Markets plunged sharply during the week ended concerned over the statement by the PM that the inflation is becoming a serious threat to the growth momentum. Other factors spoiling the sentiment were rising crude oil prices due to crises in Egypt and fears over the high interest rates impacting earnings of companies in coming quarters.

On the BSE the Sensex ended 388 points lower at 18,008 and the Nifty on the NSE shed 116 points to close below 5,400 level at 5395. Ratio of 1:10 between the stocks touching 52-week highs and lows reflects the despair and negative mood in the markets.

Rumours of possible arrests of some industrialists linked with 2-G spectrum scam are also doing the rounds. Near term trend of the markets will depend on 'how' quickly the Govt comes out of the total paralysis of governance and addresses the macro-economic concerns.

Expectations over the Union Budget are minimal this time. Key data to watch in the coming week are advance GDP estimates for FY11 on Monday and latest IIP numbers on Friday.

For the week ahead chartists predict trading band of 17,650-18,400 for the Sensex and 5,250-5,550 for the Nifty. Short term resistances for the indices would be at 18,240 and 18,540 and 5,480 & 5,555. Strong closing below the levels of 17,900 and 5,360 may see the indices slide further to 17,300 and 5,125 levels. Buy good standard stocks that have stood the test of time. When buying a stock, always consider how far down it might fall in the event your judgment about it is wrong.

FUTURES & OPTIONS
Reflecting the weak undercurrent in the market, volumes were subdued in the derivatives segment. Some market players attribute this to 'short' February series and the Union Budget coming at the start of March series. Sentiment indicators like open interest, put/call ratio, implied volatility and VIX indicate continuation of high volatility with downward bias.

Markets are in highly oversold condition, sharp bounce-back is not ruled out say punters. The stocks from rate sensitive sectors like FMCG, realty, banking and auto witnessed sharp selling. Smaller PSU banks like Andhra Bank, Syndicate Bank and Vijaya Bank may witness mild rally on value buying. After the recent correction private banks like YES Bank, Indusind Bank and DCB are also looking attractive say observers.

Disappointed by the weak Q3 results unwinding of positions was seen in capital goods stocks like Cummins and Voltas. Long term investors can start SIP in these counters from current levels. After the recent battering, presently most 'hated' stocks of RADAG may see a relief rally.

Supported by global cues metal stocks exhibited good resilience in the week ended. Further gains not ruled out in Tata Steel, Hindalco and National Aluminum. Follow up buying was not seen in IT majors like Infosys and TCS. Further weakness indicated. Ahead of the Union Budget modest buying was seen in fertiliser stocks. Buy on declines Chambal and NFCL. True to predictions select pharma stocks Divi Labs witnessed renewed buying interest.

Be just as willing to sell short as you are to buy. Let the objective be to keep with the trend and make money.

STOCK SCAN
After the takeover of Paras Pharma by Reckitt Benckiser the fast growing consumer healthcare market is attracting the attention of large FMCG companies. Companies like Ajanta Pharma, Amrutanjan and others which have established brands and a wide product portfolio are in great demand.

Buy on declines Amrutanjan for M&A gains. Shrewd market players predict target price of Rs 800 in next few months. Seshasayee Paper and Boards Ltd is one of the very few paper mills in the country which has overcome the problem of raw material by using bagasse mixed with hardwood as raw material.

Recent acquisition of Subburaj Papers which had set up paper mill based on eco-friendly secondary fibre will increase the market share and add immen-se value to the company feel industry watchers. Excellent Q3 results and strong growth prospects make the stock good bet for target price of Rs 350 in medium term.

RSWM Ltd is one of the largest producers and exporters of polyester viscose blended yarn in the country. The company is also equipped with in house fabric weaving and processing facilities. With state-of-the-art manufacturing facilities and self-reliant in captive power generation of 46MW the company has shown significant improvement in operating margins in the last few quarters. Buy in the present corrective phase for target price of Rs 300 in medium term.