The Hindu Business Line : Infosys, Satyam chart divergent patterns

Infosys (Rs 2,788): A bearish trend prevailed and the stock moved closer to its support zone at Rs 2,750-2,760. A close below Rs 2,750 would result in a drop to Rs 2,700-2,705.

The medium-term trend would turn bearish on a close below Rs 2,690. The stock is likely to seek support at Rs 2,700-2,705 range and stage a recovery subsequently. Investors may lighten their holdings and may consider exposures at the support zone. Stop-loss for long positions may be placed at Rs 2,690.

Satyam Computer (Rs 727): The stock ruled weak in line with the overall market trend. It has, however, managed to hold above the crucial support level at Rs 720-725. A "bull flag" pattern appears to be taking shape and a breakout from this pattern would push the stock to our target zone at Rs 800-810.

Hold with a stop-loss at Rs 710. Fresh exposures may be avoided. A close below Rs.709 could push the stock to Rs 685-690.

SBI (Rs 858): The stock ruled weak and also breached the crucial stop-loss level at Rs 860. The short-term trend has now turned bearish and a drop to Rs 758-790 appears likely. Though the short-term prospects are negative, the long-term outlook remains bullish. The move towards the target zone of Rs 1,050-1,100 is likely to commence on the completion of the anticipated short-term downtrend. Holders of long positions should to have liquidated their position, as the stop-loss has been violated. Fresh long positions may be avoided. Traders may consider short position on a rally towards Rs 869-871 range, with a stop- loss at Rs 880.

Reliance Ind (Rs 697): The trend turned weak in the last couple of trading sessions. As a result, the share price has moved closer to the crucial support level at Rs 685. A close below this level would impart weakness and a move to Rs 670-672 may materialise subsequently. The recent price patterns indicate that the stock is likely to drop below the trigger level and test the support zone at Rs 670-672. A close below Rs 690 would be an early indicator of the further weakness. Investors willing to take risk may consider short positions on a close below Rs 690, with a stop-loss at Rs 702.

Tata Steel (Rs 401): Despite the bearish trend that prevailed in the broad market over the past few days, this stock has managed to hold ground. After a sharp rally in the earlier week, the stock appears to be taking a breather before commencing the next leg of the upward trend. From a relatively long-term perspective, there is a possibility of the stock moving to Rs 525-550.

The long-term positive outlook would be negated only on a close below Rs 320. In the near-term, the stock is likely to rise to Rs 430-435. Consider long positions with a stop-loss at Rs 380. Stop-loss for existing long positions may also be placed at this level.

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Orchid Chemicals (Rs 267): After four days of sideways movement, the stock closed on a positive note on Friday. The recent price action has not negated the positive view expressed last week. The outlook remains bullish and the stock appears on course to move to the target zone of Rs 295-300.

The positive view would be negated on a close below the stop-loss level of Rs 240. Fresh exposures may also be considered at prevailing levels and on declines, with a stop-loss at Rs 240. Exposures may be enhanced on a close above Rs 268, with a close stop-loss in place.

India Cements (Rs 141.3): The stock ruled firm and also moved to the target zone of Rs 145-150 that was mentioned last week. The recent price patterns indicate that the upward move is not complete as yet. The stock could move to the next target zone of Rs 165-170. The view would be valid as long as the price stays above the revised stop-loss level at Rs 120. Stop-loss for long positions may be placed at this level. Fresh exposures may be also considered on weakness, with the same stop-loss level.

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