THE MARKET ended higher again last week, but only just. The Sensex finished a modest 0.09% (13 points) higher, while the Nifty ended up 0.19%. The CNX Midcap index did a little better with a 1.15% gain. HDFC was the top performer among Sensex stocks with a 4% gain. It was followed by Reliance Energy, Reliance Industries and Ambuja Cements — all gaining around 3% each. Wipro was the largest loser, followed by TCS, Cipla, Satyam Computer, Infosys and Dr Reddy’s Labs. Their losses were between 3% and 6%. A couple of stocks which have been listed during the past four months posted the largest gains among the more heavily traded mid-cap stocks. The stocks — Time Technoplast and MIC Electronics — along with India Infoline, surged between 24% and 27% last week. The heaviest losers were SEL Manufacturing, Rolta India, HCL Technologies, Dish TV India and NIIT Tech — with losses between 7% and 15%. INTERMEDIATE TREND: The market remains in the intermediate uptrend, which started on August 17, when the Sensex bottomed out at 13780. Most global markets also began their intermediate uptrend around the same time. The uptrend is now about four weeks old. The levels below which the intermediate uptrend will end currently stand at 15364 for the Sensex, 4453 for the Nifty and 6156 for the CNX Midcap. This intermediate uptrend has seen the Sensex retrace 2,045 points of the 2,089 points it had lost during the last intermediate downtrend. This is a 98% retracement and suggests that the bull market cannot be written off yet, and new index highs are a possibility. In fact, the Sensex was within 43 points of its alltime high before it reversed on Friday, and the CNX Midcap index cleared its previous top. LONG-TERM TREND: The market had come close to entering a bear phase when the Sensex retraced 90% during the last downtrend. The bear market threat has been all but removed with this intermediate uptrend. However, that possibility will crop up again if the indices fail to clear their previous tops (also their all-time highs) by a clear margin. These tops are 15869 for the Sensex, 4648 for the Nifty and 6366 for the NSE Midcap index. The bull market will end if the indices close below their last intermediate bottoms. Hence, a closing below 13780 will signal a bear market for the Sensex. The equivalent for the Nifty is 4000 and 5420 for the CNX Midcap index. These ‘danger’ levels are independent of whether the indices reach new highs or not during this intermediate uptrend. SHORT-TERM OUTLOOK: Global markets started falling again since Friday morning. This may lead to a decline at the start of the week and there’s a possibility that volatility may increase. A strong global decline will endanger the intermediate uptrend, but it should be kept in mind that the market was able to shake off two such sell-offs since this uptrend began. STRATEGY: The intermediate uptrend is already four weeks old, besides which, global markets are under pressure once more. Hence, this is not a good time to make fresh long or medium-term purchases. Long-term investors should switch out of stocks which lagged or declined during the intermediate uptrend. Popular stocks which have lagged the others during this uptrend include Cipla, HCL Technologies, TCS, Dish TV India, Wipro, Satyam Computer, Infosys, Punjab National Bank, Tech Mahindra, GMR Infra, Bajaj Auto, Yes Bank, Divi’s Lab, ONGC, Tata Motors, Bank of India and Petronet LNG. The new global sell-off may increase the overnight risk for swing traders, as we may see a rise in twoway volatility once again. At the same time, large intra-day swings will benefit day-traders — but only those who have a proper risk and money management strategy in place. GLOBAL PERSPECTIVE: A global intermediate uptrend has been on since mid-August. However, not many markets have come close to their July peaks. The notable exceptions are Shanghai — which never went into a downtrend — and the Hang Seng — which has rallied to a new bull market high. The Sensex has done well to come within a few points of its all-time high. The Nikkei had closed at a one-year low and London’s FTSE-100 at an 11-month low in the last downtrend, and the two are almost certainly in bear phases. A closing below 12000 for the Dow Jones Industrial Average can be the trigger for a global bear market. The Dow will go into an intermediate downtrend if it dips below 13000. The Sensex’s gain for ’07 (until Thursday) remains at 13.3%, and is now somewhere between the top third and top half performers among global markets. Shanghai continues to head the list with a massive 97% gain.