The Hindu Business Line : Use dips as buying opportunity

The short-term support zone for the index is at 2580-2590, followed by 2540-2550. The price action last week lent credence to the view that the recovery since 2307 is the start of the next leg of the upward move.

The long-term positive view will be in force, as long as the index holds above 2400. A close below 2400 would bring into play the possibility of a retest or a drop below 2307.

Stop-loss for long positions may be placed at 2540.

Long-term investors may have the stop-loss at 2540 for a portion of the holding and at 2400 for the balance. Fresh long positions may also be considered on price dips, with a stop-loss at 2540.

Comments: The market movement during the week was distinctly positive.

Aided by a smart recovery in the price of Reliance Industries, the Nifty managed to log a 71-point gain for the week.

After a sharp correction, there were signs of growing market interest towards the mid-cap stocks.

Stocks from the banking and hotel industry were prominent gainers of the week. State Bank of India, Indian Hotels and EIH were prominent gainers from these sectors.

Heightened market interest was also evident in the stocks from cement and logistics industry. ACC, Gujarat Ambuja, Aegis Logistics and Gati were amongst the top gainers.

Sensex (8686)

The index ruled firm as anticipated last week. After peeking above the 8700-level, the index closed slightly lower at 8686.65 on Friday.

The short-term outlook remains bullish and a move to the target zone of 8850-8860 appears likely.

The positive view would be negated on a close below 8200.

CNX IT (3536)

The price pattern traced out by the index was no different from other major indices.

The CNX IT index also ruled firm during the week gone by.

The index appears on course to move to the target zone of 3700-3750. Stop-loss for long positions may be placed at 3430.

A close below this level would blunt the positive outlook and would warrant closure of long positions.

Short-term traders may consider long positions on dips, with a stop-loss at 3390.

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