Hindustan Lever, the heaviest among the Sensex scrips, although lost just two per cent during the week, the closing of Rs 1568 is extremely weak. The chances of a further dip from the current level are good. The recent fall has been supported by volumes and oscillators have also been pointing southward.

Other counters like Bajaj Auto, MTNL, Bhel, Hindustan Petrol, Reliance and L&T also fall into HLL's category. State Bank is at an all time low, and a decline from the current level cannot be ruled out. The only counter among thepivotals which can show some recovery is ITC. However, whether the recovery will be sustained is doubtful. In an optimistic scenario, ITC rally, if occurs, can have favourable impact on other counters.

But overall, the impact on the Sensex will not be pleasant. The position of pivotals suggest that the Sensex, in all probability, will test December 1996 bottom of 2713 points which is just 70 points away from the current level.

As such, traders are well advised to avoid fresh buying at this juncture as the outlook for the Sensex is negative for next few days. Counters like Bharat Petroleum, Castrol, Cochin Refineries, Corporation Bank, Digital Equipment, Dr. Reddy's Laboratories, Gujurat Ambuja Cement, Hindustan Petroleum, Hotel Leela, ICICI Banking, LIC Housing Finance, Madras Cement, Oriental Bank of Commerce, Tisco and Wockhardt are expected to shed some more points. Short position can be taken on counters like Bharat Petroleum, Hindustan Petroleum and Oriental Bank of Commerce.

However, in case themarket moves against our expectations, counters where long position can be taken are Ashok Leyland and Burroughs Wellcome. If market shows some recovery, both these counters can offer excellent returns. These counters would be a good hedge against short position on other counters.