Profit-booking may continue

Deepak Singh Tanwar

FOR the first time in the last nine trading sessions, the Sensex has shown a negative close. It was down 44 points on Thursday.

Stocks like Infosys, Satyam Comp, ITC, HLL and Reliance were responsible for this fall. The loss could have been higher had RPL not provided some support. The stock gained more than 7 per cent and helped the index. As the index has turned well below 3775 points, the importance of the resistance level of 3651 points has increased further. From index point of view, this level is an important resistance and the position should only improve above this level.

On the downside, a base is at around 3450 points. HLL, which lost 2 per cent on Thursday, may show a firm trend in the near future. RIL is expected to move in a narrow range. RPL which showed a smart rally may also move in a narrow range. SBI has shown a firm trend, and the performance is likely to be positive. The level of Rs 214 can be used by short-term long positions.

ITC also showed a decline, and with the latest fall, the level of Rs 885 becomes an important resistance. It has a good base at around Rs 805. MTNL also showed a sharp decline, and the trend is likely to continue in the short-run before it finds a base. Tisco may also behave in similar fashion. Telco is also close to its resistance level, and selling at higher levels is not ruled out.

The pharma stocks — Cipla, Ranbaxy and Dr Reddy are expected to show a sideways movements. In case of Bhel, the announcement of its quarterly results will play an important role in determining its short-term direction. The cement counters also witnessed selling pressure at higher levels. Profit-booking may continue on cement counters. The position of ACC is however comparatively better.

The performance of IT counters was far from impressive. The fall accelerated during the second half and stocks dipped substantially. In case of Infosys, the outlook will improve above Rs 3,975, and a long position should be taken only above this level. Zee Tele also dipped sharply, and the position will remain depressed unless the level of Rs 117 is crossed. As for Satyam Comp, the next base is at around Rs 200. The level of Rs 236 is an immediate resistance. Overall, the process of profit-booking is likely to continue.

The analyst does not hold any position in stocks mentioned in the article