The Sensex has finally showed some signs of a correction -- the 61-point fall on Friday was just that. Except a few stocks, most of the pivotals witnessed huge selling pressures. Reliance, SBI, Bhel, MTNL, HPCL, and Bajaj Auto contributed the most to the Sensex fall. On a weekly basis, too, the Sensex has lost 60 points. The current position of the Sensex suggests that the fall is likely to continue, provided two main counters do not show an uptrend.On Friday, ITC and HLL closed higher. Had these counters showed a negative trend, the Sensex would closed much lower. ITC appears very strong and is expected to show a positive trend in the days to come. On the downside, the stock has a good support at Rs 1060. On the upper side, it could face a minor resistance at Rs 1150. Above this level, it would enter into a least resistance area, which would signal a start of a fresh bull-run. For HLL, the support lies at Rs 2,190.
But the position of other couters is far from impressive; at least for the short-term.A correction in counters like Reliance and SBI is likely to last for some more time. Reliance has a good support at Rs 160. HPCL, MTNL and Bhel are also weak. Bajaj Auto, too, can shed some more points. Overall, as a majority of pivotals continue to show a correction, the Sensex may also witness a decline. On the downside, the Sensex has a support at 3821 points. On the uppper side, it would face a resistance at 4322 level.
With the overall market, the Tata counters also showed a correction. Tisco, Telco and Tata Tea were the first to fall. ACC, however, remained strong throught the week. The fall in Tisco, Telco, Tata Chemicals and Tata Tea is expected to last for more time.
While a correction in pivotals did not come as a major surprise, a sharp decline in the software counters on Friday was unexpected. Led by Satyam Computers, almost all software stocks gave a fresh buy signal on Thursday. While the opening on Friday was strong, a sharp fall occured during the later half of the day. If this fall isany indication, the break-out seems false and hints toward a further fall.
Satyam could turn weak once it break the Rs 1,474 level. For Pentafour Software, the support lies at Rs 1120. While HCL enjoys support at Rs 413, Infosys' support is at Rs 3,045. NIIT was the only stock which closed higher on Friday. The stock still looks attractive. Among the other specified stocks, a correction is likely to continue in counters like Cochin Refineries, Colgate-Palmolive, Dabur, Dr.Reddy's Lab, Escorts, Hero Honda, ICICI, Indian Rayon, Philips, and Voltas.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
Printer-friendly page
