Time to trim holdings in ITC, HLL

B. Krishnakumar

THE outlook for the ITC scrip does not appear all that positive.

The recent price uptrend appears more corrective in nature. There is still no evidence of the emergence of an uptrend. Existing holders could, therefore, use a rally to clip current holdings.

Fresh exposures may be avoided for the time being. Price rally to the Rs 800-805 range could be used to pare existing long positions. Short positions may also be contemplated with a stop-loss at around the Rs 800-level.

Hindustan Lever: The scrip moved closer to the resistance level of around Rs 200 mentioned a couple of weeks ago. It has since turned weak. Existing holders could use a rally either to or past Rs 200 to lighten holdings.

Fresh short positions may also be contemplated with a tight stop-loss on evidence of weakness at or above the mentioned level.

Infosys Technologies: The price pattern in the stock too does not appear positive. The lack of momentum behind the recent rally indicates that the price action is still corrective in nature. A decline below Rs 7,676 level would be an indicator that the stock could head towards lower levels.

Existing holders could cut exposures and contemplate re-entry on declines. Fresh positions may be deferred for the time being. Evidence of support in the Rs 7,300-7,400 range could be used to take fresh long positions.

Satyam Computers: As expected, the stock declined to move closer to the previous swing low of Rs 292. After touching a low of Rs 296, it managed to stage a comeback. However, the price action does not indicate that a new uptrend is underway.

A decline below Rs 367 would indicate that the scrip is still in a downward corrective phase. As of now, it appears vulnerable to a decline below the immediate major low of Rs 292.

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