With this week's fall, the sensex has retraced more than 50 per cent of its earlier rally which was of 287 points. And chances of a recovery from this level are fair.

The heaviest of the lot, Hindustan Lever could play a major role. This week, the stock has fallen from a peak of Rs 1786 to Rs 1650, a fall of more than Rs 100 in five trading sessions. If one were to go by its past track record, a recovery upto a level of at least Rs 1,700 will not require major efforts.

The number two in the sensex, ITC can also support HLL's rally. The stock can move up sharply above Rs 706.

State Bank of India is at its long term support level of Rs 148 but if it fails to bounce back, then it will be bad for the stock as well as the market. Reliance'sposition is comparatively better. Other pivotals like Bharat Heavy Electricals Limited, Hindustan Petro Chemicals limited and Hindalco are also comfortable. In the case of Bhel, if it manages to cross Rs 240, the rally thereafter will be very sharp.

Among the pivotals, the position of Mahanagar Telephone Nigam Limited is worst. Last week, the stock dipped below the crucial level of Rs 170. It can dip further before a recovery. Bajaj Auto is also weak but a rally is likely before it starts its southbound journey once again. Overall, the outlook for the sensex for the next two-three days is positive but the Monday opening will be very crucial.

If on Monday, the sensex opens firm, stocks like Ashok Leyland, Castrol, Crompton Greaves, Dabur India, Grasim, Lohia Machines, Raymond, Voltas, SKF Bearings can provide handsome returns on the positive side. Stocks like Essel Packaging, Gujarat Ambuja Cement, Dr Reddy's Lab, Corporation Bank, Century Textile, HDFC Bank will also remain bullish.

The Tata stocks -Tisco, Telco, ACC, and Tata Power also appear to be on a good wicket. These counters are expected to extend gains. Among the software stocks which remained in the limelight during the week, Satyam Computer has entered into a new bull orbit. On Friday, it touched an all time high of Rs 634. However, since the rally is on for last 11 trading days and gained more than 25 per cent, a correction is due. The medium to long term prospects for the stock however remain bullish. Other stocks like Infosys, Silverline and Pentafour Software are also expected to remain bullish.

However, if the sensex opens weak on Monday, short position can be taken on counters like State Bank of India, Larsen & Toubro, Reliance Industries and Bajaj Auto.