Weak trend in key pivotals

B. Krishnakumar

ITC (Rs 769): The short-term trend continues to remain weak. As mentioned last week, the scrip has the potential to edge below Rs 744. The scrip was unable to settle above the resistance level of Rs 795.

After an intra-day above break this level, the scrip had to contend with a sharp slide on Thursday. Existing holders could look for opportunities to trim exposure in the stock. Fresh buying may be avoided for the time being. Price upmoves could be used to reduce exposure in ITC.

Hindustan Lever (Rs 193.5): As expected, the trend in the stock turned weak in the previous settlement. The share price of the company closed on a subdued note at Rs 193.5 on Friday. Similar to ITC, existing holders of Hindustan Lever could use price rally to book profit. Fresh buying may be avoided for the time being as the overall trend in the counter is still bearish.

Infosys Technologies (Rs 3,760): Contrary to expectations, the trend in the stock turned extremely weak. The violation of the support level at Rs 4,090 (mentioned last week) has negated the positive outlook for Infosys. A decline below Rs 3,600 would aggravate the short-term decline in the stock. Going by the price action, it appears that the scrip would retest the previous major low at Rs 2,780.

Satyam Computers (Rs 212.4): The failure to move past the resistance level of Rs 254 indicates extreme bearishness in the stock. The violation of the upward sloping trend line has infused a weak trend in Satyam. Similar to Infosys, the share price of Satyam could retest the earlier low at Rs 162.25. Fresh buying may be avoided as the overall trend in the stock continues to remain weak.

(Note : This column analyses the outlook for major Nifty constituents based entirely on Technical Analysis of the past price behaviour of the company concerned. There is a risk of loss in trading.)