Narrow movement likely to continue

Deepak Singh Tanwar

THE index remained in a narrow range on Tuesday, and was up marginally. The performance of Ranbaxy, Dr Reddy, SSI and Sterlite Opt was positive. HCL Tech, Global Tele and Wipro, however, remained under pressure for a major part of the day.

As the range for index has been narrow, the position of index does not change drastically. The position will start improving only above 3360 points. The fall may gather momentum below 3270 points.

Infosys managed to remain firm but yet to move above its main hurdle of Rs 4000. The level of Rs 3840 can be considered as an immediate base. Zee Tele also remained firm, but the uptrend has shown a slowdown.

The stocks is in resistance territory. Satyam Comp showed marginal gains. The level of Rs 160 is an important support for this counter. Digital Equipment remained under pressure but position will weaken only below Rs 460.

The performance of Indian pharma stocks was positive. Dr Reddy, and Ranbaxy remained in demand. In the case of Ranbaxy, the level of Rs 590 should be used as stop loss for long position.

As for Dr Reddy, the outlook remains positive, and the level of Rs 1760 is an immediate base. Cipla also remain in good health. The outlook for Tisco, SBI, Tata Tea and Telco is yet to show signs of improvement. RPL also remains under pressure, and a further decline is not ruled out. Reliance may also remain under pressure.

As for MTNL, the bounce is a welcome relief but the medium term position is yet to show major improvement. Bhel may show a bounce but will have difficulty in sustaining at higher levels.

The performance of cement counters was negative, and a further decline on these counters is not ruled out. Overall, baring few Indian pharma stocks, the outlook for other stocks is not very encouraging.

(The analyst holds a long position in Dr Reddy’s Lab)