Profit-booking is likely

Deepak Singh Tanwar

Thanks to sustained buying at higher levels, the uptrend continued on Friday. While the trading volume rose on both the exchanges, the index managed to gain 76 points. Counters like Infosys, Reliance, Satyam Computers, SBI and RPL gave a major boost to the index. As mentioned earlier, the major hurdle for index is at around 3500 points. As far as support is concerned, the level of Rs 3,280 becomes an immediate base. Outlook remains favourable, but profit-booking at higher levels is not ruled out.

Infosys continued its northbound journey and the destination seems to be Rs 4,700. Wipro also showed improvement and the outlook remains positive.

Digital Global did not show any gains, but the undertone is positive. The uptrend on Satyam Computer was surprising and the stock has finally reached its major resistance of Rs 280. Profit-booking in this area is likely, but the medium-term position remains favourable. Zee Tele showed volatility and huge selling was absorbed well in the market. A sideways to positive move is expected. HFCL, Global Tele, SSI and NIIT may also show a sideways move.

Second rank counters like Mastek, Polaris, Visualsoft and Aftek Info witnessed profit-booking. The process may continue in the short run, but the outlook is favourable. Among the old economy stocks, Reliance showed an impressive rally and further improvement will not bring surprise. The next resistance is at around Rs 340. Counters like Tisco and SBI gained significantly and the trend may continue. The outlook for Bhel, Tata Tea, ITC, HLL also remains favourable.

Cement stocks also showed impressive gains, with ACC leading the pack. A minor hurdle for the stock is at around Rs 180 and the outlook continues to remain favourable. Grasim and L&T may also do well.
Overall, while the outlook is positive, profit-booking is expected at higher levels.

(The analyst holds a long position in Reliance, Digital Global, Wipro and HCL Tech)