The Hindu Business Line : SBI, Reliance may chart an uptrend

SBI (Rs 914): After ruling weak for the best part of the week, the trend turned bullish on Friday. The stock staged a sharp reversal on Friday and recorded a gain of about Rs 28.

As observed in the earlier weeks, the outlook is positive and a move to Rs 1,050-1,100 appears likely. The positive view would be invalidated on a close below Rs 860. Long-term investors may take exposures in the stock at prevailing levels and on declines, with a stop-loss at Rs 860.

The recent price action indicates that the next leg of the rally is underway. A close above Rs 935 would confirm this view.

Reliance Ind (Rs 699): Though the stock ruled weak, the recent price action has not negated the positive outlook expressed in recent weeks. The near-term outlook remains bullish and a move to Rs 735-740 appears likely. This view would be negated on a close below Rs 685. Remain invested with a stop-loss at Rs 685. Fresh exposures may also be considered with the same stop-loss. Take partial profits on a move to the target zone. A close below Rs 685 would be an early sign of weakness and a drop below Rs 660 will impart a prolonged phase of bearish trend.

Tata Steel (Rs 396): The stock ruled firm as anticipated last week. It also moved past the target zone of Rs 375-380 on Friday. Apart from Tata Steel, quite a few stocks from the steel industry logged sharp gains on Friday. Though there is a possibility of a short-term drop to Rs 380-385, the stock is likely to resume the uptrend on completion of the short-term decline. Evidence of support at Rs 380-385 may be used to take long positions, with a stop-loss at Rs 374.

Satyam Computer (Rs 740): The price patterns traced by the stock in the recent weeks have not negated the positive view expressed earlier. The stock appears on course to move to the target zone of Rs 800-810. It is also positive to notice that the stock managed to hold above the support level at Rs 720-725. This supports the positive outlook. Investors may consider long positions with a stop-loss at Rs 705.

Infosys (Rs 2,905): The price movement was in expected lines. The stock ruled firm and also moved closer to the target zone of Rs 2,920-2,930. The recent price action indicates that the stock could move to Rs 3,150-3,170. There is, however, a strong resistance at Rs 3,040. A close above Rs 3,040 would confirm the bullish trend. Short-term traders may consider long position on weakness, with a stop-loss at Rs 2,760.

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Nava Bharat Ferro Alloys (Rs 46.2): The stock ruled firm in the early part of the week. It also moved closer to the target zone of Rs 59-60. The trend, however, turned bearish in the last couple of days owing to the lacklustre financial performance reported by the company for the quarter ended December 2005.

The weakness in the last couple of days has not negated the positive outlook. The stock appears on course to move to the target zone of Rs 59-60.

This view would be valid as long as the stock holds above the stop-loss level of Rs 40. Fresh exposures may be considered at prevailing levels as well as on declines, with a stop-loss at Rs 40.

Bharat Heavy Electricals (Rs 1,717): The price action was in accordance with last week's expectations. The stock ruled firm and also moved to the target zone of 1740-1750. The near-term outlook remains positive and a move to Rs 1,850-1,900 appears likely.

The positive view would be valid as long as the stock holds above the revised stop-loss level of Rs 1,600.

Investors may hold with a stop-loss at Rs 1,600. Fresh exposures may be considered on weakness, with a stop- loss at Rs 1,600.

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