IT stocks may remain weak

Deepak Singh Tanwar

THE performance of select old economy counters was impressive and software stocks showed a mixed trend on Wednesday.

Meanwhile, the index managed to gain 15 points. Stocks like RPL, Tisco, Zee Tele, Ranbaxy, Hindalco and HLL contributed whereas Infosys and Bhel had a negative impact.

The index has been trying to cross the level of 3650 points and attempts till now have yeilded negative results. This further increases the importance of this resistance. On the downside, the level of 3480 is an immediate support.

Like the index, Infosys has also failed to cross its important hurdle of Rs 4,100, and the outlook will remain weak unless this level is crossed.

Now, the chances of it breaking the level of Rs 3,700 levels are higher and the position will weaken further below this level.

Satyam Comp showed a firm opening but the performance thereafter was negative.

In this case, the level of Rs 245 is an important resistance and the outlook will improve only above this level. The level of Rs 210 can be considered as an immediate base.

The performance of Zee Tele was impressive. The stock gained 5 per cent.

While the stock has done very well in the last few trading sessions, it has a strong resistance at around Rs 140.

And selling is not ruled out at higher levels. The level of Rs 117 can be used as stop-loss.

Among the heavyweights, HLL improved marginally and the level of Rs 205 can be used as stop-loss for long positions.

For Reliance, the level of Rs 375 can be considered as an immediate hurdle. The stock has a support at Rs 352.

RPL also showed impressive rally and the level of Rs 46.50 can be used as an important reference point for long positions.

For SBI, the level of Rs 247 can be considered as an important hurdle.

In case of ITC, the level of Rs 785 is the first resistance and the base lies at Rs 756 below which the position will weaken further.

The performance of Bhel and MTNL is likely to be mixed in the near future. Tisco did very well and is likely
to face a hurdle at around Rs 140.

Telco also showed a jump and the level of Rs 74 can be used as stop-loss for long positions. Pharma stocks also did well and the trend is likely to continue.

The cement stocks opened firm but showed a weak trend for the rest of the day. A sideways move is likely on these counters.

Overall, the outlook for IT stocks remains negative whereas few old economy counters may do well.

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