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Uptrend
likely to continue
Deepak Singh Tanwar
The recovery gathered momentum
and software stocks showed impressive gains on Thursday. As
a result, the index gained 38 points and the trading volume,
too, showed a smart improvement. Infosys, Satyam Computers,
Zee Tele, NIIT, Mastek, Polaris and SSI were the star performers.
Among the old economy, SBI, Tisco, Grasim, Dr Reddy’s Labs
and Bhel gained smartly.
The index has also crossed
its first resistance of 3300 points. The level of 3200 points,
however, continues to remain as an important support point.
A steady improvement will continue. The rally on the Infosys
counter was impressive and a further improvement is not ruled
out. The level of Rs 4,650 is a major resistance. Digital
Global is struggling to move above its first resistance of
Rs 520 and is expected to cross it. Satyam Computers also
gained 7 per cent, but selling is not ruled out at higher
levels. A major hurdle is expected at around Rs 275. Wipro
remained firm. NIIT, SSI and Zee Tele showed handsome gains
and the trend is likely to continue. HFCL, Global Tele, HCL
Tech may also get buying support. Among the second rank stocks,
Mastek stole the limelight. It gained 20 per cent and further
improvement will not bring surprise. Visualsoft and Polaris
may also do well. While improvement is not ruled out for software
counters, one needs to be cautious at higher levels. The performance
of the old economy counters was also impressive. SBI gained
smartly and the position remains favourable. It has a major
hurdle at Rs 220. Dr Reddy’s Labs also improved and the outlook
remains positive. Tisco, Bhel also showed improvement and
a positive to sideways move is expected.
Counters like L&T, ACC,
Grasim are expected to show a mixed trend. Reliance, however,
failed to advance. Yet, the position will weaken only below
Rs 290. The position of RPL remains negative and one should
wait for consolidation for fresh long positions.
Overall, while improvement is expected, one needs to be cuatious
at higher levels.
(The analyst holds long
position in Infosys, Mastek, NIIT and Digital Global)
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