Another factor which seems to be favourable is the fact that the gap which witnessed on Monday has now been filled. The process of filing up the gap should be followed by a rally.

Once again, the onus of carrying a rally in sensex are on ITC and Hindustan Lever. As far as HLL counter is concerned, the position hasimproved but yet to confirm an uptrend. According to closing charts, it has formed a higher bottom, a positive sign. It can rally up to Rs 1,640, but may face strong selling in that range.

ITC on the other hand is also in a similar position. For a clear uptrend, it should move above Rs 726. On Wednesday, it had managed to cross this level, but the post break-out move was entirely unexpected. This time it should not bluff. State Bank has filled up the gap formed on Monday, and should attract good buying support on decline.

The position of other counters, however, is not as promising as State Bank. While Reliance and ACC are comparatively better, the position of MTNL, L&T, HPCL and BHEL is weak, to say the least.

MTNL although recovered sharply from the day's low of Rs 170, short-seller can remain short unless it crosses the Rs 184 level.

Overall, if ITC moves above Rs 726 and does not repeat Wednesday performance, the outlook for sensex will improve. While the chances for sensex to remain firm arefair, for traders software stocks offer attractive for long positions provided they move above certain levels. Infosys, Pentafour Software, NIIT and Satyam Computers, all the counters look attractive. Infosys is a good buy above Rs 2460. On the counters of NIIT and Pentafour Software, fresh position can be taken if these move above Rs 1282 and Rs 666 respectively. The same target for Satyam Computers is Rs 606.