The sensex moved against expetations on Wednesday. Although it opened on a firm note, it failed to maintain these levels. The positive signal on ITC counter proved false and the stock was down by Rs 15. The impact of this was clear on the sensex. After opening at 2913 points, it dipped to 2833 points, showing a net fall of 62 points.The sensex fall was further accelerated by Bajaj Auto, Reliance, SBI, MTNL and Larsen & Toubro. The fall on the counters of MTNL and L&T however was of greater magnitude. While in the case of MTNL, the fall was expected, a drop on L&T's counter was higher that the expetations. L&T dipped by 5.13 per cent and MTNL fell by 3.71 per cent.
Optimism which arose out of the last half-an-hour rally on Tueday has vanished to some extent due the 62 points fall on Wednesday. This fall has certainly chanced the outlook for Thursday trading simply becuase the heavy-weights such as HLL and ITC have weakened. But this does not mean the market is ripe for short-selling.
After giving a buysignal on Tuesday, ITC did not move in expected fashion, and dropped. The fall on Wednesday clearly show that the break-out was false and traders which went long on the break-out did not have any option but to book losses. From the current level, the stock is expected to lose additional Rs 10 and may touch Rs 707. And if it does not stop at this level, it would become attractive for short-selling.
The heaviest of the lot, HLL, also witnessed a sharp drop in volumes which were back to normal levels of around 1.5 lakh shares. The price also dipped. The outlook for HLL is weak.
Reliance which also lost 3.41 per cent, if dips below Rs 11 then it can also touch Rs 107. SBI can also dip to an intra-day low Rs 153 for a good buying support. Telco can dip to Rs 101 if it breaks the Rs 106 level. HPCL counter is also expected to witness some profit-booking in the next two days. L&T may also dip to Rs 149.
Among the heavy-weights, the outlook for MTNL is extremely bearish. The stock should continue its downtrendand looks attractive for short-selling.For Wednesday, although outlook for pivotals is more or less bearish, there is still hope for a rally near the close. For this, the sensex should bounce back before the 2764-points level. If this happens in the next two days, then it would be good for the market. But if it fails, then we need to re-work on our bottom forecast.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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