The intermediate uptrend is already three weeks old and there are no immediate signs of an intermediate top forming. Had the current intermediate rise been a rally, it would have fizzled out in two to three weeks; but with the intermediate uptrend still going strong, it appears that the intermediate rise is within the new bull run. An intermediate uptrend in a bull run last for three weeks to three months while an intermediate uptrend within a bear market last for two to three weeks.

Apart from the new economy stocks which have been bullish and have been gathering the attention of the investors as well as traders, there are a few sectors in the old economy which will also contribute to the bull run and investors must diversify their portfolio and must also hold stocks in the old economy sector. This will reduce the risks as the new economy stocks are high-risk stocks. This was seen in the last few months. Today, I will take a look at the paper sector as a few stocks in this sector have bottomed out and a few more are likely to bottom out soon. I will look at only the stocks, which are technically strong, and investors must refrain from taking long positions in other low priced stocks in this sector.

Ballarpur Industries
Ballarpur Inds. was the one of the first stocks in the paper sector to have gone into major uptrend. The stock has exhibited ascending intermediate tops and bottoms. At higher levels, the stock is facing a resistance, but with the major trend of the stock turning up recently, investors must hold on to the stock. Those investors who have sitting on the sides must wait for the stock to pull back towards the 30 WMA to pick up long positions in the stock. The next intermediate rise in the stock will be quite strong and investors must get into the stock well in time i.e. in the pull back towards the 30 WMA. The relative strength line for the stock is bullish as it is above its triggepr line and has been rising.

ITC Bhadrachalam
ITC Bhadra has exhibited ascending intermediate bottoms and could be in a major uptrend. This will be confirmed once the stock crosses its earlier intermediate top of 45.60 in the current intermediate uptrend.

The relative strength line for the stock has moved very close to its trigger line and a further improvement in the stock could result in the relative strength line closing above its trigger line. Currently, the stock is facing a resistance at the 30 EMA and this intermediate uptrend will decide the fate of the major trend of the stock. If the stock is unable to cross its earlier intermediate top in the current intermediate uptrend, it will do so in the next intermediate uptrend and investors must pick up long positions in the stock in the next intermediate downtrend.

Orient Paper
Orient Paper is also in a major uptrend as the stock has moved well above its earlier intermediate top and is rising 30 WMA. The relative strength line for the stock has been very bullish indicating that the stock is outperforming the indices and investors must hold on to the stock. Many of the old economy stocks have been correcting and the stock has a strong resistance at the current level and could pull back towards its 30 WMA. This must be used by investors to get into the stock as the next intermediate rise by the stock is likely to be very strong. The current rise in the stock has been accompanied by a rise in volume, which is a very bullish sign.

TN Newsprint
TN Newsprint also bottomed out recently and is in a major uptrend as the stock completed a double bottom formation and moved above its 30 WMA. The relative strength line for the stock also moved above its trigger line, indicating that the stock is outperforming the Sensex and investors must stay invested in the stock. Few investors who have yet to pick up long positions may use the correction in the stock to pick up long positions. The next correction will pull the stock back towards its 30 WMA and long positions in the stock can be picked up in the next intermediate downtrend.

The stock has exhibited higher major bottoms which is a very bullish sign indicating that in the current major uptrend the stock will cross its earlier major top.

Sirpur Paper
Sirpur Paper is also in a major uptrend as the stock broke out with a gap above its 30 WMA and its strong descending trendline. The relative strength line for the stock has also moved above its trigger line which is a bullish sign, but the trading volume is not strong and this is a bearish sign and investors must stay away from the stock even if the major trend of the stock has turned up and the relative strength line for the stock is bullish. The breakout of the 30 WMA also did not occur with a spurt in volume, which is a bearish sign.