Downtrend likely to slow down

Updated: Jan 25 2002, 05:30am hrs
The trading started on a firm note on Thursday but by the end of the day, early gains were wiped out, and a large number of IT related counters closed in negative territory. NIIT, Polaris, Mastek, and HFCL were the major losers. The index also lost 15 points as counters like Infosys, RPL and ITC showed a dip.

A major support came from HLL which was up more than 2 per cent. The Sensex has broken its immediate base of 3370 points, and the short term position should improve only above 3400 points. On the lower side, the first important support lies at 3300 points. Among the software counters, Infosys remained in a narrow range, and the outlook will start improving above Rs 3950. Wipro also witnessed a range-bound trading, and the outlook should improve smartly above Rs 1630.

The negative undertone also had an impact on Digital Global which lost 2 per cent. A buying support at lower levels is expected. Satyam Computers also closed in negative territory but the fall is likely to slowdown. The performance of counters like NIIT, SSI, HFCL, Global Tele was also negative but a major fall from the current levels is not likely.

The second rank counters, meanwhile, witnessed strong selling pressure. Mastek lost the most. It broke its first important base of Rs 260, and the next base is likely at around Rs 220. Polaris also lost more than 5 per cent but the outlook will change only below Rs 160.

The performance of Aftek Info was relatively better but the position will start weakening below Rs 340. The outlook will turn bullish above Rs 385. Overall, the IT related counters have shown a negative trend for quite some time, and reversal is around the corner.

Among the old economy counters, HLL did very well. With the latest jump, the level of Rs 210 becomes an important base for medium term players. RPL closed in negative territory and a further decline will not bring surprise. Reliance, ITC, SBI, Grasim, Telco, Tisco and Bhel, however, may do well.

(The analyst has a long position in Reliance and Digital Global)