The Hindu Business Line : SBI to correct ahead of uptrend

SBI (Rs 893): Except for an upward move on Monday, a bearish trend prevailed in the remaining four days. The short-term trend appears weak and a drop to Rs 875-880 appears likely.

The long-term uptrend is likely to resume on the completion of the anticipated short-term correction. The stock appears on course to move to target zone of Rs 1,050-1,100. The close below Rs 860 would not negate the view of a rally to this target zone. It would only lead to a much deeper correction and would delay the eventual move towards Rs 1,050-1,100. A close below Rs 800 will negate the positive outlook.

Reliance Ind (Rs 843): The weak trend in the stock was a key factor that acted as a drag on the index. The announcement of the record date for the proposed demerger proposal did not have any major impact on the stock. Though the earlier view of a rally to Rs 910-920 range is still valid, the stock could seek lower levels in the near-term. A drop to Rs 815-820 appears likely. A close below Rs 810 would have negative implications and would almost negate the positive outlook. Remain invested with a stop-loss at Rs 810.

Tata Steel (Rs 369): Similar to other index stocks, the share price of Tata Steel, too, was confined to a trading zone during the week. The rally in the early part of the week was offset by the sharp fall on Friday. The short-term view is bearish and a drop to Rs 352-355 appears likely. A close below Rs 350 would impart further weakness. Hold with a stop-loss at Rs 350. Fresh exposures may be avoided.

Satyam Computer (Rs 711): After a sharp upward move on Monday, the trend turned bearish in the remaining days of the week. The stock could drop to Rs 685-690. This view would be validated if the share price declines below Rs 700. Short-term traders may reduce exposures while investors may hold with a stop-loss at Rs 680. Fresh exposures may be considered on the evidence of support at Rs 685-690, with a close stop-loss in place.

Infosys (Rs 2,981): The stock is unable to move past the crucial resistance level marked by a trendline that is moving up at the rate of Rs 11 a day. This line acted as a resistance last week as also on quite a few occasions earlier. Only a close above this line would impart strength and lend credence to the earlier view of a rally to Rs 3,130-3,150. The near-term trend would remain bearish until this line is taken out. Investors may book profit and consider fresh exposures later.

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Sakthi Sugar (Rs 133): The stock ruled firm as anticipated last week. It also moved to the target zone of Rs 125-130. The close past the next trigger level at Rs 130 has now thrown open the possibility of a rally to Rs 140-145. The positive view would be valid as long as the stop-loss level at Rs 110 is not breached.

Investors may hold with a stop-loss at Rs 110. Fresh exposures may also be considered on weakness, with the same stop-loss. Partial profit-booking may be considered on the evidence of resistance at the Rs 140-145 range.

Omax Auto (Rs 148.4): Contrary to expectations, the share price ruled weak. This has not negated the positive outlook outlined last week. The stock appears to be on course to move to the target zone of Rs 195-200. The positive outlook would be valid until such time the stock holds above the stop-loss level at Rs 130.

Remain invested with a stop-loss at Rs 130. Fresh exposures may also be considered at prevailing levels and on declines, with a stop-loss at Rs 130. Exposures may be enhanced on a close above Rs 160.

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