The Hindu Business Line : Reliance on a weak wicket

SBI (Rs 889.8): The stock moved closer to the target zone of Rs 945-950. After touching a high of Rs 926, the trend turned weak. The recent price action indicates that there is marginal downside risk from prevailing levels. The stock could seek support at the Rs 850-855 range. A close below Rs 850 would impart further weakness and a subsequent drop to the Rs 825-830 range is not ruled out. Remain invested with a stop-loss at Rs 869 for a portion of your holding and at Rs 845 for the rest. Shareholders may remain invested with a stop-loss at Rs 850.

Reliance Ind (Rs 748.3): The share price moved to the target zone of the Rs 775-780 range on Wednesday. After touching a high of Rs 785, the stock turned weak in the last couple of days. The near-term trend appears weak and a drop to the immediate support level at the Rs 710-720 range appears likely. A close below Rs 735 would be an early indicator of a drop to this support zone. Remain invested with a stop-loss at Rs 735. A close above Rs 786 would indicate the resumption of the upward move.

Tata Steel (Rs 403.1): The stock was one of the casualties of the carnage witnessed on Thursday. The share price is still confined to the boundaries of the support zone at Rs 390-395 and resistance at the Rs 420-422 range. A drop below Rs 390 would push the stock to the Rs 375-380 range. On the other hand, a close above Rs 425 would result in the resumption of the positive trend. Hold with a stop-loss at Rs 389.

Satyam Computer (Rs 520.7): The stock moved to the target zone of Rs 555-560 on Tuesday and turned weak subsequently. The near-term does not appear bullish, as the stock has breached the negative trigger level of Rs 520. There is a possibility of a drop to the Rs 490-495 range. The bearish trend would be negated if the stock closes above Rs 550. Hold with a stop-loss at Rs 513 and reduce exposures on price rally.

Infosys (Rs 2400.3): Except for a sharp upward move on Tuesday, the trend remained bearish on the remaining days of the week. The near-term trend remains bearish and a drop to the Rs 2275-2300 range appears likely. Remain invested with a stop-loss at Rs 2360. Fresh exposures may be avoided for the moment. The earlier view of a rally to the Rs 2650-2700 range remains valid and the uptrend would resume on the completion of the short-term downtrend.

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VSNL (Rs 345.7): Contrary to expectations, the stock ruled distinctly weak. Though the expected uptrend failed to materialise, fresh long positions would not have been triggered as the stock failed to close above the trigger level of Rs 409. The drop below the stop-loss level of Rs 382 resulted in a sharp slide.

From a longer-term perspective, the stock appears to be still in an uptrend. This positive outlook would lose validity on a weekly close below Rs 308. Investors may hold with a stop-loss at Rs 308. Fresh exposures may be deferred. The earlier view of a rally to the Rs 440-445 range is valid. The move towards this range would commence on completion of current leg of the downward move.

Sakthi Sugars (Rs 92): After a strong move on Monday, the trend turned bearish in the remaining days of the week. The recent move has not negated the long-term positive outlook. The view of a rally to Rs 125-130 is still valid. As observed last week, a close below Rs 90 would impart further weakness and would delay the recovery process towards the target zone. Investors may dilute exposures on a break below Rs 90 and contemplate fresh exposures at lower levels of Rs 82-84. The problem with both VSNL and Sakthi Sugar is that the short-term correction has turned out to be much deeper than our expectations. As a result, the rally to the projected target zone would be delayed until the corrective phase gets over. Patient investors are likely to have opportunities to exit at the target levels.

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