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B. Krishnakumar

EXCEPT for a weak trend on Tuesday and Wednesday, the stock market sentiment remained buoyant during the just concluded week. Much of the buoyancy was underpinned by the firm trend in public sector and old-economy stocks such as Hindustan Lever, HPCL, BPCL and Tata Steel.

Sensex (3306.29): The much-expected correction materialised with the Sensex ruling weak on a couple of days. After this brief retracement, the index staged a sharp comeback on Friday. The immediate near-term target for the Sensex lies at the 3500-3550 range.

Though the index appears to have some upside potential, price indicators suggest that the Sensex could see a sizable downward correction shortly. Given that the overall trend is positive, market weakness needs to be viewed as an opportunity to take fresh long positions.

The focus this week is on Titan Industries and Wipro. While the outlook for Titan appears positive, the share price of Wipro appears to be headed towards lower levels. As anticipated earlier (refer edition dated November 3), the share price of Titan Industries has already touched the then projected price target of Rs 70-75.

After a near-term dip to about the Rs 73-75 level, the share price of Titan could resume its uptrend and touch a price target of Rs.85-90. Existing holders could remain invested with a stop loss at Rs 70. Evidence of support at the Rs.73-75 range could be used to take fresh long positions in Titan.

In the case of Wipro, the share price of the company could drop to the Rs 1200-1250 range in the next few weeks. Such a bearish view would be confirmed if the share price drops below Rs 1500 in the next few days. On the contrary, a break above Rs 1,800 could push the stock to Rs 1,900 and the scrip could resume its downtrend towards Rs 1,200 thereafter.

Recommendation follow-up

The price movement in Tata Tea and Saw Pipes was almost in line with previous week's expectations. After a weak trend on the first three days of the week, the share price of Tata Tea firmed up in the last couple of days. As anticipated last week, the scrip could touch the projected target price of Rs 185-190.

Existing holders of the Tata Tea scrip could remain invested with a stop loss at Rs 168. A move past Rs 178 could be used to take fresh long positions in the company. However, a close below Rs 165 would warrant liquidation of existing long positions in Tata Tea.

In the case of Saw Pipes, the share price of the company ruled distinctly firm. Going by the recent price action, there appears to be still some steam left behind the ongoing rally. Existing holders could remain invested with a stop loss at Rs 86. Price upmoves could be used to gradually trim exposures in Saw Pipes.

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