Short-term bias bullish

The markets rallied smartly last week led by frenzied buying in metal stocks. The BSE Metal index gained a whopping 11.4% (1,226 points) with the heavyweights SAIL, Tata Steel and Hindalco — the three stocks amount for almost 59% weightage in the index of 15 stocks — making sharp gains.

The Banks, FMCG and realty stocks also witnessed considerable buying activity. While Infosys’ lowering its guidance for the full-year had limited impact on the technology stocks, pharma stocks continued to sag.

The Nifty is close to its short-term target of 4520. The index has reached here rather sooner than expected. The index touched a lifetime high of 4514, and ended the week 120 points higher at 4505

With momentum on its side, and the index in unchartered territory, it will be difficult to set an upside target for the Nifty. The bulls are unlikely to give up initiative. However, one may see some profit-taking around the 4600-4690 level.

The short-term bias remains extremely bullish as long as the index trades above the 4420-mark.

The Sensex, from an intra-week low of 14,830, soared to a new high of 15,331 — a swing of 501 points during the week. The index finally ended with a gain of 309 points at 15,273. The Sensex may rally to 15,500-15,780. On the downside, the index is likely to find considerable support in the range of 14,930-15,100 for remaining part of the month.

The CNX 100 index, which ended with a gain of 126 points at 4433, is likely to touch the 4530 level this week, with an eye on 4700 in the short-term. On the downside, the index is likely to find support in the range of 4340-4370.