Use rally to book profit in Hind Lever

B. Krishnakumar

AS mentioned last week, the trend in ITC (Rs. 757.5) continues to remain positive.

In tune with expectations, the stock ruled relatively firm in the just ended settlement. A break above Rs. 780 level could be used to take fresh long positions with a stop-loss at or below Rs. 760. Alternatively, a decline below Rs. 733 could be used to take fresh short positions, with a protective buy-stop at around Rs. 760. Existing holders could trim exposures once the stock moves past the Rs. 800-mark.

Hindustan Lever (Rs. 255.8): The scrip managed to break the resistance level of Rs. 260 mentioned last week. However, it retracted immediately and closed at Rs. 255.8 on Friday. The sharp rally on Friday has pushed the stock to the top of the short-term cycle. The scope for a further significant short-term rally appears limited. Existing holders could use price rally either to or past Rs. 280 to cut exposures.

Infosys Technologies (Rs. 6,312): The short-term trend in the stock continues to remain weak. Very aggressive short-term traders could contemplate short positions with a stop-loss at or above Rs. 6,530 level. A close above Rs. 6,550 level would blunt the underlying weakness in the stock. Existing holders could use price rally to lighten holdings.

Satyam Computers (Rs. 2,169): The trading pattern in the stock is almost similar to that of Infosys. The underlying trend is weak and price rally needs to be viewed as an opportunity to cut exposure. Fresh short positions may also be contemplated with a stop-loss at or above Rs. 2,390 level. Fresh long positions may be contemplated only if the stock manages to close past Rs. 2,450 level.

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