| A sharp sell off on Friday pulled the Sensex back below the five-figure mark. The index closed at 9981.11 points for a week-on-week loss of 1.28 per cent. |
| The Nifty declined more sharply for a loss of 1.52 per cent closing at 2981 while the Defty lost over 2 per cent as the rupee also corrected against the dollar. |
| Breadth signals were poor. Volumes declined through Thursday and Friday and advances were outnumbered by declines. The BSE 500 lost 1.17 per cent. |
| Outlook: This appears to be a short-term correction. There could be one or two more sessions of weakness followed by a turnaround from an intra-day low around Nifty 2950 (Sensex 9850). We would expect another upwards move towards the latter half of the week. |
| Rationale: The indices have dropped into a range where there is quite a lot of support. This seems like a bout of standard profit-taking rather than a generic sell off. |
| Target projections seem to suggest that there is a little downside but the pre-Budget optimism should ensure that it doesn't go too far. Momentum indicators suggest that the market is already heading into an oversold region. |
| Counter-view: The mood around Budget-time is always volatile. If the supports at Nifty 2940-2950 are broken, there could be a downside until 2915 (9675). This doesn't appear likely to happen in a pre-Budget scenario but a chance remark by the FM could trigger off another sharper sell off. |
| Bulls & Bears: The sell off was fairly widespread though most stocks have landed on or near supports. Perhaps the worst hit was the financial sector "� most banks saw a hammering with PNB and Bank of Baroda both breaking key support levels. |
| The oil PSUs were also fairly badly hit with ONGC breaking a support while BPCL, HPCL, GAIL and Kochi Refineries declining sharply and landing on support. There was normal profit-taking in FMCGs such as HLL and ITC which had both seen a strong run up. |
| Very few stocks bucked the market trend. IT shares did hold value probably because these are viewed as a hedge against a declining rupee. Dr Reddys moved up against the trend of the market and so did GE shipping, NDTV and Zee. Among IT stocks, Infosys, Patni and Wipro looked capable of maintaining a bullish profile |
| MICRO TECHNICALS |
| ONGC Current Price: 1122 Target price: 1050 |
| ONGC broke an important support when it closed below 1150. The target projection on this formation would be about 1065 to be achieved in about 5 sessions. In practice, it probably has a downside risk till around the 1050 level where there is good support. Keep a stop at 1150 and go short. |
| DR REDDYS Current Price: 1287 Target price: NA |
| The stock has jumped on a big volume expansion. DRL has yielded a stunning return of well over 50 per cent in the past 10 weeks. It's difficult to set a target with this sort of near-vertical movement. Keep an initial stop at 1250 and go long. Use a trailing stop. |
| HINDUSTAN LEVER Current Price: 230 Target price: 225 (downside), 255 (upside) |
| A sharp climb from 200-level to around 239 has been followed by profit-taking and a selloff. There is good support at 225 and HLL is likely to consolidate between 225-235 and then move up. Keep a stop at 225 and accumulate. If HLL closes above 240, it is likely to hit 255. |
| INFOSYS Current Price: 2785 Target price: 2850 |
| The stock moved up from a support at 2750. It is capable of going forward since there is not too much resistance between the current price and 2850. If volumes improve, the stock is perhaps capable of breaking the resistance at 2850 as well. Keep a stop at 2750 and go long. |
| PATNI COMPUTERS Current Price: 487 Target price: 500,525 |
| The stock rose on strong volumes despite a falling market. It has resistance between 490-500. if it closes above 500, it will have an upside till around 525. Keep a stop at 480 and go long.. Book partial profits at 500. |
| (The target price and projected movements given above are in terms of the next five trading sessions unless otherwise stated.) |
Top Section
Explore Business Standard