Tech Stocks May Turnaround

Market rumour can certainly alter sentiment. The latest buzz is about heavy PSU buy-orders out of Delhi. Operators have interpreted that as bureaucrats expecting a major push on the disinvestment front, perhaps with Budget-related announcements.

Who knows, the rumour may be right or wrong. But it will drive the market for a while and those who act on it are unlikely to be subjects of Sebi investigation for insider trading!

The Sensex closed with a recovery driven by this rumour. After hitting a critical support at 3275 on Wednesday, it closed out at 3333.92 points, for a very nominal week-on-week gain of 1 point. The Nifty ended at 1081.75 for a W-W nominal gain of 2 points. The Defty lost a little ground as the rupee slipped a bit. The broad-based BSE 500 gained 1.26 per cent. Breadth was neutral with almost as many gainers as losers. Volumes improved on Thursday and Friday.

 

Next week should see the fervour in PSU stocks translate into a more general upmove. However, the market sentiment looks to be led by PSUs unless and until there are further clarifications regarding the current rumour-related speculations.

The broad market is maintaining support at the vital 200 Day MA mark of around 3275 and this is a bullish signal. There will be some resistance at the 3365 level and stronger resistance at around 3400 and then again at 3450. Either we will get a slow climb through this 3365-3450 zone, or there will be sharp volume expansion and a turnaround in the tech sector, driving the market up quickly.

A turnaround in tech looks possible. This sector is critically poised