Sensex crosses first hurdle

Deepak Singh Tanwar

THE market remained firm throughout the day and the Sensex managed to gain an impressive 78 points on Thursday. While the main boost came from old economy stocks, IT stocks like Infosys and Satyam Comp also made their contribution. Among the old economy stocks, Reliance, RPL, L&T, Bhel and MTNL were the main contributors.

With the latest jump, the index has managed to move above its first major hurdle of 3650 points.

This is a positive indication as far as the index is concerned and the next resistance is at around 3820 points.
On the downside, while the first support is at around 3580 points, the level of 3480 points should be considered as a major base now.

Among the heavyweights, Reliance showed a smart move. The next major resistance for the stock is at around Rs 400. RPL has also showed a good move but a strong hurdle is likely at around Rs 55.

HLL remained dull and the trend is likely to continue. As for SBI, the level of Rs 246 will continue to act as major hurdle. The level of Rs 236 can be considered as the first support. ITC remained weak and the position will not improve unless the level of Rs 785 is crossed.

MTNL has also improved during the second half of the day. The outlook will improve further above Rs 155 whereas the level of Rs 145 can be used as stop-loss for long positions.

Tisco also remained firm and a consolidation is likely in the range of Rs 133- Rs 145. Bhel improved smartly and the trend is likely to continue. The outlook for Cipla and Tata Tea also appear positive.

The performance of cement counters was impressive. Barring GACL, all the other stocks gained smartly. The outlook for these counters remains positive. Among the IT stocks, Infosys gained 3 per cent but the outlook is yet to improve. The position should improve only above Rs 4,100.

Zee Tele remained under pressure and the level of Rs 126 will act as the first hurdle. In case of Satyam Comp, the position will weaken below Rs 228.

Overall, select old economy counters will continue to do well, and the IT stocks may show mixed trend.

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