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Jayanta Mallick

THE current operator-driven market may finally see a correction this week. Considering the market indication that the institutional flow may begin from January onwards in anticipation of a sustained bull run, operators are likely to use this week to show a clear floor.

The speculators and traders managed to keep things under control last week even though the market seemed overbought. The strategy of intra-day corrections and time-panned consolidation worked well.

The BSE Sensex broke the bull run last week and after a straight seven-week-long rally recorded a token loss of 5.75 points or 0.17 per cent.

The rally pushed up the benchmark index by 543 points — from 2,828 in November to 3,471, the last week's high. This was one of the best rallies the Sensex had witnessed since 1990.

The rally has been an interesting study in operators' psychological play on the market. In November, they undoubtedly pulled the market out of a long bear spell.

They have also denied the market a "healthy" correction so far. In the process, aided by some positive news, brought back the confidence into the system. The last week trading indicated that the institutional investors and fund managers were gearing up for an entry.

The strategy for the operators for this week could be to coincide unloading in the cash market in a regulated dose with the end of December derivatives contracts on Thursday. This is likely to be convenient for operators as it could be considered as a welcome correction. Lower price levels would also provide larger inducement for investors to make entry.

According to Mr Vivek Mahajan, a technical analyst, the technical charts are signalling a negative divergence for the Infosys Technolgies stock. "Infosys and Wipro have been the key drivers of the rally that just seems to have taken a break. Last week, the Wipro stock was in a somewhat correction mode. Going by indications in the two weighted counters, a sharp fall in the Sensex and the Nifty may not be out of place this week," he added.

Mr Abhay Aima, an analyst observed that in the recent past, the December- end had generally been volatile. According to seasoned market observers, the open positions of the operators and a handful of hedge funds in the derivatives segment and their trading pattern in the past few days also suggest that there may be a sell-off this week.

According to Mr V.K. Sharma of Anagram Stockbroking, the expiry of the December derivatives contracts is likely to lend weakness and volatility to the market during the week. However, in his opinion, a recovery is expected towards the end.

The technology counters were likely to remain under pressure during the most part of the week and might start rising from Friday onwards, he observed.

"Large operators appear to have written a lot of calls in Satyam Computer Services, Infosys and Digital at higher levels. So these stocks would find it difficult to rise before the options expiry on Thursday," Mr Sharma added.

Mr Saumil Trivedi, a technical analyst, pointed out that the last week's trading showed a conosolidation process in the Sensex range between 3,380 and 3,190 with an intra-week peak at 3,371.

In his opinion, the Sensex level of 3,300 should provide the first support and the more secure one at around 3,240 points.

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