The Hindu Business Line : Positive outlook for ITC

ITC (Rs 1,378.45): The court ruling quashing the levy of luxury tax by State governments on sale of cigarette and tobacco products imparted a positive trend on Thursday.

There was a sharp upward move on the back of a rise in trading volumes. This helped the stock moving past the positive trigger level of Rs 1,300. Our bullish view remains unchanged and the stock appears on course to move to the target zone of Rs 1,450-1,500.

Hold with a stop loss at Rs 1,320. Fresh buying may also be considered on price weakness with a stop-loss at Rs 1,320.

Reliance Inds (Rs 511.2): The stock failed to make headway in either direction. It was oscillating in a trading zone. How the market reacts to the quarterly earnings reported on Friday would be a crucial trigger that could determine the near-term trend.

A drop to Rs 485-Rs 490 range remains the preferred view. Hold with a stop-loss at Rs 500 and use price rally to reduce exposures. A move past Rs 525 would impart strength and would warrant reduction of short positions.

Hindustan Lever (Rs 142.1): The stock appears to have the potential to move to Rs 155-Rs 160 range in the near-term. Though there is a possibility of one more phase of decline, the stock is likely to recover ground and move to the target zone. Hold with stop-loss at Rs 135 for a portion of the holding and at Rs 129 for the rest.

Long-term investors who believe in the "buy and hold" strategy may place the stop-loss at Rs 129 for the entire holding.

Infosys (Rs 1,961): The view expressed in the earlier weeks is valid. The price movement last week has not altered the trigger levels mentioned last week. The stock appears to be tracing out a "diagonal triangle" pattern in the daily price chart. If this view is valid, the stock is likely to drop to Rs 1,810-Rs 1,815 range. Fresh buying may be avoided now.

Ranbaxy Labs (Rs 983.5): The lacklustre performance reported for the quarter ended December 2004 acted as a negative trigger. The stock dropped below the negative trigger level of Rs 1,050. This has lent credence to the view that the stock is headed towards the downside target of Rs 870-Rs 880 level. Investors may look for opportunities to reduce exposures. Fresh buying may be avoided. A sharp pull back is likely to transpire on the completion of the ongoing downward trend.

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