The rally, which took the Sensex from 4,052 points to 4,790 points, was nothing but a corrective move. Although the level of 4,050 was a higher base than that of 3,832 points in July, it still remains below the major hurdle of 5,059 points. As such, for medium-term players, the buying opportunity will be difficult to trace in the next 10-15 days before the Sensex makes a fresh reference point for long positions.

On the downside, the Sensex has a major base at around 4,170 points. Till that level, no significant support exists. Individually speaking, the position of heavyweights like the State Bank of India (SBI), Maharashtra Telephone Nigam Ltd (MTNL), Larsen & Toubro, Hindustan Lever Ltd (HLL), Zee Tele, Satyam Comp, and NIIT is not very impressive from the medium-term point of view. Infosys has not shown a fall but may not sustain itself at higher levels. This may affect the index in the medium-term.

ITC and Reliance are however, better placed but may not be able sustain the market alone. As such, one should be very cautious of fresh long positions, and one can make an exit from stocks epsecially from the software counters. Re-entry can be considered at a later stage. Overall, the buying side should be very selective in the coming weeks. Among the software stocks, NIIT, Dig Equipment, and Aptech appear weak, and may fall further.

Sterlite Besides Reliance, Sterlite is the only stock in the specified list which is close to its all-time high. In its previous week's move, the stock moved above an important resistance of Rs 960, and has taken a rest near its all-time high of Rs 1,220. One can take a long position with a stop loss of Rs 1,075. For those who wait for confirmation, the long position should be taken above Rs 1,220.

Indian Shaving
The stock has made a good base at Rs 750, and has moved above its short-term resistance of Rs 880. The trading volume has also shown a sharp improvement in the recent past. It has improved from an average daily volume of 2000 shares to one as high as 30,000 shares. The RSI oscillator has also given a positive divergence. One can take a long position with a stop loss of Rs 750. For extremely short-term players, the Rs 825 position can also be used as stop loss.

Mirc Electric
The stock has been posting higher bottoms, and is above short-term resistances. The position of the RSI oscillator has also turned impressive, and hints at a positive outlook.

It has a small base at Rs 475 which can be used as a stop loss for long positions. On the upper side, the uptrend may gather momentum above Rs 600.

E.Merck
After showing a corrective rally from Rs 260 to Rs 412, the stock has dipped below its first support of Rs 365. This is an extremely negative signal if one were to consider its main trend which is downwards. One can make an exit from this counter at this juncture. A re-entry can be considered at a later stage.

Hindalco
The stock has moved above all short-term resistance. One can take a long position with a stop loss of Rs 880. The uptrend may gather momentum above Rs 960.

SBI
One can sell this stock with a stop loss of Rs 208. The recent rise on this counter was more of a corrective nature, and the main trend for the stock is down. The fall will accelerate below Rs 196. The next major support for the stock is at Rs 175.