The Hindu Business Line : Positive near-term outlook for Reliance

SBI (Rs 780.4): The price action was in line with expectations. The stock dropped to the target price of Rs 766 and sought support at that level. The stock faces resistance at the Rs 795-805 range and support at the Rs 750-760 band. Though the long-term trend is bullish, the near-term trend would turn bearish on a drop below Rs 750. Remain invested with a stop-loss at Rs 750. Partial profit booking may be considered on the evidence of weakness at the Rs 795-800 range. Long positions may be taken on price weakness, with a stop-loss at Rs 748.

Reliance Ind (Rs 698.6): The stock ruled weak and also dropped to the target zone of Rs 680-685 that was mentioned last week. The near-term outlook is positive and a move to the Rs 715-720 range appears likely. A close above Rs 730 is, however, the minimum requirement for the resumption of the long-term bullish trend. Hold with a stop-loss at Rs 669. Fresh exposures may also be considered on price weakness, with a stop at Rs 669. As observed in earlier weeks, the long-term trend remains bullish and a move to the Rs 775-780 range remains the preferred view.

Tata Steel (Rs 389.3): In line with the overall market trend, this stock, too, ruled weak and dropped to the earlier-mentioned target zone of the Rs 385-390 range. The near-term outlook remains bearish and a drop to the Rs 355-360 range appears likely. A close below Rs 360 would impart further weakness and a subsequent test of the Rs 335-340 range cannot be ruled out. Remain invested with a stop-loss at Rs 370. A close above Rs 422 is a prerequisite to impart bullish momentum.

Satyam Computer (Rs 508): The stock ruled weak as anticipated last week and also dropped to the target zone of the Rs 490-495 range. The short-term outlook is positive and a rally to the Rs 530-535 range appears likely. A close below Rs 490 would impart weakness and could push the stock down to the Rs 465-470 band. Hold with a stop-loss at Rs 490. Fresh exposures may be avoided.

Infosys (Rs 2,270): The share price has been confined to a narrow trading zone for quite a few weeks now. This has resulted in a steady drop in volatility. Such a situation is typically followed by a sharp move in price in the direction of the breakout from the trading range. A drop below Rs 2220 would have negative implications; a close above Rs 2340 would impart bullishness. Remain invested with a stop-loss at Rs 2220. Trading positions may be contemplated once the stock makes a decisive breakout from the trading zone.

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Blue Star (Rs 382.6): After hitting a high of Rs 425, the stock reversed direction on Wednesday. Though the long-term outlook is bullish, the stock could get into a short-term corrective phase. The long-term trend remains bullish and only a close below Rs 340 would negate this view.

Considering that this stop-loss level is wide from the prevailing market price, investors may settle for a stop-loss of Rs 370 for a portion of the holding and at Rs 340 for the balance. Those who are holding a profitable position may consider partial profit booking and re-entry on evidence of support at Rs 350-360 range. Alternatively, exposures may also be considered on close above Rs 425.

Mangalam Cement (Rs 89.6): Except for a sharp rise on Thursday, a bearish trend prevailed in the remaining trading days of the week. The price action last week has not, however, negated the long-term bullish view. The stock appears on course to move to the initial target zone of Rs 98-100 and to the Rs 115-120 range subsequently. The positive view would be under threat if the stock closes below the stop-loss level of Rs 76. Hold with this stop-loss level. Fresh exposures may also be considered with a stop-loss at Rs 76. Reduce holdings if the stock closes below the stop-loss level at Rs 76.

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