The day started on a weak note but recovery set in during the second half of the day. Tech counters gained smartly from their lows and the Sensex gained one point. The performance of old economy stocks, however, was far from impressive. HLL, SBI, L&T, ACC, Tata Tea, Grasim and Dr Reddy dipped sharply and had a negative impact on the index.

The Sensex remained in a narrow range and the outlook continues to be negative. The level of 3867 is a major hurdle and it may witness selling pressure well below that level.

As for the downside, the first major base is at 3436 points and the next support lies at around 3200 points. The cause for concern for the index could be HLL. Others like Reliance, however, may provide some support. HLL remained under pressure and lost 2 per cent on Monday. The level of Rs 217 is an immediate hurdle and the next major hurdle for the stock is at Rs 225. The downtrend may gather momentum below Rs 205.

Reliance is yet to dip below Rs 370, and unless that happens the position is reasonable. For RPL, the move is likely to be in the range of Rs 49 - Rs 54 before it shows a clear direction. The chances of a downtrend are bright. SBI continues to dip. Barring a corrective move, the position for the stock is not very encouraging. The stock is below its important support and selling is expected on every rise.

ITC has managed to gain further and has come closer to its first major hurdle of Rs 835. The performance of cement counters was negative. While GACL is below its first major support, Grasim and ACC are yet to break their important bases.

Tisco has managed to remain in a narrow range. The stock has formed a resistance at Rs 138 above which its position will improve. The immediate base of Rs 128 can be used as a stop-loss point.

In case of MTNL, the stop-loss should be Rs 140. For Bhel, the first hurdle is at Rs 148 and the position will improve only above this level. ICICI may show a bounce whereas the position for Ranbaxy continues to remain negative in the short run.

The tech stocks have also witnessed buying at lower levels. A rally is not ruled out on these counters. Infosys will face the first hurdle at Rs 4,500 and the next resistance for stock is at Rs 5,000. For Satyam Comp, the first resistance is at Rs 245 and the next hurdle is only at Rs 265. In case of Zee Tele, the level of Rs 150 will act as a major resistance. Overall, while the sentiment will continue to remain negative, a corrective rally on account of bargain hunting is not ruled out. For those who believe in bottom fishing, tight stop-losses can prove a major help in case of a further fall.

(The analyst does not hold any position in the stocks mentioned in the article)