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Selective stocks may do well
Deepak Singh Tanwar
THE Securities and Exchange Board of India (Sebi) directive to ban
deferral products had a negative impact on opening prices but the
performance thereafter was encouraging. Old economy counters managed
to do relatively well and new economy stocks like Infosys, Digital
Equipment, Sterlite and Wipro showed a smart recovery. Other counters
also gained steadily from their respective lows.
As a result, the Sensex, which was down 149 points in the first
10 minutes, recovered 160 points from the low and was up 8 points
on Tuesday. With this, the latest low of 3420 points becomes an
important support level for the index and can be used as an important
reference point for long positions. On the upper side, however,
the level of 3650 points will be an important resistance.
Like other stocks, IT counters too recovered from their lows. In
case of Infosys, the level of Rs 3,750 can be used as stop-loss
point for long positions. The outlook will further improve above
Rs 4,100. Satyam Comp has made a bottom at Rs 210 and should be
treated as stop-loss. For Zee Tele, the stop-loss for long positions
is Rs 105.
Among the old economy, HLL continue to remain dull. ITC has shown
a reasonable fall in the last three days, and a sideways move is
likely. SBI may also move in a narrow range.
Reliance did well and the next hurdle for the stock is at around
Rs 380. The level of Rs 350 can be used as stop-loss for long positions.
RPL is yet to show major signs of improvement. MTNL and Bhel may
show a firm trend whereas selling is not ruled out in Tisco at higher
levels. The outlook for Cipla also remains favourable.
The performance of cement counters was also positive. The outlook
for Grasim, L&T and GACL continues to remain positive. The lows
formed on Tuesday should be used as stop-loss levels for long positions
in these cases. ACC is relatively weak.
Overall, while the market is clear on one front, selective stocks
are likely to do well in the near future.
(The analyst does not hold any position in the stocks mentioned
in the article)
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