The Hindu Business Line : Positive trend in Orchid Chem

ITC (Rs 743.75): As expected, the stock ruled firm and also managed to move to the target zone of Rs 745-750 mentioned in earlier weeks. After touching a high of Rs 747.85, the stock closed slightly lower at Rs 743.75. The overall outlook for ITC continues to remain bullish. A move to the Rs 765-775 range appears likely in the near term. Existing holders could remain invested while a move above Rs 750 could be used to take long positions. Only a drop below Rs 700 would negate the positive outlook.

Hindustan Lever (Rs 171.1): The stock was confined to a narrow range last week. The overall outlook continues to remain positive with a move to the Rs 185-190 range being the preferred view. As observed in earlier weeks, the stock is perhaps in the early stages of a new bullish trend. Price dips could be used to build exposure in the stock. Traders could take long positions once the share price moves above Rs 176.

Infosys Technologies (Rs 3,054.3): Except for a sharp rally on Monday, the stock was confined to narrow range. The near-term trend appears slightly positive. A move to the 3170-3200 range appears likely. However, the stock is likely to resume the earlier bearish trend that is still prevalent in the longer time frame. Existing holders could remain invested with a stop loss at Rs 2,800. A move to Rs 3,200 could be used to take profits or reduce exposures.

Satyam Computer (Rs 186.35): The overall outlook for the stock appears bearish. There appears to be relatively limited upside potential for the stock from current levels. A move past Rs 194 could push the scrip to the Rs 200 level while a drop below Rs 172 would have negative implications. Existing holders could look for avenues to reduce exposures.

Focus: The market sentiment remained bullish last week with quite a few stocks moving to higher levels. The likes of Bajaj Auto, Dr. Reddy's Laboratories, Apollo Tyres, Sundaram Clayton, Orchid Chemicals, Indian Rayon, Agro Tech Foods (formerly ITC Agro Tech), Thirumalai Chemicals and Agro Dutch Industries appears positive.

The focus this week is on Indian Rayon and Television 18. The near-term outlook for Indian Rayon appears positive while the share price of Television 18 could seek lower levels in the short term.

Indian Rayon (Rs 111.5): The outlook for the stock appears positive. A move to the Rs 125-130 range appears likely in the near term. Existing holders could remain invested while fresh buying may be considered with a stop loss at Rs 101. A move past Rs 125 could be used to book partial profits.

Television 18 (Rs 89): The stock appears to be headed towards the Rs 75-78 range in the near term. However, the overall long-term outlook is positive and the bullish trend is likely to resume once the stock drops to the Rs 75-78 range. Intermittent price upmoves could be used to reduce exposures while fresh buying may be considered on evidence of support at the Rs 75-78 band.

Recommendation follow-up

Orchid Chemicals (Rs 139.05): The price movement was in line with earlier expectations. The stock managed to move to the first target zone of Rs 130-140 that was mentioned on May 18. It appears to be on course to touch the next target zone of Rs 200, mentioned last week. Existing holders could remain invested while long-term investors could use price declines to take fresh exposures. Short-term traders could wait for a break above Rs 148 before taking long positions.

Escorts (Rs 50.95): The scrip turned weak after a sharp upmove on Monday. The earlier view of a rally to the Rs 58-60 range continues to remain valid. However, the stock may seek lower levels of Rs 46-48 in the near term. Such dips could be used to take long positions as the stock could dart back to the Rs 58-60 mark thereafter. Stop loss for all long positions may be placed at Rs 45.5.

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