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B. Krishnakumar

THE trading activity last week was curtailed to four days on account of market holiday on Monday. The stock market sentiment continued to remain negative with all the three-benchmark indices closing the week on a subdued note.

Growing concerns about the pace of economic rebound appears to have played a key role in affecting general market sentiment. Though there was some recovery on Friday, it was limited to Dow Jones Industrial Average and the S&P 500 indices.

The tech-laced Nasdaq Composite Index closed on a weak note on Friday. The drop in share price of market heavy weight Microsoft Corp, played a key role in pulling down the Nasdaq Composite Index.

For the just-concluded week, the Dow Jones Industrial Average registered a drop of 1.8 per cent while the S&P 500 declined by 1.5 per cent. The Nasdaq Composite Index lost 2.8 per cent for the week.

With the break below 1640, the outlook for the Nasdaq Composite Index has now turned bearish. A drop below 1598 could result in a further slide in the index. In the present market condition, a break above 1760 is the minimum requirement to reverse the bearish trend.

Going by the market action over the last few weeks, the Nasdaq Composite Index would find it difficult to clear the immediate resistance at 1710 level. A decline below 1598 would an early indication of further weakness and a close below 1560 would pave way for a further slide towards 1387 level.

(Note : The analysis and opinion expressed in this column is based on the technical analysis of the past price behaviour. Analysis and price targets are based on Elliott Wave and Point & Figure techniques. There is a risk of loss in trading)

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