The mood on Friday was more or less negative. As a result of profit-booking and lack of buying at higher levels, after opening firm at 3214 points, the Sensex lost 46 points and closed at 3168 points. This was higher than the previous week's close.The current position of the Sensex is better than what is was during the last week. However, for a sound bottom, a required consolidation is yet to take place. Though the weekly closing has been higher, short to medium term trend is still negative. Overall, looking at the current position of the oscillators and charts, the chances of a sideways and an uptrend market are higher than a downtward move. Market is likely to move in the range of 3050-3300 points.
For traders, among the index-based stocks, Bajaj Auto, Grasim, Hindalco, Ashok Leyland, SPIC, and Madras Refineries are expected to bring short-term gains. The jump on the Bajaj Auto counter has been supported by huge jump in volumes. This is a good sign. The stock is likely to continue its short-term rallyfor a few more days.
Grasim is another stock which has given a fresh buy signal. The stock broken its short-term trendline. The breach of trendline has been supported by a sharp jump in volumes. The stock can be picked at lower levels.
A rally is also expected in Hindalco. The stock has moved above the short-term moving averages and is likely to remain firm. However, all the counters are not as positive. Some counters where rally was witnessed on account of short-covering are likely to again come under a selling spree.
Counters like Global Trust Bank, Gujarat Ambuja, Colgate, HDFC, Indian Hotels, Ingersol Rand, Oriental Bank of Commerce, and Ranbaxy Laboratories feature in this list.
The recent jump on the counter of Gujarat Ambuja Cements was nothing but a correction to the previous fall. Since this correction seems to be over, the stock is likely to again turn weak.
Similar can be said about Indian Hotels. In its previous fall, the stock had broken its major support level of Rs 454 and fell to Rs360. Since the stock has now recovered to Rs 446, a decline is expected in the coming days.
Colgate Palmolive is another counter which is close to its resistence level of Rs 230. The stock is likely to remain weak. For investors, since the market is close to its bottom, selective purchasing can be done on the counters of oversold and sound stocks.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
