Market review

Trade cautiously as bears seem to be in control of markets: Analysts

The Indian market remained volatile throughout the week ended February 1, with the Sensex slipping 1.60 per cent and the Nifty going down by 1.25 per cent. Profit booking was witnessed during the week, which kept the market sentiment bearish.

"The week gone by seems to be the turning point for the market at least from short to medium-term perspective. The bears seem to have turned the table in their favour and traders are advised to take bets cautiously," said analysts.

"Despite multiple events, it was a disappointing week for the bulls. On the weekly chart, the Nifty has formed a 'bearish outside bar' and this bearish bar pattern has been formed at the weekly upper Bollinger Band, which increases its significance," said Gaurav S. Ratnaparkhi, Technical Analyst at Sharekhan Ltd.

The markets are likely to open higher on Monday tracking gains in the US stocks, which rose to their highest level in five years after jobs and manufacturing data showed the economy's recovery remains on track.

However, a sudden slump in the share price of Tata MotorsBSE -4.36 % and Ultratech CementBSE -2.17 % in late market hours on Friday is likely to weigh on the markets in the Monday morning trade.

In the absence of any major triggers lined up for next week, the markets will look up to global markets for further cues and stocks such as Tata Motors, M&M, Hindalco Industrues Ltd and DRL will be in focus as they are lined up to declare their quarterly earnings in the coming week.

"In the coming week, investors and analysts will closely watch the management commentary that would accompany the result which could cause revision in their future earnings forecast of the company for the current year or next year," Sharekhan Ltd said in a report.

Important results to track for the coming week include those of Bank of BarodaBSE -0.03 %, CiplaBSE 1.58 %, ACCBSE -0.20 %, Ambuja Cement, Mahindra & Mahindra, Sun Pharmaceuticals, Hindalco IndustriesBSE -1.99 %, ONGCBSE -2.12 %, Tata Power CompanyBSE 1.43 %, Tata SteelBSE -1.00 %, Coal IndiaBSE 0.62 %, BPCLBSE 2.80 %, Tata Motors, Dr. Reddy's LaboratoriesBSE 1.48 % and Ranbaxy LaboratoriesBSE 0.21 %.

The market will also eye HSBC India Services PMI for December 2012 on Tuesday, February 05, 2013 unveiled by Markit Economics.

Technically the Nifty is now trading below its 20-DMA which is placed at 6028 as well as the psychological mark of 6000, as tepid earnings and RBI's draft guidelines on bank provisioning requirements hit investor sentiment.

"Nifty has broken out on the downside from an 'Ending diagonal', which is a bearish pattern in this particular case. On the daily chart the Nifty has started forming lower top lower bottom formation, which is a bearish sign as per Dow Theory," said Ratnaparkhi of Sharekhan Ltd.

Ratnaparkhi is of the view that the daily momentum indicators are in line with the price fall and all these technical observations suggest that the Nifty is in for a significant decline.