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B. Krishnakumar

THE market sentiment remained subdued during the week gone by. While the stocks from the technology sector were confined to a narrow range, the old-economy heavyweights such as Hindustan Lever, ITC and Reliance Industries acted as a drag on the Sensex.

Sensex (2924.03): As anticipated, the index ruled weak and also broke below the earlier pivot low of 2948. The overall outlook for Sensex continues to remain weak with a drop to the 2500-2600 range being a distinct possibility. However, in the near term, the index could rule firm and seek higher levels.

A move above 2943 would impart some short-term strength, which could pave the way for a rally towards the 3030-3040 range. However, a failure to move past 2943 and a subsequent drop below 2908 would have extreme negative consequences.

The focus this week is on Hindustan Petroleum (HPCL) and United Phosphorous. The price movement in the two stocks has been in line with earlier expectations. Existing holders of HPCL could reduce exposures while fresh buying may be considered in the case of United Phosphorous.

HPCL (Rs 271.55): As observed earlier (refer edition dated March 16), the share of the company ruled weak and appears to be on its way towards the then mentioned target price of Rs 240-250. As the overall outlook continues to remain weak, existing holders could reduce exposures while short positions may be considered on price upmoves.

United Phosphorous (Rs 142.45): As anticipated earlier (refer edition dated February 16), the scrip has dropped to then mentioned target price of Rs 120-122. After touching a low of Rs 116 on March 3, the scrip has staged a sharp recovery. Considering the overall positive outlook, existing holders could remain invested while fresh buying may be considered on a move past Rs 146. Alternatively, a drop to the Rs 135-138 range could also be used to take fresh exposures.

Recommendation follow-up

The price movement in both Tata Tea and Bongaigon Refineries were almost in line with last week's expectations. The share price of both the companies ruled firm during the early part of the week and turned weak thereafter.

Tata Tea (Rs 199.85): After touching a high of Rs 208, the scrip turned weak. Though the near-term outlook appears slightly bearish, last week's view that the scrip is headed towards the Rs 225-230 level continues to remain valid. Existing holders could remain invested while price dips could be used to take exposures in the company.

Bongaigon Refineries (Rs 18.1): As expected, the share price of the company moved closer to the target zone of Rs 21-22 mentioned last week. While the long-term outlook for the company appears positive, the scrip could rule weak in the near term. Existing holders could reduce exposures and contemplate re-entry around the Rs 16 range. Alternatively, a move above Rs 19.3 could also be used to build exposures in the company.

(Note: The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. Analysis and price targets are based on the Elliott Wave Analysis. There is a risk of loss in trading)

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