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K Seshadri
Market is undergoing a slow process of cautious accumulation. This should prove healthy for the market players. The Sensex made a gain of 34 points, or just a little over one per cent. Opening a confident 7 points higher at 2976, it posted an intra day high of 3008. The high was a gain of 34 points over the Tuesday's high. The low happens to be just 3 points down from the opening at 2973, again higher than the previous low of 2947 by 26 points. That is certainly a cautious but firm leg up.
ACC is now digesting its gains and could post just 0.19 per cent gain. With a base line support at Rs 988, the bulls could further accumulate on this counter. Here is a case of long term move.
Bajaj Auto continues to be weak, rather strangely, even from the medium term technical point of view. The price has been moving in the band of Rs 559 and Rs 580 for quite some time now. But, increasingly, the price is lurching towards the base line! Fundamental performance which is lower than in 1997 could well be the reason for the lukewarm performance in the market.
Bhel rewarded those who took the initiative and risk with a 4.3 per cent rise. Earlier this scrip had given way on fears of US sanctions going against it. It is not clear if that picture has changed. The petro stocks firmed up on Wednesday. HPCL, Bharat Petro and Cochin Refineries are refusing to go down. But they are yet to catch fire on the upside. Hindalco moved up further, but the gain in Nalco was very impressive. Nalco could well illustrate the case of the rewards available when you pick up an undervalued scrip.
On the other hand, Indian Aluminium is undergoing profit booking. It had surged from Rs 70 to Rs 90. Earlier, the scrip was at Rs 50. Sterlite is slowly inching up.
SBI moved up firmly today with volumes. The volume is an indication for long term investors to accumulate. There is no escape, however, from periodic reaction in the short range. Tata Chem made a robust 7.38 per cent gain. On the daily charts for Sensex, the RSI indicator is above the trigger line indicating an investment stance. The short term stochastic indicator is about to cross over the triggerline adding to the logic for going long on the market.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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