• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

B. Krishnakumar

AFTER a firm trend during the early part of the week, the market sentiment was dented on the Budget day. The violence that prevailed in Gujarat coupled with the market dissatisfaction with the Budget proposals led to a sharp drop of about 143 points on Thursday.

The Sensex, however, saw an equally sharp rebound on Friday to close higher by about 117 points. The rally on Friday was on the back of a substantially lower trading volume. The market activity was at low ebb on account of the bandh observed in few States in the western region.

Technically, the upside resistance at the 3760 level remains intact. The Sensex has to move above this level for the continuation of the recent up trend. As of now, the downside risk for the Sensex is not completely eliminated. A close above 3760 is the minimum requirement to reinstate positive undertone in the market. Going by the recent price action, the Sensex appears to have a downside bias as of now.

The outlook for the stocks such as Hindustan Petroleum (HPCL), ICICI Bank and IPCL appear positive. The focus this week is on HPCL and IPCL. The share price of both these PSUs has moved up sharply over the last few weeks. The recent price action indicates that there is still some upside potential from current levels.

The positive outlook for HPCL would be confirmed if the scrip moves past Rs 303. Existing holders could remain invested, while fresh buying could be considered, if the share price breaks above Rs 303. All long positions would warrant a stop loss at Rs 270.

In the case of IPCL, a move past Rs 90 would confirm the positive outlook. Fresh buying may be considered if the scrip moves above Rs 90, while existing investors could hold on to their exposures. Stop loss for all long positions need to be maintained at around Rs 74.

Recommendation follow-up

The share price of the public sector undertaking - Container Corporation failed to move above the key upside trigger level of Rs 285 that was mentioned last week. As a result, fresh buying signal would not have been triggered in the stock.

Going by the recent price action, the earlier view of a positive outlook for Container Corporation continues to remain valid. As mentioned last week, fresh buying may be considered on a break above Rs 285.

The share price of Container Corporation appears to have the potential to move above past the Rs 300 mark. Existing stakeholders could therefore remain invested. All long positions would require a stop at Rs 240.

In the case of Hero Honda, the share price moved right in line with last week's expectations. The share price of the company peaked right at the target price of Rs 400, mentioned last week. After touching a high of Rs 400 on Wednesday, the scrip turned weak only to stage a recovery on Friday.

Considering that the scrip has already touched the earlier expected target price, existing holders could look for opportunities to book profit. If the scrip moves past Rs 400, existing holders could use trailing stop to protect unrealised gain. On the contrary, a drop below Rs 340 would warrant dilution of stake in Hero Honda.

(Note: Recommendations in this column is based entirely on Technical Analysis using Elliott Wave and Point & Figure theory of the past price behaviour of the scrip concerned. There is a risk of loss in trading.)

Send this article to Friends by E-Mail

Stories in this Section
Telecom: A breather

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line