While the fall was alarming, the Sensex is still above its medium-term support level 4,470. The bounce-back has occurred before touching this level, which is a positive sign. The credit for the bounce-back should go to Infosys and NIIT. Both these counters showed a smart rally on Friday. The rally also forced short-sellers to cover their positions. For a positive market, the Sensex should not break the 4513 level.

Overall, the position of most of the pivotals is weak. HLL is weak, but near its support levels. The stock has a good support at Rs 2,370. The position of ITC is also far from impressive, except the fact that it is near its support level of Rs 920. After this, the support exits at Rs 870. The position of number three counter -Infosys is excellent, the uptrend is likely to continue. For SBI, the rally during the second half of Friday was nothing but a short-covering. The stock has a major resistance in the range of Rs 220-228. Unless it crosses this level, the bear operators would have a strong hold on this counter.

The position of Reliance, however, is comparatively better. The stock is likely to show an improvement. Bhel has shown a sharp drop, and is weak. The only thing which is expected from Bhel is a technical rally which may find it difficult to sustain. MTNL is equally bearish. The bear operators would have a strong hold on this counter. HPCL is comparatively better. NIIT is better, and Ranbaxy is near its support level.

The position of most of the Tata counters remains weak. ACC has shown a technical correction, and will require to post a higher bottom for a good upmove. Telco has broken the Rs 296 level which was an important base. Unless it crosses the Rs 307 level, the bear operators would have a strong hold on thiscounter. Tata Tea is the only Tata counter which is showing some promise. The stock is likely to show a rally.

As for the software stocks, the outlook is very positive. Satyam has given a good close, and is likely to maintain the uptrend. One can take a long position with a stop loss of Rs 905. As for Pentafour, the stop loss is at Rs 580, HCL and Digital also appear strong.

Among the other counters where positive move is likely are: Asian Paints, Bharat Forge, Cadbury, Ceat, Corporation Bank, Dr.Reddy's Lab, E.Merck, Escorts, Essel Packaging, German Remedies, Godrej Soaps, Grasim, Gujarat Ambuja Cements, HDFC Bank, Indian Rayon, Indo Gulf Corporation, Phillips, and Titan Industries.