A bounce is likely

Updated: Jan 31 2002, 05:30am hrs
A sharp fall on Nasdaq had a major impact on opening prices, and the first- half of the day witnessed lackluster trading. The second-half however saw recovery, and a few counters also managed to close at the days highs. With a rise of more than 6 per cent, NIIT was the major gainer on Wednesday.

However, the index closed 15 points lower as stocks like Infosys, Dr Reddys Labs, HLL, and MTNL closed in negative territory.

For index, a support exists at around 3250 points, and the immediate resistance is at around 3335 points. A positive move is not ruled out. The fall on IT related counters have shown a slowdown in the last few trading sessions. Although signs from Nasdaq are negative, the market has not shown major decline. This is a positive sign, and suggests a recovery which could be waiting for a trigger.

Infosys, however, is one of the weakest counter although a major fall from the current level is ruled out. Long position should be taken only once it crosses Rs 3,900.

Satyam Computer, however, may show a bounce, and one can think about long position. Wipro may also display a positive trend in the short run.

Digital Global continues to remain the strongest counter, and will be amongst the first one to recovery as and when sentiment improves. Global Tele, NIIT, HCL Techno have also shown a good consolidation, and a recovery is not ruled out. NIIT has already recovered smartly from its intra-day low. The level of Rs 205 is an important base for the stock, and long position should be liquidated only below this level.

But the position of Zee, HFCL and SSI is not as encouraging. Among the second rank counters, Visualsoft managed to remain strong for a major part of the day, and further improvement will not bring surprise. Mastek, Aftek Info, and Polaris may also show a firm trend. Selective buying is also likely on old economy counters like BHEL, ACC, Grasim, Telco, ITC and SBI.

(The analyst has long position in Digital Global, Polaris, Mastek)