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Friday, November 6, 1998

Game in the hands of speculators; Sensex may face resistance at 2,913 

K Seshadri  
The Sensex not only rose from the pits of 2812, but was seen consolidating in the post lunch session above 2838. This is in contrast to flares and slips usually seen nowadays towards the last 40 minutes of trading. This pattern imparts a note of confidence in the recovery process. With Thursday's recovery, technically it is possible for the Sensex to aim to reach upto the level of 2916. The daily stochastic indicator has broken away clearly from its trigger and is moving up. We are now running into Friday, the week end for BSE. So it is difficult to see the Sensex rising to 2913. At the same time I would not call it impossible.

The game, you must remember, is in the hands of speculators and the index can move up to that target, if they decide to play it up. But conservatively one could still hope to see the Sensex move up to 2888, as the second best alternative. Again taking the cue from the weekly chart pattern, Sensex could come up against a resistance only at 2913. This target is confirmed both in thedaily and weekly charts. ACC is consolidating and it still retains its upside potential. With today's firming up, you should stay logged into Bajaj Auto. Bhel could make a thrust to Rs 241.

Similarly BSES is looking at Rs 152. Hang on to Colgate, with a stop loss at Rs 159. The size of thrust at Glaxo is technically surprising! Conservatives should book profit at IPCL on the rise. ITC was undecided as to which way it should move, but the stochastic indicates the tendency to move up! Hang on to Larsen & Toubro. It has the upside potential. Rs 474 now becomes the upside resistance for Ranbaxy technically. But given the extent of the fall, you should give room for it to break through this. Reliance is bullish. SBI definitely so! Speculators should log into SAIL.

Tata Power could see resistance at Rs 90. Book profits on the rise. The technical pattern at several counters show the potential for a thrust, however brief, northwards. This momentum might override the week-end considerations during intra-day andcould perhaps even carry over to the next week.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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