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Friday, December 4, 1998
Ignore lack of momentum in Sensex, cash in on opportunities
K Seshadri
The Sensex went down by 12 points to close at 2805. On Wednesday, amidst the markets' failure to develop sufficient momentum, there was a sliverlining. This was the index breaking through the downward slope resistance. As a consequence of this, the index could look for a support at 2773 points (and not a scary free fall), should the market go down. This was mentioned in this column yesterday. For the last three sessions, the Sensex has been moving sideways. Looking at the technical position of several pivotals, the index would oscilate between tracing a horizontal line and sloping down slightly. But importantly, should it move down, it can look forward to taking support little below. In other words, you could have a control over your risks. And while this takes place, pivotals have a chance to consolidate and firm up. The further direction of the market would then depend upon the level of expectation, anticipation and sentiment of the market participants. The market does not show any undue bearish sentiment.It is just cautious. At the time, traders are not giving up their positions in important pivotals like Telco, Tisco and others. The depression in finance stocks is understandable, given Standard & Poor's apprehensions.But look at the lively opportunities that emerged in Dr Reddy's Lab. or Bajaj Auto. Both scrips were at comparatively lower and did not find the market mood inhibiting. But the brisk upmove at the Bajaj counter goes to prove that you should not allow the Sensex picture to intimidate you, in which case you lose up on opportunities. Britannia is another example, though supported by FII buying. And this trend is likely to continue. What you will see is opportunities as pivotals with strength bounce up and down on alternate days. Technically the stochastic indicator is very much in positive territory, signalling you to go long. The lack of momentum in the Sensex should not make you blind to opportunities that arise from day-to-day. Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.

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