Laborious Markets - Sainik

September 6 is celebrated as Labor Day in the USA. In a strange sort of way the Indian markets also seem to be celebrating it, in spirit, for the past so many weeks, with the Nifty being rangebound between 5350 and 5550.

Every time the Nifty appears near either of the numbers, the excitement is palpable; everyone in the market who is technically inclined is left wondering whether it will break the shackles this time at least.

The Nifty, like a cruel mistress flatters to deceive, again and again. Last week it happened at the lower end of the band, when the Nifty briefly went below 5350, and then bounced back, to close the week out at a respectable 5480 levels.

September was quite a bullish month last year, and a very bearish month during 2008. Which way will this September be?. Will it be another heartbreakingly slow month like this August was. Only time will tell.

There is a well-observed phenomena in the US markets leading to Labor Day: The markets are bullish and then become bearish after the day. This year, the first part of the phenomena has remained true. Will the second part too fulfill the observation? Only time will tell.

As a reader of the article, it is justifiable to expect that the writer would stick his neck out and make some prediction-any prediction-but as our late PM, Narasimha Rao demonstrated very well: No decision itself is in itself a decision. Hence, no prediction itself is in itself a prediction.

However, looking at the market internals, here are some interesting tidbits:

1. FIIs have been selling of late and their purchases have reduced in quantum.

2. The advance-decline lines have been in favour of declines.

3. The mid-cap index looks a little more vulnerable than the frontline.

4. There seems to be a "rotation" of scrips which are leaders in volumes (This has bearish implications).

The pick of the week was Satyam Computers which seemed to have risen from the Ashes, literally. If this week the strength continues, it would certainly be a very good candidate to accumulate at all levels. While Rs 94 is a strong resistance, watch it, and buy it anywhere close to Rs 85. If the results get announced as per schedule then we may see some interesting times for this scrip.

BHEL and Punj Lloyd also look interesting.

Reliance Industries is ready for a short term pop till Rs 980.

ITC will continue to remain an evergreen favorite below Rs 160.

The tech stocks look ripe for a significant correction.

Sugar could be the dark horse going forward for the festival season. Watch Renuka for a quick spurt some time soon.

Patient investors can wait and keep their powder dry since the "best prices" are yet to come and there could be many "Diwali bargains". Until next week then, whatever you do, hope it's profitable.

Yours, friendly neighbourhood analyst...