain. The other index stocks to go up included Hero Honda, Maruti Suzuki, ACC and Tata Motors with gains between 4.6% and 3.7%. Reliance Infrastructure was the biggest loser among index stocks with a 4.7% loss. The other index stocks to go down included Bharti Airtel, ICICI Bank, ONGC and Sun Pharmaceutical with losses falling between 4.2% and 1.0%. 

    Dena Bank was the biggest winner among the more heavily traded non-index stocks with a 16.1% gain. The other non-index stocks to go up included Glenmark Pharmaceuticals, Great Eastern Shipping, Aban Offshore, Jindal Saw, Mercator Lines, Thinksoft Global Services and Suzlon Energy with gains between 14.4% and 9.5%. 
    Patni Computer was the biggest loser among the more heavily traded non-index stocks with a 12.4% loss. The other non-index stocks to go down included HOEC, Aptech, Balrampur Chini, Mphasis, Bajaj Hindusthan, Jet Airways and IVRCL Infrastructures with losses falling between 10.1% and 5.9%. 
INTERMEDIATE TREND: The market is almost certainly in an intermediate uptrend, though the CNX Midcap is the only index in a confirmed one. The Sensitive Index now has to cross 17,100 to confirm an uptrend, and the Nifty 5,080. The CNX Midcap would go into an intermediate downtrend if it breaches 6,371. The figure is likely to move up to around 7,000 if the market rallies early this week. It is best to assume that we are in an intermediate uptrend, as most stocks are in one, and a global uptrend is on. 
LONG-TERM TREND: 
Our market's long-term (major) trend is up. A close below the last intermediate bottom of 14,600 would end the bull market for the Sensitive Index. The Nifty's equivalent is 4,350, and that for the CNX Midcap Index is 5,600. Nearly 10% of the more heavily traded stocks are now in major downtrends. A continuous increase in this figure would threaten the bull market. The last intermediate downtrend saw the Sensitive Index retrace 77% of the 2,809-point gain made in the preceding intermediate uptrend. A 67% retracement is considered high for a bull market, and this is also a sign of possible longer-term weakness. However, it is still too early to write off the bull market. The majority of global indices are still in major (long-term) uptrends. 
TRADING & INVESTING STRATEGIES: The bull market is now over a year old, and it would be safer to not increase exposure to equity. There is still no reason to reduce exposure either, as the bull market is still intact. Consider switching out from stocks which had fallen to threemonth lows or worse during the previous downtrend. Though most of such stocks are rallying now, they pose a higher longer-term risk. There will be no opportunity loss as the stocks being switched into would also benefit from a general rally. Sectors which looked shaky during the downtrend include telecom, fertilisers, cement and realty. 
GLOBAL PERSPECTIVE: Most global indices are in intermediate uptrends, and a global intermediate uptrend is on. The Nikkei and a couple of European indices are in intermediate downtrend, though. The Dow would fall into one if it goes below 10,150. A majority of markets remain in major uptrends, making this a global bull phase. It would take a fall below 8,000 for the Dow to go into a bear market. 
    The Sensitive Index gained 98.6% in the twelve months that ended on Thursday, up one position to the 5th place among 35 well-known global indices considered for the study. Argentina continues to head the list with a 159.1% gain. Russia, Turkey, Indonesia and the Sensitive Index follow. The Dow Jones Industrial Average has gained 36.8% and the NASDAQ Composite has gained 63.9% over the same period. (These rankings do not take exchange rate effects into consideration) (The author is an independent technical analyst)